House Proposes Nearly $1 Billion In Florida Tax Cuts

January 27, 2016

The House is proposing a wide-ranging tax cut package that falls just short of Gov. Rick Scott’s request for more than $1 billion in mostly business-friendly relief.

A draft of the proposal, slated for discussion by the House Finance & Tax Committee on Wednesday, is more diverse that what the governor is seeking and doesn’t include a cornerstone of his package — a $770 million annual reduction in state revenue achieved by permanently eliminating the corporate income tax on manufacturers and retailers.

House Finance & Tax Committee Chairman Matt Gaetz expects his chamber’s tax-cut package to top $1 billion as additional proposals now in individual member bills are added.

“The House will write a tax bill, I assume the Senate will have tax bills that curry favor, and we’ll get together and negotiate a tax plan as intended,” said Gaetz, R-Fort Walton Beach.

In a statement responding to questions about the House proposal, Scott’s spokeswoman Jackie Schutz said that the governor “expects to end the session strong with a $1 billion tax cut.”

The majority of House’s $989.2 million proposal is comprised of $572.1 million in one-time cuts over the next two fiscal years, compared to Scott’s request for $1.18 billion in permanent, or recurring, cuts.

The proposal does support Scott’s bid to reduce the sales tax on commercial leases by 1 percentage point starting July 1, 2017. It also would extend — rather than permanently eliminate, as Scott wants — a tax on manufacturing machinery that is set to return in 2017.

The reduction in the commercial-lease tax — which would drop another percentage point for just 2018 — would be the largest recurring cut, totaling $256.8 million in the next fiscal year.

The House plan would also give Scott a one-year sales-tax exemption on college textbooks and a 10-day sales tax “holiday” on back-to-school items, but does not include the governor’s request for a sales-tax holiday on hurricane supplies.

The House proposal also includes sales-tax holidays for items costing less than $1,000 at certain small businesses the Saturday after Thanksgiving, for hunting and fishing gear on a single day in August, and for personal computers and computer-related accessories for a day in April 2017.

The holiday on fishing and hunting equipment was part of the House’s initial tax cut proposal last year, a package that stood at $690 million when the regular session abruptly ended. Scott eventually signed a tax cut plan worth more than $400 million over two years that featured reductions in taxes on cell-phone bills, cable TV bills, gun club memberships, college textbooks and luxury boat repairs.

For the next fiscal year, the House is also reviving others measures that failed to pass, such as lifting sales tax at school book fairs for one year and reclassifying cider made from pears from wine to a malt beverage, which would lower the tax on pear-cider production from $2.25 a gallon to 89 cents a gallon. Cider made from fermented apples is already taxed at the lower rate.

The House measure would also lift sales taxes on building materials; pest control; rental of tangible personal property used in new construction in rural areas of opportunity; certain equipment, electricity and building materials used by data centers; and food and drink sold by veterans’ organizations to their members.

The proposal would also expand the homestead exemption for surviving spouses of totally and permanently disabled veterans and establish a property-tax discount on certain property used for affordable housing, expected to help groups such as Habitat for Humanity.

The proposal comes out a week after state economic forecasters slashed nearly $400 million from their estimate of how much lawmakers will have to spend in the budget year that begins July 1, raising questions about Scott’s plans to cut taxes and boost economic-development incentives.

The House draft was released a day after Senate Transportation, Tourism and Economic Development Appropriations Subcommittee Chairman Jack Latvala, R-Clearwater, announced he will recommend including in his budget Scott’s request for $250 million in business-recruitment incentives for Enterprise Florida, the state’s public-private economic development agency.

In response to Latvala’s announcement, House Speaker Steve Crisafulli said his chamber will focus on the tax cut portion of Scott’s priorities.

“The House strongly supports a billion-dollar tax cut; that will be the focus of the House’s discretionary spending,” Crisafulli, R-Merritt Island, said in an email Monday night. “We believe cutting taxes is the best way to spur economic growth and help families keep more of their hard-earned money. It’s still early in the process, but I am confident that the House, Senate, and governor will come together with a strong economic plan for Florida.”

Business groups were quick to back the House proposal.

The Florida Chamber of Commerce, which has assembled one of two coalitions pushing to trim the commercial leases tax, issued a release asserting that, if the tax is reduced, “job creators could increase wages, offer better benefits, hire more employees or invest in the business itself.”

Florida TaxWatch, a Tallahassee-based, business-backed think tank, was quick to tag the proposal as a means to “strengthen Florida’s economy and benefit Florida taxpayers.”

The two chambers rolled out their plans days after Scott signed into law a pair of bills to boost educational and job opportunities for people with developmental disabilities — a top priority of Senate President Andy Gardiner — and a statewide water-policy bill that has been a priority for Crisafulli.

“We’re starting with things that are very important to the president and speaker and other members of the House and Senate,” Scott, flanked by the legislative leaders, said after signing the bills last week. “Everybody knows my priorities: $1 billion in tax cuts, we get more jobs; $250 million with Enterprise Florida, dedicated funds, we get more jobs.”

by Jim Turner, The News Service of Florida

Comments

3 Responses to “House Proposes Nearly $1 Billion In Florida Tax Cuts”

  1. Bill on January 27th, 2016 11:54 am

    Tax on gas is by the gallon not the price

  2. Bob C. on January 27th, 2016 8:15 am

    @ Chris
    You are Very Correct. Tax cuts in one area result in Tax Increases in another.
    Look for state required revaluations of your home and other properties.
    Also, while we enjoy the lower cost of gasoline that results in less tax money for the state to use for infrastructure projects.
    All the things we enjoy cost money and that money has to come from US the Taxpayers.
    The question may be, if you want tax cuts then what are you willing to do without?

  3. chris in brandon on January 27th, 2016 5:41 am

    However, doesn’t sound like there’s any tax cuts for the common people.

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