2012 Legislature was a big win for business
Find out what the Legislature did for business during its 2012 spring session.
When the Florida Legislature adjourned its annual session in March, a collective sigh could be heard from business interests across the state. Despite lawmakers’ obsession with redistricting maps and cutting state spending, they managed to pass a host of bills to benefit business — and hopefully give a little boost to the state’s economic recovery.
On their last day in session, the state’s lawmakers approved a wide-ranging tax package to help corporations and back-to-school shoppers in a bill that included several well-crafted tax breaks designed to help particular special interests, from owners of private planes to the owners of a new cattle slaughterhouse. In all, the tax breaks will total more than $1 billion over the next three years.
Here’s a look at what the Legislature did for business during the 60-day session:
Corporate Income Tax
During his 2010 campaign, Gov. Rick Scott pledged to eliminate this tax, and the Legislature began to pave the way toward that goal in 2011, boosting from $5,000 to $25,000 the amount of corporate income that is exempt from the state tax. That amounted to a cut of about $1,100 per business and eliminated the tax for nearly half of the roughly 30,000 businesses that were paying it. This year lawmakers doubled the exemption to $50,000, dropping 25 percent of those still paying it, or about 3770 companies.
Savings to business: $9.9 million in the 2012-2013 fiscal year
The Legislature decided to slow down the pace of repaying the federal government for a $2.4 billion loan that Florida took to cover the jump in unemployment compensation during the Great Recession. The state fund ran out of money in 2009. Taxes on business were to increase from $72.10 to $170 per employee in order to repay the loan in three years. But lawmakers reduced the per-employee cost, reducing the wage base on which the tax is calculated from $8,500 to $8,000, and extended the repayment period to five years. The maximum payment per employee is now capped at $432 instead of $459. The Legislature also renamed the state’s unemployment compensation system to “Reemployment Assistance.”
Savings to business: $550 million over two years
Tangible Personal Property Tax
Florida voters will get to decide in November whether to provide tax relief to small businesses and allow local governments the flexibility to provide additional relief to attract business investment. The proposed constitutional amendment provides that taxpayers with less than $50,000 in tangible personal property would not have to pay the tax. That would allow half of the 300,000 companies that are now paying the tax to avoid it.
Savings to business: $20.3 million
Tax Credit Scholarships
Florida law allows businesses to take a tax credit for contributing to private school scholarships for low income children. The cap on the scholarship fund will go from $31 million to $250 million.
Sales Tax Breaks
A host of special interests won sales tax exemptions. Among them: video game and website developers, phosphate miners, airplane owners and engine builders and repair shops. Some of the tax breaks are narrowly tailored, such as a tax exemption on electricity used by packing houses for fruits, vegetables, beef and pork. Manufacturers will also find it easier to qualify for a sales tax exemption on machinery and equipment with a lowering of the required increase in output from 10 percent to 5 percent, a move that is expected to make it easier for manufacturing to grow.
Savings to Business: $120 million
Elimination of Outdated Rules and Regulations
One of the major complaints from business interests is the number of rules and regulations the state places on their business. Scott is hoping to eliminate more than 1,000 of them, and he got a good start this year. Lawmakers agreed to cut 270 rules, the vast majority of them (165) from the state’s water management districts. Some continuing education requirements for state-regulated professions have been eliminated and some agency rules have been decriminalized.
Sales Tax Holiday
It’s billed as a consumer-friendly move to help back-to-school shoppers by exempting certain school and clothing items from the sales tax. But it’s a highly sought after holiday by retailers who say shoppers tend to spend more money when they’re getting a tax break. The exemption will apply to items such as clothing, wallets and bags valued at $75 or less. It also will apply to school supplies that cost less than $15.
Cost to state budget: $31.8 million.
The News Service of Florida contributed to this report.