Gov. Rick Scott is planning to cut business taxes further next year, announcing a new proposal Thursday to raise the exemption on corporate income taxes from $50,000 to $75,000.
Scott spoke to the Florida Association of Realtors, and said his plan would help cut taxes on about 2,000 businesses. The total tax cut would amount to about $8 million, a fraction of the roughly $2 billion that the state collects in businesses taxes each year.
In his first year in office, Scott and the Legislature raised the exemption from $5,000 to $25,000, then followed up in 2012 by doubling the exemption to $50,000.
One of Scott’s campaign pledges was to eliminate the corporate income tax, which provides about 8 percent of the state’s annual general revenue.
“Today, I am proud to announce that in the upcoming legislative session, we will work to further eliminate the business tax for another 2,000 small businesses,” said Scott. “Everything we do must be tied to helping families get jobs, and eliminating this tax will ensure more small businesses can hire people.”
After Scott’s business tax cuts, more than half of Florida businesses pay no corporate income tax. His proposal this year is a minor step toward eliminating the entire $2 billion in corporate income taxes, a move that, if enacted too swiftly, could severely strain Florida’s budget as the state tries to emerge from the recession.
The modest proposal for 2013 represents a stark contrast from Scott's first proposed budget in 2011, when he asked lawmakers to approve more than $400 million in business tax cuts. Lawmakers ultimately passed a drastically scaled back tax cut.
Democrats, coming off Election Day victories, immediately bashed Scott for the new proposal.
"On election night, the people of Florida sent a clear message that they have rejected Gov. Rick Scott's failed priorities and policies which have slashed funding for our public schools while giving hand outs to the corporate special interests who epitomize the broken politics of Tallahassee," said Scott Arceneaux, executive director of the Florida Democratic Party.
See part of Scott’s lengthy press release below:
At the National Realtors Annual Convention today, Governor Rick Scott announced that he will work to further eliminate the business tax in the upcoming legislative session by raising the exemption threshold to $75,000 in taxable income. This would eliminate the need for another 2,000 small businesses to pay this burdensome tax.
Governor Rick Scott said, “Today, I am proud to announce that in the upcoming legislative session, we will work to further eliminate the business tax for another 2,000 small businesses. Like many Florida families, I want my children and great grandchildren to grow up with even more opportunities than I had. That’s why I’ve worked to make Florida the number one state in the nation for job creation by cutting burdensome regulations and cutting taxes. I’ve made a commitment to the people of Florida to eliminate the business tax over seven years – and over the past two years we have been able to eliminate the tax for more than 75 percent of businesses that fall under it. Everything we do must be tied to helping families get jobs, and eliminating this tax will ensure more small businesses can hire people.”
During Governor Scott’s first year in office, he eliminated the business tax for nearly half of the businesses that were required to pay it by exempting nearly 10,000 small businesses with less than $25,000 in taxable income. Last year, Governor Scott was able to help anther 3,770 small businesses by removing the burden for those with under $50,000 in taxable income. Today, more than 75 percent of total business that fall under the business tax are exempt and able to keep more of their dollars to invest back into their business or their family.
Tom Feeney, President and CEO of the Associated Industries of Florida said, “Governor Scott continues to be a champion for Florida’s business community and is committed to further eliminating the business tax which will help create jobs and economic development opportunities in our state. The Associated Industries of Florida looks forward to working with Governor Scott in the upcoming legislative session to ensure its passage.”
David Hart, Executive Vice President of the Florida Chamber of Commerce said, “To secure Florida’s future, we must have a competitive business climate that encourages businesses here at home to expand and attracts new and growing companies to Florida. While Florida’s business tax climate is ranked fifth best in the nation by the Tax Foundation, Governor Scott’s continued commitment to chip away at this business tax will further build on our state’s healthy economic environment and encourage more entrepreneurs and job-seekers to pursue their dreams in the Sunshine State.”
Bill Herrle, NFIB/Florida Executive Director said, "With the Governor's initiative, we have a real opportunity to grow jobs and businesses in Florida. Florida business leaders want to grow and hire more employees, but they need the resources. Governor Scott's plan to let more small businesses keep more of their bottom line will go a long way in making Florida the best place in the world to grow businesses and find a job."
Rick McAllister, President and CEO of the Florida Retail Federation said, “Florida’s retail community makes a tremendous impact on Florida’s economy every year. It is important that our lawmakers continue to propose policies that will help retailers- both large and small- to prosper in our state. We applaud Governor Scott for his commitment to continue to phase out the business tax.”
John Sebree, Senior Vice President of Public Policy of the Florida Realtors Association said, “We are glad Governor Scott chose our event to unveil his agenda to continue to phase out the business tax. Governor Scott is committed to attracting more businesses to our state and he works every day to make sure new and expanding businesses move here.”