Gov. Rick Scott is planning to cut taxes further for manufacturers in the coming year as a mechanism for creating more jobs and boosting the state’s manufacturing industry.
Scott announced Wednesday that he will seek a new sales tax exemption for manufacturers that purchase industrial equipment and machinery.
“We have 17,500 manufacturing companies in Florida today that employ more than 300,000 Florida families,” Scott said in a statement. “In the upcoming legislative session, we are committed to building up Florida manufacturing jobs by eliminating the tax barriers on companies who purchase equipment.”
Currently manufacturers already enjoy a tax exemption on machinery they purchase, but only if the machinery helps improve productive output by 5 percent annually. In 2012, Scott and the Legislature cut the requirement for productive output from 10-percent to 5-percent, saving manufacturers an estimated $46 million per year.
Scott is looking to eliminate the increase-in-production requirement altogether, allowing all manufacturers to purchase new equipment tax-free. Scott said the provision will make Florida more competitive with other states that don’t tax manufacturing equipment, and will boost exports.
“Eliminating the barriers on investment for our manufacturing industry will also benefit our ports and the many small businesses that support manufacturers,” Scott said in a statement.
It’s not yet clear how much money businesses will save from this tax break, although a similar proposal last year by Sen. Jack Latvala, R-Clearwater, was estimated to cost the state $153.4 million per year in lost revenue. That proposal did not pass, although a smaller tax break for manufacturers did, perhaps reducing the fiscal impact of this year's proposal.
The proposal to eliminate taxes on manufacturing equipment is part of a general trend—backed by Scott and the Republican-led Legislature—to chip away at the taxes paid by businesses.
In the last year alone, Scott has pushed for hundreds of millions of dollars in tax relief for businesses—ranging from corporate income tax cuts, targeted tax breaks for specific industries and tax exemptions for businesses that move to the state.
In November, voters rejected a constitutional admendment that would have cut property taxes for businesses that own equipment.
Last year, Scott announced plans to raise the exemption for corporate-income taxes further, from $50,000 to $75,000.
Democrats--who generally have voted for Scott's tax breaks--have become more vocal in lashing out at Scott's more recent tax-cutting proposals, arguing that Florida should be spending more on education and less on corporate tax breaks.
"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 Florida Democratic Party Executive Director Scott Arcenaux in November. "But Governor Rick Scott apparently didn't get the message."@ToluseO