Today, the Senate Appropriations Committee passed a bill which reduces annual vehicle registration fees for automobiles and light trucks. The measure would be implemented in a revenue neutral manner by eliminating a nearly 30-year-old tax credit that offsets a portion of the Insurance Premium Tax owed by Florida insurance companies.
The bill will now be heard on the Senate floor.
“I am grateful for Chair Negron’s dedication to evaluating and reforming our state’s spending priorities,” said Senate President Don Gaetz. “Not only will his bill rid our state of an antiquated government subsidy for the insurance industry, but, more importantly, it will keep money in the pockets of our hard-working taxpayers. I am glad to see the proposal, which will reduce vehicle registration for every Floridian who drives a car, move to the Senate Floor.”
The funds saved by eliminating the outdated insurance industry tax credit will offset revenue the state will lose by reducing fees associated with annual vehicle registrations. The proposal would roll back more than half of the 2009 increase in these fees. Annual vehicle registration fees were raised during the worst of Florida’s economic downturn in 2009, a year when state revenue collections had declined approximately 20 percent from their high in 2005-06. Reducing the registration fees is expected to save Florida taxpayers up to $220 million per year.
The sections of Negron’s bill relating to the tax credit for insurance companies are effective upon becoming law and apply to the 2013 insurance premium tax year. The sections regarding fees for motor vehicle registration become effective September 1, 2013.