State may try to recover Digital Domain incentive money

I read an article written by a Palm Beach Post Staff Writer indicating that the Florida Department of Economic Opportunity is considering clawbacks for incentives paid to Digitial Domain Media Group. According to the article, Digital Domain was paid a total of $20 million in four installments in 2009, 2010 and 2011 under the Quick Action Closing Fund incentive program.  Unfortunately, the company did not meet the overall requirements for the program and thus, was responsible for returning a portion, if not all of the funds to the State.  Here is a link to the full article http://bit.ly/S6NoU4.

This situation with Digital Domain shouldn't scare businesses from participating in economic incentive programs.  However, I strongly urge businesses to make realistic estimates of what they'll be able to accomplish.  Many businesses overestimate their goals to qualify for a larger award amount.  This is definitely not a sound strategy when pursuing incentives. 

I would say though, that this situation should encourage businesses to hire a firm who fully understands the incentives process and requirements BEFORE they start pursuing these incentives.  If you are considering economic incentives, give us a call.  We have the experience you'll need to make the BEST decisions as it relates to your incentives.

QTI Compliance Reporting Process

Over the years, businesses have inquired about the economic incentive compliance process.  In this blog post, I wanted to provide you with a list of important dates and timelines associated with the Claims or Payment Process of Florida's economic incentive programs, like QTI.

Important Dates/Timelines	QTI Claim Process
October / November	Business Receives Claim Application from the State’s Agent - It is usually at this time that businesses are alerted about their incentive project.
December 31st	QTI Jobs and Wage Implementation date - Business has to meet its project goals by this date.
January 31st	Claim Application due - Businesses are required to submit their claim application to Sharpton, Brunson & Company (agent for Department of Economic Opportunity) for review and approval of the scheduled payment. This is the most crucial part of the economic incentive compliance process.  In order to receive the scheduled payment, a business must prove to the State that the obligations set forth in its incentive agreement have been met.  The claim application must be supported by accurate data and reported in a format acceptable by the State. Business have an opportunity to request a one-time 30 day extension.
March 1st	QTI Claim Application due – if an extension was granted, a business has until this date to submit its claim application and ALL supporting documents to the State's agent for processing.
January - June	Sharpton, Brunson & Company (SBC) verifies that the compliance goals have been achieved.  Once SBC verifies that the business is eligible to receive its scheduled payment, a recommendation is prepared and submitted to the State for approval/denial of the payment.
July 1st	July 1st marks the beginning of the State's 2012/2013 fiscal year.  Funds for economic incentive programs, like Brownfield and QTI are appropriated by the State to begin processing payments.  Once The Department of Economic Opportunity (DEO) receives the local match payments from local governments, they begin the payment approval process.  When a business' claim application and supporting documents are approved, the business is notified of either an approval or denial of its scheduled payment.  The payment is made within 21 business days if there are no disputes.

Remember that this process is similar for most claim-based economic development incentive programs as well.  So, if you are a participant of a Quick Action Closing Fund Program or the Brownfield Redevelopment and Qualified Defense and Space Contractor Tax Refund Programs, you will follow this process.

In order for your claim process to be as efficient as possible, you must be proactive with your project.  Do not wait until the payment request is due to begin analyzing your project goals.  To find out how we can help you maximize your payment, give me a call (850-727-0293) or email me at mt@marlynnconsulting.com.

State of Florida Recognized for Workforce Training Programs

I read this article about Florida's ranking as number one for its workforce and training opportunities in the Enterprising States report. Last year, Florida ranked second. This is a great accomplishment, as it makes the State more attractive to business development and growth. The State of Florida is showing its dedication to upgrading the skills of its workforce. Great Job!!

To read the full article, click the following link: http://bit.ly/pv9kHX

Ask Margo: Frequently Asked Questions About Economic Incentives (Final)

Finally, we are at the last post for this series.  Again, I want to remind you that this series is based on questions or concerns I've encountered over the years, while working with the State's agent for managing a number of its major incentive projects. I've also been getting calls recently from businesses with the same the same questions and concerns.  As such, I decided to prepare this list for your review.  If your burning question is not included in any of these posts, send me an email at info@marlynnconsulting.com and I will add them to the list.

Now, here is the final post of Frequently Asked Questions related to incentive programs:

What are the benefits of working with a consultant, rather than doing it myself?

Although managing your project and proving to the State that you meet the scheduled requirements are not difficult, it is time consuming and requires knowledge of the incentive program. As such, I believe the greatest benefit of working with a consultant is you’ll have the benefit of an expert to manage your project and report your incentive commitments to the State. Ultimately, this frees up your team’s time to focus on the real reason why you are in business – to provide excellent client service and to increase your business’ revenue.

If you choose a consultant to provide full compliance services, the consultant acts as your Compliance Department. As a result, you won’t have to worry about your incentive commitments, because someone else if monitoring those commitments on your behalf. If you choose to manage your project on your own, but you feel you need some quality control to ensure that your analysis and annual reports are appropriate and accurate, you may work with a consultant to provide an oversight review. This process gives you peace of mind, knowing that your project’s reporting package will be reviewed and approved in a timely manner. Another option, if you choose to manage your project on your own would be to have your team participate in a training program to ensure that they have the tools needed to successfully manage and report your project commitments. Again the benefit is the peace of mind, knowing that your project is in good hands.

Feel free to comment or send me an email at info@marlynnconsulting.com if you have other questions that you want answered. I look forward to hearing your comments, questions and concerns about your incentive project. 

Ask Margo: Frequently Asked Questions About Economic Incentives (III)

The posts of the past three weeks have included a list of questions/concerns I’ve received from a number of businesses enquiring about their incentive projects. I promised to provide some additional questions/concerns that you may be interested in. The following list encompasses questions I’ve received over the years, as well as others that may not have been asked yet, but will come up. If your burning question is not included, email them to me at info@marlynnconsulting.com and I will add your question to the list. If you haven't had the opportunity to review the previous blogs, I encourage you to check them out now.

Why is managing my incentive project so important?

In my experience, many businesses do not worry about their incentive projects until it’s time to submit their reports to the State for approval of their payments. The problem with this method is it does not give you an opportunity to make adjustments if you do not meet one or more of your project requirements at the end of the year. Usually, if you fail to meet one or more of your incentive commitments, you will not only lose the scheduled payment for that year. You will also forfeit any remaining payments under your incentive agreement.

Can I manage my incentive project on my own?

Sure you can! With some assistance, most businesses are capable of monitoring and reporting their incentive project commitments on their own. I would suggest, however, that the team working on your project participate in a training program to ensure that they know the specific requirements for your project. The State requires specific documentation to confirm that your business qualifies to receive a payment. To ensure timely review and approval of your payment, your team should be familiar with the types of documentation and the methods used by the State to analyze your requirements to confirm that you’ve met those requirements.

How would you help me manage my project?

A consultant assisting a business with management of its incentive project should perform periodic reviews of the business’ incentive obligations to ensure that the business is on track to meet those obligations. At Marlynn Consulting, we perform periodic analysis of your incentive requirements during the year and provide you with a report of our results. Our report also details any findings or recommendations that we believe will help you to meet your project goals.

Ask Margo: Frequently Asked Questions About Economic Incentives (Part II)

As I stated in last week's post, I’ve been receiving calls from a number of businesses enquiring about their incentive projects and voicing their concens. I promised to provide some additional questions/concerns that you may be interested in. Again, this post is a continuation of  Frequently Asked Questions.

The following list encompasses questions I’ve received over the years, as well as others that may not have been asked yet, but will come up. If your burning question is not included, email them to me at info@marlynnconsulting.com and I will add your question to the list.

What happens if I miss my QTI goals and don’t qualify for the scheduled payment?

Usually, if a company does not qualify for one of its payment, that business will LOSE its QTI project. What this means is that the business’ annual QTI claim application will be denied. You will not receive a payment for the year you miss one or more of your incentive commitments and you will also lose any remaining payments scheduled under your incentive agreement.

However, if the State has approved an Economic Recovery Extension (ERE), you may be provided an opportunity to apply for the extension if your project is denied.

What is an Economic Recovery Extension (ERE)?

Usually when there is an extreme economic downturn, the State’s Legislators approve an ERE to assist QTI Businesses whose project goals may have been negatively affected. The ERE allows a business that was unable to meet one or more of its job requirements to extend the project’s job commitments by one or two years.

My payment was denied, what happens now?

With most incentive programs, if a business’ scheduled payment is denied because it did not meet one or more of its project’s commitments, that business’ incentive project will be terminated. What this means is that business will not receive the payment for that year. Nor, will it receive any remaining payments scheduled under its incentive agreement.

The QTI program has a concession that allows you to extend your job requirements by one or two years. However, the extension is not always available. For the other programs, this extension is not an option. If your incentive requirements are not met, you will LOSE your project and forfeit ALL remaining scheduled payments.

What if I don’t qualify for my Quick Action Closing Fund payment?

The Closing Fund program is a little bit different than the QTI and other incentive programs, in that businesses approved for a Closing Fund project are paid at the beginning, once the project is approved. In this case, if your business does not meet one or more of its Closing Fund goals, you will be responsible for repaying the State a portion of the money you received – plus interest and penalty.

Ask Margo: Frequently Asked Questions about economic incentives (Part I)

Recently, I’ve been receiving a number of calls from businesses that are participating in Florida incentives. Some of their concerns have been related to what needs to be done to qualify for their payments, how to prepare for their reporting requirements and, what happens if they are unable to meet the schedule requirements?

My guess is if some businesses have asked these questions, there may be others who have the same concerns. As a result, I thought it would be fitting to answer some of these questions here. The following list encompasses questions I’ve received as well as others that may not have been asked yet, but will come up. If your burning question is not included, email your questions to me at info@marlynnconsulting.com and I will add your question to the list. To avoid information overload, I will present these questions in a series of posts. So, I urge you to return next week. 

My QTI project has been approved! Now what? What’s the NEXT step?

Congratulations! You’ve worked hard to negotiate your incentive project. You should give your team a pat on the back for a job well done. The NEXT type in the incentive process is to prove to the State that you meet the requirements to receive your payment. However, before you can do that effectively, I strongly suggest you make the decision to assign someone to manage the project on your behalf. If you choose to use a consultant for this process, you should find someone who is an expert on economic incentives, and who is familiar with the compliance management process. Be aware that most Incentive Consultants ONLY prepare their client’s annual reporting because it is profitable for them. If you choose to utilize your team, you need to participate in a training program that will provide you with the tools needed to successfully manage and report your project commitments.

Why is it taking so long to receive my payment?

Many businesses ask this question after their claims have been submitted to the State’s agent for review and approval. Unfortunately, the payment process takes some time. Project claim applications and supporting documents are due to the State’s agent by January 31^st of each year. The agent is responsible for analyzing your incentive claim application and support documents to confirm that you satisfy your incentive project commitments in order to receive your payment.

The State’s fiscal year begins July 1^st of each year. As such, the State cannot make a payment until the funds are available. In addition, the State CANNOT make a payment until it has received the local match (usually 20%) from the participating local government. For example, if a business submitted its claim in January 2011 (the State’s 2011/2012 fiscal year), the State will receive most of the local match payments in the local governments corresponding 2011/2012 fiscal year, which begins October 1^st each year. What this means: if your County or City chooses to make its payment in October is, the State will process your payment once it receives the County or City’s local match payment. Therefore, it is safe to say that most businesses do not receive their scheduled payments until the last quarter of each year.

Stay tuned to next week's update of FAQ. As always, if you have any questions about tax incentives, feel free to contact me at info@marlynnconsulting.com.

Community Contribution Tax Credit

The Community Contribution Tax Credit Program (CCTCP) encourage Florida corporations to make donations toward community development and low income housing projects.

Florida Corporations that make donations to approved community development projects may receive a tax credit equal to 50 percent of the value of the donation.  Businesses may take the credit on Florida corporate income tax, franchise tax, or insurance premium tax.

Who qualifies as a sponsor?

§  A Sponsor MUST meet one of the following criteria:

o   Community Action Program

o   Community Development/Redevelopment Agency

o   Neighborhood Housing Services Corporation

o   Local Housing Authority

o   Historic Preservation District Agency or Organization

o   Regional Workforce Development Board (formerly Private Industry Council)

o   Direct-Support Organization (DSO)

o   Enterprise Zone Development Agency

o   Non-profit corporation affiliated with economic/community development efforts

o   Unit of Local/State Government

o   School Board

§  Donate to a project to construct, improve, or substantially rehabilitate housing, commercial, industrial, or public facilities, or to promote entrepreneurial or job development opportunities for low-income persons.

§  Donate to an eligible project in an area designated as a Florida Enterprise Zone.  [A project designed to construct or rehabilitate housing for low-income persons does not have to be located in an Enterprise Zone].

Who is eligible?

Any corporation paying Florida corporate income tax, franchise tax or insurance premium tax is eligible to receive a tax credit up to 50 percent of the value of donations to approved community development projects.

What is an eligible contribution?

Cash, property, and goods donated to approved sponsors are eligible for the credit.

How much credit can a business receive?

A business is eligible to receive credits of up to $200,000 per tax year.  Unused credits may be carried over for up to 5 years.

"Punxsutawney Phil Predicts Quick End to Winter" - AOL News

"How does this benefit me," you ask? Well, on February 2, 2011, the ground hog (Punxsutawney Phil) cast a shadow, which signaled that SPRING IS COMING!

Now you may be wondering what spring has to do with the Economic Gardening Loan Program. Doesn't the thought of spring jog pictures gentler weather and flowers blooming? Generally speaking, spring makes us think of GROWTH. And I would be amiss if I didn't think of the GROWTH we can achieve as small business owners.
 
This leads me into my discussion of Florida's Economic Gardening Loans.  This loan program was created to stimulate investment by Florida’s small businesses.  

Loans are provided to qualified 'stage 2' businesses meeting the following criteria:

·  Revenues between $1 - $25 million, with

·  10 – 50 employees

You receive up to $250,000 to be used for the following:

·   Working capital purchases,

·   Employee training, or

·   Salaries for new Florida jobs

The Economic Gardening Loan is to be paid in 4 years, with a 2% interest rate.  Only interest is paid in year one.

Is the Economic Gardening Loan program an option for your business?  Contact me at info@marlynnconsulting.com to find out!