Newest tax cut idea: Tax 'holiday' for military veterans
TALLAHASSEE, Fla. – A Miami Democrat wants to give U.S. military veterans a two-month sales tax "holiday" at the end of 2016.
Rep. Kionne McGhee on Friday filed a measure (HB 279) that would allow veterans to avoid paying sales taxes on purchases of clothing, footwear, personal computers, books, sports gear, billiard tables and televisions. The tax break would last from Nov. 1, 2016, through Dec. 31, 2016, just in time for the holidays.
The proposal will have to compete with a number of other tax-cut measures during the 2016 legislative session. As an example, Gov. Rick Scott on Thursday renewed his call to permanently eliminate a sales tax on manufacturing machinery and equipment.
Lawmakers in 2013 approved a three-year moratorium on the manufacturing tax, but the tax is scheduled to be revived in 2017. Scott last year projected that companies will have to pay $142.5 million annually if the tax returns.
"Creating jobs for Florida families is my top priority, and I believe this tax will kill jobs," Scott wrote Thursday to manufacturers. "Your focus should be on making quality products and creating jobs -- not on the happenings of Tallahassee. But if you don't get engaged now, nobody will do it for you."
As for McGhee's proposal, there is no immediate projection on the savings for veterans or the reductions in state revenue, but the amount could be sizable. The Florida Department of Veterans' Affairs reports there are more than 1.5 million veterans in the Sunshine State, accounting for 12 percent of the population over the age 18.
McGhee's proposal comes as Senate committees next week will begin reviewing tax-cut measures. Also, Scott is expected soon to ask for more than $500 million in tax cuts during the 2016 legislative session.
Along with making the manufacturing tax cut permanent, another issue that could drew attention is a Scott-backed proposal to reduce a commercial real-estate lease tax.
Money for tax cuts during the coming year is expected to come from a projected $635.4 million budget surplus, something that Florida TaxWatch, a Tallahassee-based think tank, warned lawmakers this week not to dip into too deep.
"There will still be intense competition for funding in the next year," Kurt Wenner, TaxWatch vice president for research, said in a release. "Just as state revenue is climbing, demand for services is also increasing. State economists have predicted $1.6 billion for increased needs next year, ranging from education to health services."
Senate President Andy Gardiner, R-Orlando, in a memo to senators indicated he would support $250 million in tax cuts.
"This level of tax relief would further our ongoing commitment to reducing the burden of taxes and fees on Florida's families and businesses, while also taking into account the impact on future budget years. … We have a responsibility to make spending decisions that maintain structural balance within our budget while being mindful of the impact current spending decisions will have in future years," Gardiner wrote Sept. 8.
Gardiner's office noted Friday that the tax cut figure has not changed.
Senate committees will hear proposals during the coming week to hold a back-to-school tax holiday, trim the tax on commercial real-estate leases and reduce corporate income taxes..
The Commerce and Tourism Committee on Monday will consider a proposal (SB 198), filed by Sen. Dorothy Hukill, R-Port Orange, that calls for a 10-day tax holiday from Aug. 5 through Aug. 14.
As in the past, shoppers would be able to buy clothes, backpacks, school supplies and other items without paying sales taxes during the period.
The following day, the Senate Community Affairs Committee is scheduled to take up a proposal (SB 116) that would reduce the tax on commercial leases from 6 percent to 5 percent. Cutting the tax is a priority for some business groups. That bill also is sponsored by Hukill, who is the chairwoman of the Senate Finance and Tax Committee.
Also, the Senate Banking and Insurance Committee will take up a proposal (SB 76), filed by Hukill, that would increase the corporate income-tax exemption from $50,000 to $75,000. Increasing the exemption would reduce -- or even potentially eliminate -- tax bills for businesses.
Throughout his nearly five years in office, Scott has made a top priority of cutting taxes.
As he ran for re-election in 2014, Scott campaigned on a promise of $1 billion in tax cuts over a two-year period. Lawmakers put together a wide-ranging tax cut package during a June special session that is projected by state economists to cut revenue by $372.4 million this fiscal year.
The package included a 10-day back-to-school tax holiday, cuts to the communications-services tax on cell-phone and cable-TV bills and eliminating for one year sales taxes on college textbooks. The savings are expected to reach $428.9 million, as the package includes two years of tax credits for housing opportunities for people with special needs and allowing businesses within soon-to-be eliminated enterprise zones to continue receiving available tax breaks if they have already entered into contracts.
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