As the Dolphins’ stadium bill scores victories in Tallahassee, Miami’s banking industry may be facing off against its favorite football team.
Both local institutions find themselves on opposite ends of the Senate version of the Dolphins’ bill, which was amended this week to kill a tax break for foreign banks in Florida as a way to pay for a new stadium subsidy. Miami banks have an estimated $6 billion in foreign deposits, and industry lobbyists are warning the bill as written could thin out a staple of the city’s financial scene.
“Banks can easily move’’ to states that have the tax break, including Georgia and New York, said Anthony DiMarco, the top lobbyist for the Florida Bankers Association. “They’re paying employees down there that are making good money. That probably will be moving out of Miami.”
The amendment would end a 1980s law that shields Florida banks from paying corporate taxes on revenue earned from foreign deposits and offshore loans. Backers of the amendment say that because of changes in federal banking law, multi-state banks can now qualify for lower Florida tax bills even if their foreign-deposit facilities are located in other states.
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“This exemption, quite frankly... has outlived its usefulness,’’ said the amendment’s sponsor, Sen. Dorothy Hukill, a Republican representing Volusia County.
As a financial hub for Latin America, Miami would likely remain an attractive spot for foreign banking, even without a tax break that the state says amounts to about $11 million a year in corporate-tax exemptions each year. But with financial institutions under pressure to cut expenses amid a wave of new federal regulations, the banking industry is sensitive to any move to increase operating costs.
A Dolphins spokesman on Thursday declined to comment on the revision to the bill. But Ron Book, the Dolphins’ lobbyist, said he saw no reason to object to the change in the bill, which passed 9 to 3.
“There is nothing wrong with the amendment,’’ he wrote in an e-mail. The “legislature believes [the tax break] is outdated and not being utilized as intended.”
The stadium bill would give the team $3 million a year in state funds, plus allow Miami-Dade to increase its mainland hotel tax to 7 percent from 6 percent to pay for stadium renovations, provided county voters endorsed the hike in a referendum. A recent poll showed the plan is unpopular in Miami-Dade, but the Dolphins saw a referendum requirement as the best way to get the bill passed in Tallahassee.
Even with this week’s maneuvering, the Dolphins and the banking industry may never actually face off in the Legislature. The House version of the stadium bill does not include the banking amendment. In the Senate, a committee could strip the amendment from the legislation, leaving the Dolphins’ subsidies intact. But the issue may not be going away, with the banking-tax amendment reportedly receiving backing from Senate President Don Gaetz.
David Schwartz, CEO of the Florida International Bankers Association, said industry members are meeting with Miami-Dade lawmakers and will press Gov. Rick Scott to threaten a veto if the Legislature passes the change. Schwartz said Florida enacted the tax break in 1981, and this is the first time lawmakers have proposed legislation to take it away.
“We’ve never had to tackle this before,’’ he said. “No pun intended.”