Taxation

AIF SUPPORTS reducing the state sales tax on commercial electricity and gas consumption. Reducing this expense is a good way to make Florida more attractive for businesses to locate in the state.

AIF SUPPORTS efforts to permanently eliminate corporate income tax on manufacturing and retail businesses. The elimination of this tax will reduce the cost for businesses in Florida by about $770 million annually, attract more businesses to the state, and diversify Florida’s economy by helping more businesses succeed. In addition, this effort to repeal the corporate income tax provides an excellent incentive for businesses to expand in Florida and for companies looking to relocate here. AIF continues to OPPOSE any structural changes to the corporate income tax such as combined reporting or the “throwback” rule or any other “loophole” issues.

AIF SUPPORTS an incremental reduction of taxes imposed on rental or license fees charged for use of commercial real property. Florida is the only state that charges taxes on the lease of commercial property; and while this is a major part of the state’s tax revenues, it needs to be gradually reduced and eventually eliminated to make Florida more attractive to business.

AIF SUPPORTS Sales Tax Holidays for school supplies, hurricane or disaster preparedness supplies, and purchases by veterans. This tax holiday is a win-win for customers and the state as sales tend to increase more than they would without the tax holiday.

AIF SUPPORTS the elimination of the $9 million annual cap on research and development credits applied against state income tax. This credit would encourage an increase in research and development work in Florida, as well as incentivize research and development enterprises to move to the state

AIF SUPPORTS continuing reductions in the state portion of the communications service tax and supports reviewing and standardizing the local communications services tax rates. The CST applies to residential, business and wireless phone service, cable, and satellite television services. The tax rate on communications services is higher than on general sales and makes the communications services expense a significant deterrent for businesses to locate here. The reduction of the state portion is good for Florida businesses and makes Florida more attractive to companies looking to relocate. Moving to standard local rates will be more fair for technology companies and others trying to comply with the tax and create a uniform and consistent statewide taxation scheme that will improve transparency for consumers and compliance among providers. AIF SUPPORTS efforts to further streamline and improve the administration of this complicated tax structure to provide more efficiencies and transparency. Also, AIF SUPPORTS exempting network investment or business inputs used to provide communications services from sales and use tax. Taxing network investments or business inputs creates an increase in costs for businesses that result in increased costs for the

AIF OPPOSES any legislation, administrative rule or proposed constitutional amendment that would attempt to create a new tax on services. A tax on any services would put Florida businesses at a competitive disadvantage and would discourage new businesses from coming to the state.

AIF SUPPORTS the entertainment industry tax credit program, including sales tax exemptions for motion picture, sound, and video equipment. This economic development program and tax exemption allows Florida to compete with other states and international locations for economic development generated by attracting feature films, high impact television and digital media productions.

AIF SUPPORTS the Urban Jobs Tax Credit Program. This program encourages economic activity and job creation in areas designated as high crime areas.

AIF OPPOSES legislation that will cause a nearly $300 million tax increase on Florida’s insurance industry, resulting in an increase in insurance premiums for Florida’s business community. Florida is one of only a few states that have two separate taxes for insurers—a corporate income tax paid by all businesses and a second, punitive tax on the insurance premiums paid by Floridians. This premium tax credit was created in 1987 to lessen the burden on insurers while also allowing them to reinvest these funds back into their business. Repealing this 30-year insurance salary tax credit removes the mechanism that helps keep insurance rates for everyday Floridians as low as possible.

AIF SUPPORTS legislation that would decouple Florida’s Corporate Income Tax from provisions enacted in late 2017 by the federal government—Section 163(j)—limitation on interest deductibility.

To summarize, the Florida Department of Revenue issued its final report on the state impact of the Federal Tax Cuts and Jobs Act on the Florida tax base. With respect to 965 income, the Department confirms that 965 income is not included in the Florida tax base, and therfore legislative action is needed. With respect to Section 163(j), the Department confirms that the limitation will be included in the computation of the state tax base and provides that the Florida taxpayer would re-compute its Section 163(j) limitation on a separate company basis since Florida is a separate reporting state.