Many consider Florida to be a tax haven. That is not only because it is one of the few states in the U.S. that does not have a personal income tax. It is also because Florida has low property taxes, sales taxes, and corporate income taxes.

With low corporate tax and other incentives, many corporations move to the Sunshine State to take advantage of the perks.

In turn, Florida’s corporate tax appears to be working well as a catalyst for economic growth.

Let us take a look at the situation in more detail. 

How does Florida’s corporate income tax work?

The corporate income/franchise tax in Florida is imposed on every corporation that conducts business, derives income, or exists in the state.

If you run a company like a C-corporation, an S-corporation, or a Limited Liability Corporation, and you operate in Florida, your federal income will be adjusted by Florida subtractions, additions, and adjustments and apportioned to the state based on your corporation’s activities in Florida and elsewhere.

That would include things like a corporation’s property, sales, and payroll.

If you do not yet operate a corporation, such as a Limited Liability Company, in the state, you should first find out more about llc taxes in Florida and learn how to set up an LLC in Florida before looking at the state’s tax incentives for corporations.

In Florida, there are several credits available against the corporate income tax that corporations can take advantage of, including credits for paying salaries, paying other taxes or assessments, and making specific types of investments in the state.

A Catalyst for Growth

Florida’s pro-business climate and huge market help corporations attain growth and reach expansion goals with ease, so Florida’s corporate tax is just one element that enables companies in the state to achieve economic growth.

Thanks to Florida’s state tax policies and other incentives, the state consistently ranks high among the best states in the U.S. for businesses.

Corporations operating in Florida can also take advantage of a streamlined regulatory environment and competitive costs. In turn, that also fuels the opportunity to achieve greater economic growth.

Furthermore, the government and the leaders of economic development in Florida are working together to make sure the state’s business climate stays favorable not just to some of the country’s leading corporations, but also to companies of all sizes.

Another way in which Florida is enabling companies to achieve greater growth is by offering more affordable land and labor in comparison to other states.

Florida’s regulatory agencies and local governments also provide cheaper, quicker, and more predictable processing of permits for major economic development projects without compromising on reducing set environmental standards.

Florida’s Incentives Are Much More Than Simple Handouts

Some critics see the business incentives that Florida provides to corporations and other kinds of businesses as simple handouts.

But it would be naïve to think that any state could successfully implement a robust economic strategy to boost business growth without offering relevant companies an environment in which they can prosper while also creating more new jobs and generating a positive economic impact.

Using incentives such as those that Florida provides to corporations and other businesses is just one way of creating strong economic development that should have long-lasting effects.

Also, it is worth remembering that Florida’s economic development incentives are not being used as a substitute for good economic growth fundamentals like a well-trained workforce and a good tax structure. But they can still ensure that Florida and its businesses achieve economic growth quickly.