A massive tax cut package sped through a Florida Senate committee on Tuesday -- but with one big switch, swapping out salary tax credit incentives for cuts on commercial leases in the Sunshine State.
With no debate, SB 378, sponsored by Senate President Pro Tempore Anitere Flores, R-Miami, flew through the Senate Finance and Appropriations Committee Tuesday morning, passing by a 4-0 vote.
SB 378 initially aimed to repeal the insurance premium tax credit on cell phones and TVs, which would be replaced by a two percent reduction in the communications service tax. The CST is currently placed on cell phones, non-residential landline phone services and cable and satellite televisions. Tax rates vary around the state, with some cities in Florida having rates as high as 7 percent.
On Tuesday, senators pulled a switcharoo in the bill, Sen. eventually rescinding a salary tax credit for companies who recruit and hire Florida workers. That tax credit, which Flores slammed as “corporate welfare,” is linked to employee salaries in the Sunshine State and has been in place since 1987.
In exchange for getting rid of that tax credit, the committee approved a more sweeping measure via an amendment from Sen. Kelli Stargel, R-Lakeland, which would cut taxes businesses pay on commercial leases by one percent.
Cutting commercial rent taxes has long been a priority of Gov. Rick Scott, who believes cutting the tax would help foster a healthier environment for businesses in the Sunshine State.
Flores said the bill’s passage would reduce “burdensome” taxes to provide larger monthly savings for Floridians.
Insurance industry representatives fiercely opposed the bill’s passage. They took issue with swapping out the salary tax credit for the commercial lease credit, which they believe would raise insurance rates on small businesses and wouldn’t help taxpayers whatsoever.
“Senate Bill 378 is nothing more than a $300 million premium tax increase (40.2 percent) that will increase insurance premiums on Florida insurance consumers including drivers, homeowners, small businesses and their employees, and patients and policyholders,” said Cecil Pearce, President of the Florida Insurance Council. “SB 378 repeals a 30-year insurance salary tax credit that helps keep insurance rates for everyday Floridians as low as possible. There is no net monetary gain for Florida taxpayers in SB 378.”
Other insurance groups agreed, saying eliminating the salary tax credit would be dangerous for the future of businesses in Florida.
“The industry has been expanding its footprint in Florida at a significant rate, bringing high quality jobs to the state,” said Property Casualty Insurers Association of America regional manager Logan McFaddin. “Industry jobs in Florida have been growing at twice the national industry average. This proves that the tax credit works—and makes Florida a more competitive state for attracting new insurance jobs.”
McFaddin called SB 378 a “misguided proposal” and urged lawmakers to vote against it early Tuesday morning.
The Florida Chamber of Commerce and the Associated Industries of Florida, both huge supporters of Scott’s plan to slash business lease taxes, also opposed Flores’ bill, saying it would unfairly punish other industries in favor of lowering commercial leases.
According to estimates from the State Revenue Estimating Conference, eliminating that tax credit would generate over $453 million in general revenue during the 2018 fiscal year and would bring in nearly $300 million to the state annually.
The fight isn’t over for SB 378 -- the bill still has to pass through at least one more committee before it is heard by the full Senate.
The legislative session ends May 5.
Reach reporter Allison Nielsen by email at allison@sunshinestatenews.com or follow her on Twitter: @AllisonNielsen.
