TALLAHASSEE, Fla. – April 3, 2017 – A bill aimed at lowering a tax paid by commercial property owners advanced in the Senate on Monday, as the Senate and House continued down different paths to building a tax cut package.
The Senate’s latest rent-tax reduction proposal – backed by business groups and opposed by the Florida League of Cities – doesn’t include a controversial feature in a separate Senate measure that ties the cut to the repeal of a decades-old tax credit for the insurance industry.
On Monday, the Senate Community Affairs Committee voted 5-2 in support of the measure (SB 484) that would reduce the 6 percent commercial rent tax by a one percentage point.
Critics of the tax have said they would like to eventually eliminate the levy, which doesn’t exist in any other state. Sen. Daphne Campbell, D-Miami, said the Senate should push to reduce the rent tax to 2 percent this year. “If we have to cut the tax, I think that’s a great thing for people,” Campbell said.
Florida Realtors considers the business rent tax cut one of its top legislative priorities this year.
Meanwhile, Sen. Jeff Clemens, a Lake Worth Democrat opposed to the measure, said the state needs to consider areas where Florida lags against other states in term of spending, including mental health funding and per-student funding for public education.
The cut is part of Gov. Rick Scott’s requested $618.4 million in tax cuts. The House and Senate overall tax packages might be closer to each other than to the governor’s overall figure.
“(Senate) President Joe Negron’s goal is for the Legislature to pass a broad-based tax relief package that has a meaningful impact on Florida’s families and businesses,” said Katie Betta, a Negron spokeswoman. Betta noted the eventual tax cut package is expected to follow the process employed in past years, in which the final costs and items would be negotiated later in the session.
The 60-day session is approaching its midway point with the chambers about $4 billion apart in their overall budget plans.
For both chambers, the business rent tax cut would make up a large part of the overall package.
In the House Ways & Means Committee proposal, the rent tax would get a temporary, 1.5 percentage-point drop starting Jan. 1. Two years later, the rate would rise to 5.5 percent, a mark intended to be permanent. The House cut is projected to save business owners $190.7 million next fiscal year.
A state Revenue Estimating Conference analysis projects the measure backed Monday by the Senate Community Affairs Committee will cut state and local government revenue by $125.9 million in the next fiscal year, with the savings to business owners growing to $302.2 million on a year-to-year basis.
Another proposal (SB 378), sponsored by Sen. Anitere Flores, R-Miami, and approved by the Senate Finance and Tax Subcommittee, would also reduce the 6 percent commercial rent tax by a single percentage point. However, Flores’ proposal includes Negron’s goal of eliminating a premium-tax credit for insurers that is tied to employee salaries.
Business lobbyists and insurance industry representatives have indicated that the change to the credit the industry has enjoyed since 1987 will drive jobs out of Florida and result in higher premiums for Floridians.
Source: News Service of Florida, Jim Turner