Scott’s latest proposed tax break draws praise from manufacturersby John Kennedy | January 9th, 2013
Gov. Rick Scott drew praise Wednesday from business groups for proposing another round of tax cuts for Florida manufacturers.
Scott said he would push the Legislature this spring to eliminate a requirement that businesses show they have expanded their productivity by at least 5 percent to earn a sales tax exemption on equipment purchases.
Scott wants to exempt manufacturers completely from the state sales tax when they buy equipment. It’s expected to steer $57.5 million from the state treasury its first year on the books, and $115 million the following year.
“We know that when manufacturers purchase equipment in our state, they are investing in Florida workers for years to come,” Scott said. “We want more manufacturers to move to Florida, and our existing manufacturing companies to buy the equipment they need to grow and create more jobs to support Florida families.”
Florida TaxWatch President Dominic Calabro said that erasing the tax will spur job growth. TaxWatch urged making equipment purchases tax-free in a report released in 2011.
“This tax has clearly been and remains an impediment to capital investment and the related job creation in Florida,” Calabro said.
The Legislature embraced Scott’s call last year to reduce what had been a 10 percent production requirement to the current 5 percent level.
The break for manufacturers is the second sweetener Scott is offering businesses next year. In November, the governor said he would ask lawmakers to expand the current $50,000 exemption to the state’s corporate income tax to $75,000.
The levy now takes in $2.1 billion, but under Scott’s proposal, businesses wouldn’t have to pay the tax on their first $75,000 in taxable income. The plan would cost $8 million next year and remove 2,000 businesses from the corporate tax rolls.