Corporate Tax Reductions Pushed by Gov. Scott Get Senate Airing

A plan to reduce corporate taxes was heard in a Senate committee Monday at the prompting of Gov. Rick Scott, who has pushed the cuts and eventual phase-out of business income taxes as a way to produce jobs. The bill, however, was temporarily postponed, and the bill's sponsor, Sen. Garrett Richter, R-Naples, admitted that there is little time to get it through the Legislature this year before the end of the regular legislative session.

"I'm not ready to throw the towel in but I'm realistic and we're running out of time," said Richter.

SB 1236 originally included Scott's plan for a phase-out of the corporate income tax, moving it from 5.5 percent to 3 percent for the 2011-2012 fiscal year, then dropping 0.5 percent each additional year, until it was completely gone by 2018. An amendment Richter supported would have scrapped that plan and offered an automatic 1 percent reduction of the corporate income tax for the next fiscal year, with additional reductions tied to economic growth. Sales taxes collected by the state would need to exceed 1.2 percent over inflation and population growth to enable business tax reductions, under the amendment.

But the bill was not voted upon by the Commerce and Tourism Committee, as there were concerns among senators over the state's ability to make up the revenue through growth and the potential impact to existing programs, as well as whether the cuts would actually produce the job creation that supporters say it will.

Sen. Jeremy Ring, D-Margate, said he believes the corporate tax cuts will help create jobs, but that the existing 5.5 percent state corporate income tax rate, among the five lowest in the country, is already low enough to generate jobs, but is not working.

"We already have a very fair corporate tax system, but we don't attract jobs," Ring said.

Although the bill in its current form may not pass during the 2011 legislative session, Sen. Nancy Detert, R-Venice, who chairs the committee, holds out hope that some if its provisions may still make it into law.

"In its current iteration," Detert said when asked if the bill was dead, "but language could be taken out of this bill and put onto other corporate bills that are already moving."