Politics

Adam Putnam Seeks to Dim Electricity Tax on Businesses

By: Jim Turner News Service of Florida | Posted: February 12, 2014 5:06 PM
Adam Putnam

Adam Putnam

Supporters hope that a proposal by Agriculture Commissioner Adam Putnam to gradually reduce the state sales tax paid by businesses on electricity will help its chances of being included in Gov. Rick Scott's goal of cutting $500 million in taxes and fees.

Putnam and Sen. Anitere Flores, R-Miami, said Wednesday that by taking a three-year approach to shave the tax -- from 7 percent to 3.5 percent -- the measure should be easier for lawmakers to work into the state's budget package for the coming fiscal year.

"Without a doubt," Putnam said Wednesday. "We do propose, as part of the sales-tax reduction, to phase that in so that it would better fit within the budget parameter that the Legislature has to wrestle with."

The phased-in approach was outlined in a measure (HB 899) filed Tuesday by Rep. Mike Hill, R-Pensacola, that also includes other priorities from Putnam, including the establishment of a sales-tax holiday on purchases of Energy Star appliances, such as washers and refrigerators, and water-conservation equipment. The sales-tax exemption would apply to the first $1,500 of a purchase.


The discount, similar to the popular back-to-school sales-tax holiday, is proposed for the weekend of Sept. 19.

Putnam estimated the discount would save consumers about $900,000, while boosting retail sales for that weekend.

Meanwhile, businesses would collectively save about a $225 million a year if the sales tax paid for electricity would get cut immediately in half, Putnam said.

By phasing in the reduction, the impact to state revenue should be about $85 million the first year, and an additional $70 million in each of the two following years.

Putnam initially proposed the cut along with his other legislative priorities during the Florida Energy Summit in October.

"By phasing it in, it will give us a little something to work on every year and perhaps makes this year's tax-cut package more varied," said Flores, who intends to file the Senate companion to Hill's measure.

The outline of Putnam's proposal also defines how he wants to shift money generated by the tax to help with school construction and maintenance. The tax dollars would be shifted from the state's general fund to the Public Education Capital Outlay (PECO) program.

Each year, as the tax is reduced, an equal amount of money that businesses save would be shifted from the remaining revenue into the program that funds school projects.

With a budget surplus of about $1 billion and an election on the horizon, Scott has recommended rolling back an increase in vehicle registration fees approved in 2009 that could be worth $401 million to motorists. Also, he has proposed $100 million in cuts to a commercial-lease tax that now brings in about $1.4 billion a year.

Those proposals have competition.

Senate Appropriations Chairman Joe Negron, a Stuart Republican shepherding the vehicle-fee issue through the Legislature, has proposed a pared-back version (SB 156).

State economists estimate that Negron's plan -- an average savings of $12 per vehicle, or about half the 2009 hike -- would equate to about $185 million in savings during the upcoming budget year and grow to $236.7 million the following year

Meanwhile, Senate Finance and Tax Chairwoman Dorothy Hukill, R-Port Orange, has a couple of proposals, one (SB 266) that calls for a 2 percent cut in the state's communications-services tax and another (SB 176) that would cut the commercial-lease tax from 6 percent to 5 percent.

 


Tags: News, Politics

Comments (1)

Freeman
12:17PM FEB 17TH 2014
If your business can't afford to run ,,shut it down,,,,no to corporate welfare and political sell outs

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