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Gov. Rick Scott touts tax cut for manufacturers

Gov. Rick Scott talked up tax cuts for manufacturers at a St. Petersburg tech maker Thursday, touting his top legislative priority as a key to creating jobs.

Part of Scott’s $74.2 billion budget plan, the proposal would exclude the state’s 17,000 manufacturing firms from paying sales taxes on equipment.

Manufacturers are now offered a tax cut for new machinery if they prove it boosted productivity by 5 percent or more. Scott’s proposal would ax that requirement and ditch much of the tax break’s red tape.

“The fact that we have this sales tax puts us at a competitive disadvantage to other states,” Scott said. “It’s a barrier to putting more jobs in our state.”

Manufacturers employ about 5 percent of the state’s private workforce, state data show. Estimates show the tax cut would cost the state more than $140 million in revenue.

Scott spoke at Plasma-Therm, a manufacturer of etching machines that builds semiconductor chips used in smart phones, hard drives and TVs.

In 2010, CEO Abdul Lateef said the firm had made $50 million in revenue every year over the previous decade.

To pass, Scott’s tax cut would need two-thirds of the Legislature’s approval. Many Democrats have voted for business tax breaks before, but the party has recently slammed Scott as promoting “tax giveaways to special interest cronies.” Rep. Mark Pafford, D-West Palm Beach, called it “trickle-down, voodoo economics.”

To help his proposal’s chances, Scott has toured the state and turned to an audience he once loudly rebuked. Last month, the former tea-party darling who criticized lobbyists during his 2010 campaign invited three-dozen of them to private briefings at the Governor’s Mansion to pitch his big interests.

In 2010, the Legislature and former Gov. Charlie Crist earmarked $43 million for a similar program, though only 35 of the state’s 17,000 manufacturing firms signed on. The Florida Manufacturers Association blamed the program’s poor showing on recession-era slowdowns and too much paperwork.

Government economists have worried the proposal could slam local governments who would lose out on tax funds. Out-of-state companies, they said, could also exploit a loophole to buy tax-free equipment without creating Florida jobs.

-- Drew Harwell, Tampa Bay Times staff writer