Less Taxing

Bills abound for short- and long-term business relief
By: Kenric Ward | Posted: March 2, 2010 (All day)
Florida businesses are pleading with Tallahassee for tax relief. Several proposals are emerging that promise relief in the short- and long-term.

CORPORATE TAX: Gov. Charlie Crist wants to lower the business tax from 5.4 percent to 4 percent. Business leaders say that's a good start, but more can be done.

UNEMPLOYMENT TAX: Under a deal struck by Republican legislative leaders and leading business groups, lawmakers hope to delay most of the pain for two years.

Amid soaring unemployment, the state was forced to borrow $1.1 billion from the federal government to keep jobless benefits flowing. If the Legislature does nothing, the minimum rate for unemployment insurance will jump from $8.40 per employee to $100.30.

PCB 10-01, a bill by Rep. Jennifer Carroll, R-Jacksonville, would lower the taxable wage base from $8,500 to $7,000 for two years. It would also freeze a trigger point in the unemployment fund that automatically switches on increases. Under the plan, the minimum rate would rise to $25.20 per employee this year and $53.90 next. In 2012 it would jump to $192.95.

SINGLE SALES FACTOR: Florida's current apportionment formula weighs three factors – sales (50 percent), property (25 percent) and payroll (25 percent). Florida TaxWatch and various business groups say more flexibility would attract, retain and grow businesses in Florida. One proposal would levy taxes exclusively on sales.

"Economic theory and empirical research increasingly point toward considerable gains in job formation, capital investment and long-term economic growth from formulas that place greater weight on sales and less or no weight on property or payroll in the state," according to TaxWatch.

"Florida currently faces a competitive disadvantage compared to an expanding number of states that have adopted the single-sales factor."

MANUFACTURING: The "Jobs for Florida" plan in Senate Bill Draft 4-01009A would expand for two years the current sales tax exemption for machinery and equipment by exempting existing manufacturing and spaceport business from having to show a minimum 10 percent increase in their productive output.

DYNAMIC MODELING: GOP House leaders are promoting a new framework that would lower taxes on goods and services if it can be demonstrated that such reductions would improve Florida's competitiveness in the marketplace and drive higher sales.

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