Corporate tax cut bill goes to Gov. Rick Scott

Florida Governor Rick Scott speaks at Golden Gate Fire Control and Rescue District Station 71 Thursday after being briefed on the ongoing brush fires in Golden Gate Estates. David Albers/ Staff

Photo by DAVID ALBERS

Florida Governor Rick Scott speaks at Golden Gate Fire Control and Rescue District Station 71 Thursday after being briefed on the ongoing brush fires in Golden Gate Estates. David Albers/ Staff

— Most of some 30,000 businesses that pay Florida's corporate income tax would get a relatively small $1,100 per year reduction from legislation that on Thursday went to Gov. Rick Scott, who had sought a much bigger cut.

The projected annual savings of about $30 million is less than a tenth of what Scott wanted for the next budget year, but the Republican governor is expected to sign the bill. Scott said earlier this week that he would accept the smaller cut as a first step toward his goal of phasing out the tax. It is expected to raise $2.1 billion in the next budget year, or 9 percent of all state general revenue.

The GOP-controlled Legislature refused to send Scott a bigger corporate tax cut because leaders say the state cannot afford it in a tight budget year. Lawmakers have cut spending by nearly $4 billion to balance a $69.7 billion budget for the fiscal year beginning July 1.

Scott is pushing for repeal of the corporate tax over the next seven years to make Florida friendlier to business in hopes that will result in job creation. Some lawmakers also have questioned that assumption.

The bill increases an existing $5,000 exemption to $25,000 but leaves the tax rate of 5.5 percent unchanged.

"This means that any corporation with taxable income of less than $25,000 will not have to pay any tax at all," said Rep. Stephen Precourt, an Orlando Republican who sponsored the bill.

That would be nearly half of the businesses that pay the tax, Precourt said.

"For the big guys that are paying millions of dollars in corporate income tax, they're going to get exactly the same $1,000 a year savings that the small guys will get," Precourt added.

He said it's "a good faith start towards removing this onerous burden on the very people that we're relying on to create jobs in Florida."

The bill (HB 7185), which also "piggybacks" Florida's tax law onto the latest version of the federal tax code, went to Scott on a 110-5 vote in the House. It unanimously passed in the Senate on Tuesday.

Most Democrats joined all House Republicans in voting for the bill.

House Democratic Leader Ron Saunders of Key West said he voted for it because it would help small businesses and eliminate paperwork because about 15,000 small corporations no longer will have to file returns. Saunders, though, disputed GOP claims that it would create jobs.

"I do not anticipate a lot of people going out and hiring a bunch of people with that extra $1,100 per year," Saunders told the chamber. "Do not go back home and claim this is a huge tax break for small businesses."

Less than 1 percent of Florida's businesses pay the tax. Most Florida-based companies fall under an exemption for corporations with 75 or fewer stockholders.

The corporate tax break is part of a $308 million tax relief package in the budget. The biggest part of it is a $210.5 million cut in water management district property taxes. The corporate tax cut would not go into effect until Jan. 1, so the first year revenue loss to the state would be only $11.7 million.

  • Discuss
  • Print

Related Stories

Comments » 0

Be the first to post a comment!

Share your thoughts

Comments are the sole responsibility of the person posting them. You agree not to post comments that are off topic, defamatory, obscene, abusive, threatening or an invasion of privacy. Violators may be banned. Click here for our full user agreement.

Comments can be shared on Facebook and Yahoo!. Add both options by connecting your profiles.

Features