When voters head to the polls in the coming weeks, several of the 11 amendments on the ballot will force them to make a tough choice during equally tough economic times: Do residents need more tax breaks at the expense of local government revenues?
If passed by the required 60 percent margin, Amendment 10 the Florida Tangible Personal Property Tax Exemptions Amendment would enshrine additional tax exemptions for small businesses into the Florida Constitution, to the tune of an estimated $61 million less revenue to local governments over the next three years.
At present, businesses every year pay special taxes on the personal tangible property they use to conduct their businesses -- for example, tools, office furniture, shelves, signs, desks, computers, and cooking equipment. Under the Florida Constitution today, the first $25,000 worth of this property is exempt from taxation. Amendment 10 would extend that exemption to $50,000, and would empower counties and cities to increase the amount of the exemption beyond that if they so desire.
Nancy C. Detert, R-Venice, the measures chief sponsor in the Florida Senate, explained the amendment's rationale:
Amendment 10 is one of the few on the ballot that really benefits small businesses. Eighty percent of all businesses are small businesses with 10 or less employees, she told Sunshine State News. Frankly, we need to revamp our whole tax scheme to modernize it and bring it into todays world. This is an old tax that probably should be eliminated completely. Its a yearly tax on your desk, your chair, your computer. Its silly.
And the beauty of this amendment is that cities and counties can use [further] removal of the tax [than $50,000] as an incentive to attract smaller companies to their [regions].
Detert says the burden of this tax is not simply in the amount it exacts, but in how much businesses need to spend just to make sure they are complying with it.
I was a small business owner for 25 years; [the tangible personal property tax] is a minor amount of money and a major amount of paperwork, she insists. It got to where I had to hire a certified public accountant to fill out the required forms every year, which is ridiculous. Its not a huge tax; Iwasn'tpaying a lot of money, but I wanted to [get the paperwork] right because there are penalties [if you make a mistake]. So you end up paying a CPA to fill out a government form for you, which is kind of meaningless.
The Amendment 10 ballot initiative passed the Florida Legislature with strong bipartisan majorities: unanimously in the Senate, and almost unanimously in the House. But not everyone is convinced the measure is a good idea.
[Amendment 10] creates an uneven playing field for businesses depending on where they are located, Karen Woodall, executive director of the Florida Center for Fiscal and Economic Policy, tells Sunshine State News. Carving out special tax exemptions for small groups does not serve the economic interests of the state. Businesses throughout the state would be better served by supporting fair and comprehensive tax reform through the legislative process. The State Constitution is not the proper place to address tax and budget policy.
Detert does not necessarily disagree with the measures critics.
They might have a point. I kind of agree that weshouldn't[be quick to] put things in the Constitution; its too hard to change them later. This was, frankly, the governors proposal and I agreed to do the bill for him because I thought it was good to give a little shot in the arm for small businesses.
But if we can accomplish the same thing in a different way, Im happy to do it as a [regular] bill next year.
Reach Eric Giunta ategiunta@sunshinestatenewsor at (954) 235-9116.
