- April 13, 2012
Small business tax breaks working through committees
Still aiming at goosing the Florida economy, a House committee approved a series of tax breaks that should save small businesses millions of dollars, allowing them to reinvest in their companies and employees.
The bill includes expanding the corporate income tax exemption for small businesses -- a proposal by Gov. Rick Scott that picks up where last year's efforts ended — plus nine other tax changes.
Following up on a 2010 Scott campaign pledge, last year lawmakers approved an exemption on the first $25,000 of business income. This bill expands that to the first $50,000, providing a modest $10 million in additional tax relief. The bill also allows for increasing exemptions in future years.
It passed with unanimous bipartisan support -- suggesting that the $10 million cost was a fairly painless move, allowing lawmakers in both parties to show they are looking out for small businesses.
However, other tax changes, including a constitutional amendment to create what backers call a “super homestead exemption,” split the House Finance and Tax Committee, passing on a 15-8 vote. The amendment, which would require voter approval to become part of the state constitution, would reduce local property taxes by $565 million in the 2013-14 fiscal year.
Currently, homeowners get a tax exemption on the first $25,000 of home value. The amendment would add a 30% tax exemption for the value up to $200,000 and 15% for the value up to $400,000.
Additionally, several tax exemptions for small businesses would save a total of about $55 million for companies in the 2012-13 fiscal year.
Guarded opposition to prison privatization
For the second year, the push to privatize 29 state prison operations to save up to $40 million annually is running into opposition.
A bill doing that passed last year, but a Leon County judge tossed it out on a procedural technicality, ruling that the state should have approved the privatization in a stand-alone law, and not tacked onto the state budget.
So backers have brought it back up this session. But government unions representing prison guards say that while the move will save money, it will be at the cost of safety. The unions and the Democrats they back are opposing the bill and it is having a difficult time this session as some Republicans are now opposing it.
When Senate President Mike Haridopolis brought it to the Senate floor for a vote, he hit a wall of opposition from all Democrats and some Republicans who are feeling heat from government unions. He held off a vote, but he also stripped Sen. Mike Fasano, R-New Port Richey, of a committee chairmanship after Fasano opposed the privatization and has a record of opposing Republican money-saving initiatives.
But the privatization bill is now on hold for obvious reasons. “It's super close,” Haridopolis said. “There's a good chance we could bring it up and not win.”
State wants to tax Internet sales
Amazon.com and the rest of the online sales world would be subject to Florida's 6% sales tax if a few conditions are met under a bill just introduced in the House.
If an online retailer has a warehouse in Florida or gives commissions to Florida residents for directing customers to its website, it would be subject to the tax.
This long-simmering issue pits brick-and-mortar retailers who must collect the 6% sales tax against freedom-of-Internet advocates and those who oppose any tax increases.
While the business community normally opposes tax increases, most business groups favor the bill as a way to equalize the field between the businesses they represent in Florida and the online retailers.
Backers say it is not about raising taxes but creating level competition. The local store owner feels at a disadvantage competing with online retailers because of having to charge the sales tax.
Amazon.com executives have asked the Legislature for a two-year exemption from any new sales tax. In exchange, they promise to build two distribution centers in Florida, employing up to 3,000 people. They say they won't make that investment without the tax break, and retailers oppose that game.
The bill will struggle because of the desire to cut taxes -- not raise them — to spur on the economy. Gov. Rick Scott said he would consider an online tax, but only if it was tax neutral on Florida taxpayers.
A new model for state worker health benefits
Should government employees have the best health insurance money can buy, or should they have what most workers have? A House committee seems to think the latter.
The Health and Human Services Committee approved a bill 11-5 that makes major changes to the Florida employee health insurance system, putting it in line with most private sector health plans in shifting more responsibilities to workers.
Currently, state employees have their health insurance largely paid for and the state selects the health benefits. Lawmakers say employees have too little say and responsibility. The proposal could shift some costs to state workers, but it would depend on what plan the worker chose.
Democrats, backed by government unions, called the proposal “a form of gambling,” but offered no alternatives to skyrocketing costs and the inequality that exists between private sector and government workers.
Rep. Ronald Renuart, R-Ponte Vedra Beach, a physician, said he offers a similar plan to the employees in his medical office. “This is not a gamble,” he said. “But this does put some of the responsibility back on the individual.”
There is not companion Senate bill, but Senate leadership says it wants to accomplish what this bill does.