Governor Rick Scott has pledged to cut taxes and fees for the state by $500 million in the 2014-2015 state budget. These tax cuts may impact businesses by increasing the amount of revenue a business can make before being required to pay corporate tax, by reducing the corporate tax rate on amounts of revenue that is taxable, by reducing cell phone and cable service fees, and by expanding the sales holiday tax.
Gov. Scott is currently on a state-wide tour meeting with and soliciting suggestions from business leaders on possible tax cuts to include in the 2014-2015 state budget. There is no shortage of tax cut ideas and tax incentives that could aid in job creation and entice more businesses to locate to Florida. The concerns of business leaders include rising personal property taxes, insurance cost, and taxes that affect businesses moving to the state or start-ups trying to grow.
Alan Garey, chief executive of Pompano Beach based, Decimal Engineering, suggested a cut in the personal property tax levied on manufacturing equipment. Sales tax on manufacturing equipment purchases was temporarily eliminated in May but businesses continue to pay an annual tax on every piece of equipment they buy.
Garey said, “We pay anywhere from $40,000 to $80,000 a year on personal property tax on equipment we purchase. That’s money I could put back in my business and invest in more equipment, which would help the economy.”
Scott Verner, CEO of Fort Lauderdale based, Nipro Diagnostics, would like to see either the property tax reduced or incentives provided. He suggested no tax for the first and second year after an equipment purchase. He also suggested increasing the amount of revenue a business can make before being required to pay corporate tax which would help smaller companies expand and startup businesses get off the ground. The current level of revenue a business can make before paying taxes is the first $50,000 worth of taxable income.
Steve Levine, chief financial officer of Boca Raton based, Exam Coordinators Network, would like to see a credit to the unemployment tax paid by employees when they do substantial hiring in the state. He said, “There’s no incentive to hire people from Florida. We’re looking to hire some skilled nurses but there’s no reason why we shouldn’t hire those people in other states instead of Florida.”
Kelly Smallridge, president of Palm Beach County based, Businesses Development Board, said “We’re one of the only states that has a tax on commercial leases. When recruiting businesses to the area, Florida’s tax on commercial leases is an issue in being competitive with other states.”
Florida expects a budget surplus of $846 million in fiscal year 2014. The surplus is mostly due to a recovering economy said Amy Baker, state chief economist. But forecasters warn more than half of the surplus ($449 million) is a one-time windfall. In recent weeks, Gov. Scott has promised to spend an additional $70 million on environmental projects involving the Everglades and Lake Okeechobee in the coming year which could come out of the expected surplus.
It remains to be seen if any of the suggestions will become part of the budget present by Gov. Scott, be he is scoring points with business leaders by soliciting their input.
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