Florida’s Chamber of Commerce welcomes the “targeted tax reforms” called for Thursday by Gov. Rick Scott which include reducing business rent tax and sales tax on manufacturing machinery and equipment.
Scott is recommending $1 billion in tax cuts through a series of reductions and a possible elimination of the state’s corporate income tax. The governor believes his plan is necessary to prepare Florida for the next economic downturn.
Chamber Executive Vice President David Hart points out that the proposal is more a matter of long-term viability.
“For Florida, this is a competitiveness issue,” Hart said in a statement. “Creating a fair and equitable tax system is key to growing high-wage, innovative and diverse jobs in Florida. While Florida already has one of the best tax climates in the nation, enacting smart and targeted tax reforms will produce greater economic growth and more opportunities for Florida’s families.”
Chamber officials outlined the four principal parts of Scott’s plan:
A Reduction in Florida’s Business Rent Tax:
As the only state in the nation that charges a Business Rent Tax, Florida businesses pay a 6 percent tax on the space they lease, which includes taxes on added costs such as property taxes, maintenance and the cost of insurance — leading to many cases of double taxation. It’s an expense that the chamber says equals as much as $1.7 billion a year. Even a 1 percent reduction – which the Chamber is calling for this year – would save businesses $287 million.
Permanently Eliminating the Sales Tax on Manufacturing Machinery and Equipment:
Although the Chamber led the way in developing a program in 2011 to reduce the Sales Tax on Manufacturing Machinery and Equipment for three years, Hart says Florida’s manufacturers need a more permanent solution. For that reason, the Chamber is seeking to permanently eliminate the Sales Tax on Manufacturing Machinery and Equipment.
A Reduction of the Corporate Income Tax:
As staunch supporters of abolishing Florida’s corporate income tax, the Chamber will continue to champion increasing the corporate tax exemption. Hart notes that since 2011, 79 percent of qualifying Florida businesses have become fully exempt from paying corporate tax under the $50,000 exemption. This, he says, helps companies focus on creating jobs and hiring workers.
Sales Tax Holidays:
The chamber believes that sales tax holidays — Back-to-School and Hurricane Preparedness, among others – is a win for Florida’s families and small businesses. Tax-free holidays provide encouragement for investment back into communities and drives retail traffic.
Hart said he anticipates working with Scott on moving forward with tax cut proposals in the 2016 Legislative Session.