Advocating for a fair, predictable tax base to make Florida competitive
AIF Lobby Team Members Assigned to the Area of Taxation: Keyna Cory, Jose Gonzalez, & Frank Meiners

Florida does not have a personal income tax, which is attractive to businesses wanting to relocate from outside our state. This is a great advantage; however, there are many flaws in our state’s tax system. 

Florida needs a fair, predictable tax base and one that will make Florida competitive with other states.

AIF created the Taxation Committee to address these flaws as well as the issues being considered by the Taxation & Budget Reform Commission (TBRC) and those anticipated to be initiated by the Florida Legislature.

Once every 20 years, the TBRC is appointed by the Governor, President of the Senate, and Speaker of the House to examine the state’s budgetary process, revenue needs and appropriateness of the tax structure. The commission then makes recommendations to the Legislature that may become proposed legislation, or places amendments on the next statewide ballot to make changes to the tax structure via the Constitution.

Currently, the TBRC is considering a number of proposals that have the potential to impact all members of the business community; and with our state’s revenue hitting all time lows, the Legislature is tackling a myriad of taxation issues in response to the current fiscal crisis the state is experiencing.

There are also several inequities in our tax system that are causing businesses to pay more than their fair share of taxes. Higher taxes lead to higher prices for consumers and the potential for businesses to relocate out of state.

Given the current economic climate, AIF will be concentrating on the following areas during this year’s legislative session.

Taxation Issues

• Support Changes to the Definition of “Highest and Best Use” -- Currently, property appraisers are using this method of calculating the value of property over other methods, causing certain property values to soar.

• Support a Change in the Appraisal Methods for Working Waterfronts to bring fairness to businesses located on the coast.

• Support Changes to how Value Adjustment Boards (VABs) Operate -- VABs serve as the official decision making authorities for resolving disputes between property owners and property appraisers. Currently, the membership on these boards is stacked in favor of local government officials. A citizen or business should not feel intimidated to go before the VAB and challenge their tax bill. In addition, the “presumption of correctness” needs to be scrapped since it is too high of a threshold for citizens to overcome.

• Support Reduction to the Communications Services Tax (CST) -- The CST is a relatively new tax that replaced a number of local and state taxes on telephone service in 2001. It includes land line telephone service, wireless or cellular telephone service, cable television service and Direct Broadcast Satellite (DBS) service. Florida’s CST rate is among the highest in the country, and communications services are already taxed at a rate much higher than other products and services, which are taxed at a rate of 6% versus the state CST rate of 9.17%.

• Support Implementation of the Streamlined Sales & Use Tax -- Florida is losing billions of dollars a year by not being able to collect sales tax from out-of state internet transactions. By joining in with the other states, we can have a system to get our fair share of the revenue from these transactions.

• Support Review of Existing Sales Tax Exemptions -- Florida depends on sales tax to fund general revenue which is used to run the state. The 6% tax rate has not been changed since 1987. A periodic review of existing sales tax exemptions should be conducted from time to time to evaluate their appropriateness and fairness. 

• Oppose Constitutionally-Mandated Repeal or Sunset of Sales Tax Exemptions -- A methodical review of sales tax exemptions to be repealed or sunset should be conducted by the Legislature, not mandated in the Constitution.

• Oppose Sales Tax on Services -- Small businesses in Florida rely on the use of CPA, graphic-design, delivery, and other services to do business. A tax on services would cripple our state’s economy and place us in a competitive disadvantage with other states in our region.