A new drive to reduce the number of businesses paying the corporate income tax and tangible property taxes–part of his push to eliminate all corporate taxes in seven years–will headline Gov. Rick Scott’s legislative agenda, even as state lawmakers face a budget shortfall pegged at $1.3 billion and growing.
In a visit to Central Florida to unveil his economic agenda, Scott said he would ask lawmakers to double the corporate income tax exemption to $50,000, dropping 25 percent of the companies that now pay it from the tax roles. After Scott’s original plan to cut the tax rate got nowhere last year, the Legislature instead approved a measure increasing the exemption to $25,000.
Under that change, about half of Florida businesses already pay no taxes.
Alan Stonecipher, research analyst and communications director for the Florida Center for Fiscal and Economic Policy, tells the Florida Independent that eliminating the corporate income tax would cost the state $2 billion in general revenue, or about 9 percent of that revenue.
Scott also proposed a $50,000 exemption from the tangible personal property tax on businesses, allowing 150,000 of the 300,000 companies that now pay the levy to avoid it. That would require a constitutional amendment that would go before voters in 2012.
“One of the most important things Florida can do to attract businesses, and in turn jobs, is to create a tax environment that welcomes business growth and encourages investment in our state,” Scott said, according to a copy of his prepared remarks.
“Last year,” Scott said, “by passing an exemption for businesses that owe up to $25,000 in corporate income taxes, we were able to eliminate nearly half of all the companies obligated to pay the tax. To continue to fulfill my promise to eliminate the corporate income tax in seven years, I am further proposing to reduce the number of remaining companies required to pay this tax by twenty-five percent. We’ll do it by increasing the corporate income tax exemption from $25,000 to $50,000. The eventual elimination of the corporate income tax will eliminate a major barrier preventing Florida from attracting future Fortune 100, Fortune 500 and other growing companies that can get our residents back to work.”
Scott also said he would push to turn Florida’s unemployment system into a “reemployment system” by requiring some workers to undergo job training while receiving benefits. He also touted proposals to tighten oversight of the state’s workforce boards; improvements in the state’s deepwater ports and transportation system; and pushing universities to focus more on degrees in science, technology, engineering and mathematics.
The last goal has already drawn criticism from educators and others concerned by Scott’s questioning the value of some degrees, but the tax plan could run into resistance as lawmakers try to tackle a budget shortfall in the coming fiscal year that could top $2 billion.
House Speaker Dean Cannon, R-Winter Park, embraced the plan.
“I look forward to working alongside Governor Scott and my colleagues in the Florida Legislature during the upcoming session as we strive to meet our shared goal of reducing the tax burden on Florida families and businesses, eliminating burdensome regulations, and implementing thoughtful public policy reforms that will foster both a business climate ripe for private sector job creation and a skilled workforce ready to meet the needs of a global economy,” Cannon said in a statement following the announcement.
Calling Scott’s plans “ambitious,” Senate President Mike Haridopolos, R-Merritt Island, was more measured in his response. Haridopolos, who was at times openly skeptical of Scott’s plan to reduce the corporate tax rate last year, made no specific reference to the new tax-cut plan in his reaction to Scott’s plans.
“In the coming months and throughout the 2012 Legislative Session, we will work closely with the Governor in order to implement measures that will continue to provide stability and predictability to our state’s business owners and entrepreneurs, as well as pursue an agenda that is focused on job creation and economic development,” he said.
–Brandon Larrabee, News Service of Florida, and FlaglerLive