2012 Legislative Preview

Taking Care of Business

By Linda Kleindienst

When the Florida Legislature convenes on Jan. 10, the primary focus of 120 representatives and 40 senators will be on the once-a-decade job of reapportionment. They’ll also have to tackle an expected $2 billion revenue shortfall. Then the Jan. 31 presidential preference primary will certainly draw everyone’s attention away from lawmaking, no matter how briefly.

Most everything else is expected to take the proverbial back seat.

Still, the state’s business interests hope to see some of their issues addressed when lawmakers convene their annual 60-day session. And, Gov. Rick Scott has made it clear he wants some key business issues addressed. In fact, a new drive to reduce the number of businesses paying the corporate income tax and tangible property taxes is at the top of Scott’s legislative agenda.

“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 has said.

Research by Florida TaxWatch, which is pushing for reform of the state’s tax system, has shown that Florida’s sales taxes on machinery and equipment, along with the Tangible Personal Property Tax, is partially responsible for the relatively low capital investment in manufacturing — an industry that could provide high wage jobs for Floridians.

Here is a quick look at some of the key issues being monitored by the state’s major business lobbies, including the Florida Chamber of Commerce and Associated Industries of Florida:

Corporate Income Tax — During its 2011 session, the Legislature boosted 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. Now Scott wants lawmakers to double the exemption to $50,000, dropping 25 percent of the companies still paying it.

Internet Sales Tax — Florida is losing an estimated $1.5 billion a year in uncollected sales taxes on items that residents purchase through the Internet. Local businesses say it creates an unfair advantage for Internet giants like Amazon. State law requires the purchaser to pay the tax, but relies on the honor system — and few honor it. A growing number of legislators say it’s time for a crackdown.

Online Travel — Online travel companies (Orbitz, Expedia, etc.) now pay state and local taxes on the lower wholesale cost of a room rather than the retail price they collect from consumers, giving them a competitive price advantage over brick-and-mortar hotels. Attempts are being made to eliminate the special tax advantage.

Property Insurance — Efforts continue to gradually raise the rates for Citizens’ Property Insurance policyholders until the rates are actuarially sound and Citizens becomes a true insurer of last resort.

Tangible Personal Property Tax — Scott is proposing a $50,000 exemption, allowing half of the 300,000 companies that now pay the tax to avoid it. This would require a constitutional amendment to go before voters in November 2012.

Unemployment Compensation — Taxes are increasing by $72.10 to a $170 cost per employee to help repay a federal loan that Florida took to cover the jump in unemployment claims during the Great Recession. Business interests would like to repay the loan over a longer period, reducing the amount employers have to pay in 2012.

Workers’ Compensation — On Jan. 1, 2012, premiums will jump 8.9 percent, costing Florida employers an additional $100 million annually.  About one-third of the inflated premiums are blamed on a loophole in drug repackaging contracts that are increasing the costs of medication.

Northwest Florida’s Legislative Delegation

SENATE

Sen. Greg Evers
District 2  |  R-Crestview

Sen. Don Gaetz
District 4  |  R-Destin

Sen. Bill Montford
District 6  |  D-Tallahassee

Sen. Charles S. “Charlie” Dean, Sr. District 3  |  R-Inverness

HOUSE

Rep. Douglas Vaughn “Doug” Broxson District 1  |  R-Tiger Point/Gulf Breeze

Rep. Clay Ingram
District 2  |  R-Pensacola

Rep. Clay Ford
District 3  |  R-Gulf Breeze

Rep. Matt Gaetz
District 4  |  R-Fort Walton Beach

Rep. Brad Drake
District 5  |  R-Eucheeanna

Rep. Jimmy Patronis
District 6  |  R-Panama City

Rep. Marti Coley
District 7  |  R-Marianna

Rep. Alan B. Williams
District 8  |  D-Tallahassee

Rep. Michelle Rehwinkel Vasilinda
District 9  |  D-Tallahassee

Rep. Leonard L. Bembry
District 10  |  D-Greenville