TALLAHASSEE House and Senate leaders are on the verge of negotiating dueling tax cut proposals, with an eye toward Gov. Rick Scott’s election-year $500 million benchmark when backroom wheeling-and-dealing begins.
Scott signed the bulk of the cuts into law (SB 156) on Wednesday, authorizing a repeal of a 2009 vehicle registration fee increase.
But differences remain over a wide range of other tax savings, with proposals that would reduce the communications services tax imposed on cable and phone services, eliminate sales taxes on kids’ bicycle helmets, create a sales tax holiday for gym memberships and expand a tax credit program for investments in low-income communities.
With the House poised to approve a wide-ranging economic development and tax cut package (HB 5601) on Thursday, Senate Appropriations Subcommittee on Finance and Tax Chairwoman Dorothy Hukill said there will be “a lot to conference” to reach Scott’s request.
“There are things I prefer and you can see them in our package,” Hukill, R-Port Orange, said, refusing to comment on specifics in the House proposal.
Meanwhile, House Finance and Tax Subcommittee Chairman Ritch Workman, R-Melbourne, said the hurdle for any talks will be the total amount of the cuts because the Senate proposals exceed the cap on spending set for his committee by House leaders.
“We’re going to have to really hammer it out in conference because I’ve used my allocation and there is not enough of it to meet some of the things she’s done,” Workman said. “Either I’ll have to get more allocations and our bills will be merged more, or she’ll have to lose some of hers.”
Workman said he is looking forward to the talks, which could begin as early as this weekend.
“The conference should be fantastic. It will either be really short or long and awesome, and I’m hoping for long and awesome,” he said. “Both Hukill and I have the same machismo for the tasks we’ve had ahead of us this year, which was to cut taxes, so it ought to be fun either way, because the end result either way is a tax cut.”
Hukill’s committee on Wednesday approved two measures that have Scott’s backing. One measure (SB 362) would establish a 12-day tax holiday in June for select hurricane preparedness items, ranging from packs of batteries to generators worth up to $750. Another (SB 134) would increase the corporate income tax exemption from $50,000 to $75,000.
The corporate tax cut is projected to save businesses $21.6 million a year, while the hurricane sales-tax holiday is projected to reduce state and local revenue by $3.6 million.
“Our approach was more broad relief, you know, returning to consumers, families in Florida, small businesses, and that’s why we have our differences with the House,” Hukill said.
The Senate subcommittee earlier advanced a three-day back-to-school sales tax holiday (SB 792) that would save shoppers approximately $39 million as well as a reduction in the communications services tax (SB 266) imposed on cable and phone services. The communications services tax, not included in the House plan, is estimated to decrease state and local government revenue by $80.2 million a year.
Meanwhile, the House on Wednesday rolled to third reading Workman’s plan, which he touted as an economic development driver. The House is expected to vote on the measure on Thursday.
The House proposal mirrors the Senate’s June hurricane supplies and back-to-school tax holidays but includes a variety of additional tax breaks.
The House plan would set aside periods in September during which sales taxes would be lifted on the first $1,500 of select energy- and water-efficient appliances as well as on physical-fitness facility memberships. The measure includes a permanent sales tax exemption for car seats and bicycle helmets for kids as well as an expansion of the New Markets Tax Credit program for investments in low-income communities, from $178.8 million to $227.55 million.
And the House plan sets aside $20 million for loans to television production companies. A similar measure (SB 1438) has not yet reached the Senate floor.
The House bill also includes Agriculture Commissioner Adam Putnam’s plan to reduce the sales taxes businesses pay for electricity, a move expected to shift about $188 million to school construction and maintenance. A similar proposal in the Senate (SB 1076) has been stalled for three weeks.