Senate, House move closer on tax cuts

By JIM TURNER
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, June 11, 2015.......... The Senate wants a longer back-to-school tax holiday and a deeper cut in a tax on cell-phone and cable-TV services than what the House has proposed.

The Senate Appropriations Committee on Thursday unanimously approved a $400 million tax-cut package, which must still get full Senate support Friday before it heads back to the House.

The House's proposal (HB 33A) would offer $273.2 million in savings for the upcoming fiscal year, with the number growing to $436 million the following year.

"We tried to be as accommodating as possible," said Senate Finance and Tax Chairwoman Sen. Dorothy Hukill, a Port Orange Republican who authored the changes to the House package. "You look at the bill they passed, we included an awful lot of what's important to them. So I think they're going to be awfully pleased with it."

House Finance & Tax Chairman Matt Gaetz, R-Fort Walton Beach, said he was "very encouraged" by the Senate's support for cutting taxes, as lawmakers have little more than week to complete a budget for the fiscal year that starts July 1.

"I think we're coming together on significant elements in our budget negotiations, and agreeing that we should cut taxes in a broad-based way for everybody certainly gives us a lot of momentum to resolve other budget issues that we're addressing," Gaetz said.

Both packages are stripped down from a $690 million package (HB 7141) that the House pushed during this spring's regular legislative session and a $673 million proposal by Gov. Rick Scott. Lawmakers said they needed to reduce the proposed tax cuts to help cover health-care costs in the budget.

Senate Appropriations Chairman Sen. Tom Lee, R-Brandon, told reporters that lawmakers "want to try to help" achieve Scott's agenda.

"We're working hard to do that," Lee said.

Senators said their proposal would provide a benefit for every Florida family.

"The good thing … about this tax package is that in this tax package every single Florida family will have their taxes cut," said Sen. Don Gaetz, R-Niceville. "This is not like some tax-reduction package we've seen in the past that have been for only certain specific groups."

One of the key changes approved by the Senate committee would increase a proposed back-to-school tax holiday to 10 days. The House proposed a three-day holiday. During the period, families could buy clothes, school supplies and other items without paying sales taxes.

The Senate also would lift sales taxes on college textbooks for the entire year rather than for single days at the start of each semester, as the House proposed.

Also, the Senate is seeking a 1.73 percentage-point cut in the communications-services tax on cell-phone and cable-TV bills. The House proposed dropping the rate by 0.9 percentage points next year, which would provide about $10 a year in savings on a $100 monthly bill.

Hukill said her proposed rate would provide about $20.67 in annual savings for a person with a $100 monthly bill. Scott requested a 3.6 percentage-point reduction for cable and cell-phone services.

Among other changes to the House plan, the Senate seeks to cap at $60,000 the amount of taxes collected on repairs to boats worth more than $1 million. Hukill described the break as providing a savings on "major refurbishing of very, very large vessels."

The Senate also would remove a number of House proposals, such as a tax-holiday for small businesses on the Saturday after Thanksgiving, a reduction in a sales tax on commercial real-estate leases, the elimination of Florida's estate tax, and a reclassification of cider made from pears that would reduce a tax on pear-cider production from $2.25 a gallon to 89 cents a gallon.

The Senate plan also doesn't have a House proposal to increase property-tax exemptions for residents who are widows, widowers, blind, or totally and permanently disabled, or to expand a property-tax exemption for military members deployed outside the continental U.S. as part of a number of ongoing military operations.

The Senate, however, supported House proposals to eliminate taxes on admissions and membership fees for gun clubs, certain farm and irrigation equipment, food and beverages sold in support of school extracurricular activities, and motor vehicles purchased overseas by internationally deployed service members from Florida.

The Senate package also includes a House measure to provide more tax credits for businesses involved in Brownfields cleanup and to extend for another year the Community Contribution Tax Credit Program, setting aside $19 million for projects that offer housing opportunities for special-needs individuals and low-income households.

The Senate also would go along with a House measure that provide refunds or credits from the state's 6.9 percent excise tax on fuel to flight schools run by Florida-based colleges and aeronautical schools.

And the Senate would expand on a House proposal to maintain the corporate tax research and development credit program, raising the total to $23 million from $9 million. The House offered to raise the program to $12.3 million.

Sen. Bill Montford, a Tallahassee Democrat who supported the Senate tax package, wondered how far the state could continue to cut taxes without impacting services.

"I believe in tax cuts, but I also believe we have got to have a level of government that the citizens of Florida want and expect," Montford said after the meeting. "You want good roads to drive down, you want good teachers in your classrooms, and you want good state employees serving the citizens of Florida. There is a cost to that."