Scott-O-Meter

Eliminate the state's manufacturing tax

"Manufacturing has the largest return on investment of all industries in Florida. That is why Gov. Scott eliminated the sales tax on manufacturing equipment until 2017, saving companies more than $140 million annually. This savings will allow the 17,500 manufacturing companies in Florida, that employ more than 300,000 Floridians, to expand, invest, and flourish during the next gout years. Permanently eliminating this sales tax will ensure manufacturing is a solid pillar to Florida’s economy and help to protect us from any future economic troubles."


Updates

Manufacturing equipment sales tax suspension made permanent

The Legislature may have shunned the lion's share of Gov. Rick Scott's tax-cut wish list, but lawmakers did do away with the state's sales tax on manufacturing equipment.

The sales tax originally was cut back with a limited exemption in 2012, but the following year was suspended by legislators for three years. Starting in 2014, the tax would not apply through April 30, 2017.

Scott and business groups wanted the suspension to be permanent, and it was on the agenda in Scott's 2015-16 budget proposal. But the issue was lost when lawmakers squabbled over health care issues, and the 2015 legislative session deadlocked.

Scott tried again to make the suspension permanent in his 2016-17 budget recommendation, as part of a $1 billion tax-cut package.

He predicted in his budget proposal that a permanent change starting in 2017 would cost the state $76.9 million in revenue per year, starting in 2017. Tax watchdog Florida TaxWatch had advocated a permanent cut, estimating it would save businesses $73.1 million in taxes annually. The sale of manufacturing equipment went up an average of about 11 percent per month while the exemption has been in place.

While the Legislature refused to consider most of Scott's proposed tax cuts, making the suspension permanent was part of an eventual $129 million tax-cut package that included a sales tax holiday on school supplies. Lawmakers focused more on figuring out how to freeze property tax bills for contributions to education spending.

While Scott is still looking for more tax cuts, he was successful in getting the sales tax on manufacturing equipment permanently removed, with a year left to go on the temporary suspension. We rate this a Promise Kept.

Sources:

Tampa Bay Times, "Gov. Rick Scott calls for special session, says tax cuts may be sacrificed to end stalemate," April 21, 2015

Tampa Bay Times, "Florida House abruptly adjourns session early, saying impasse is insurmountable," April 28, 2015

Tampa Bay Times Buzz blog, "House opens debate on budget with Senate to follow on Friday," June 18, 2015

Tampa Bay Times, "Two months late, Florida lawmakers approve state budget," June 19, 2016

Tampa Bay Times, "What passed, what failed in Florida's 2015 legislative session," June 19, 2016

Florida TaxWatch, "Analyzing the Governor's FY2016-17 Budget and Tax Recommendations," November 2015

Miami Herald, "Gov. Rick Scott will seek $1B in tax cuts from Florida Legislature," Nov. 5, 2015

Miami Herald, "Gov. Rick Scott's proposed 'Florida First' budget: $79.3 billion, tax cuts," Nov. 23, 2015

Tampa Bay Times, "Bousquet: Gov. Rick Scott's $1B in tax cuts met with skepticism," Dec. 28, 2015

Orlando Sentinel, "Florida Legislature: What passed, what failed," March 12, 2016

Florida Times-Union, "Florida Legislature session ends with a sliver of tax cuts governor wanted," March 11, 2016

Orlando Business Journal, "Why eliminating manufacturing equipment sales tax is a plus for your biz," March 15, 2016

PolitiFact Florida, "Legislature provided $428 million worth of property tax relief, Sen. Don Gaetz says," March 17, 2016

Tampa Bay Times, "Gov. Rick Scott signs record $82 billion budget in speedy fashion," March 17, 2016

FloridaFirstBudget.com, "Tax Cuts Totaling Over $1 Billion for Florida Families," accessed March 22, 2016

FloridaFirstBudget.com, "Policy and Budget Recommendations," accessed March 22, 2016

FloridaFirstBudget.com, "Governor's Budget Recommendation — Implementing Bill," accessed March 22, 2016

Florida House of Representatives, HB 7099, accessed March 22, 2016

Scott, lawmakers again ask Legislature to make tax's suspension permanent

Time will soon be up for a temporary break from a tax on manufacturing equipment, but Gov. Rick Scott wants the Legislature to make the suspension permanent.

Florida businesses first enjoyed a limited exemption on the state's sales tax on manufacturing machinery purchases starting in 2012. The Legislature the following year suspended the tax entirely for three years, beginning in 2014 and lasting through April 30, 2017.

Now Scott is again trying to eliminate the tax for good as part of $1 billion in cuts outlined in his 2016-17 budget proposal.

He predicts in his budget recommendation that making the cuts forever would cost the state $76.9 million in revenue per year, starting in 2017. Florida TaxWatch, which has continuously recommended making the suspension permanent, predicts the change would save businesses $73.1 million in taxes per year.

Scott had suggested the same thing in his 2015-16 budget proposal, with bills filed to enact the change. The issue was lost amid a protracted budget fight over health care costs during the 2016 session.

There are now bills in the Senate (SB 98) and the House (HB 115) to eliminate the tax after the three-year suspension ends in mid-2017. It's possible that even if those don't pass this year, the subject could come up again later. The tax is not in effect for 2016.

Lawmakers will decide whether those bills pass when the legislative session begins Jan. 12. Scott still wants to get rid of the tax, but until the suspension is permanent, we rate this promise In The Works.

Sources:

Tampa Bay Times, "Gov. Rick Scott calls for special session, says tax cuts may be sacrificed to end stalemate," April 21, 2015

Tampa Bay Times, "Florida House abruptly adjourns session early, saying impasse is insurmountable," April 28, 2015

Tampa Bay Times Buzz blog, "House opens debate on budget with Senate to follow on Friday," June 18, 2015

Tampa Bay Times, "Two months late, Florida lawmakers approve state budget," June 19, 2016

Tampa Bay Times, "What passed, what failed in Florida's 2015 legislative session," June 19, 2016

Florida TaxWatch, "Analyzing the Governor's FY2016-17 Budget and Tax Recommendations," November 2015

Miami Herald, "Gov. Rick Scott will seek $1B in tax cuts from Florida Legislature," Nov. 5, 2015

Miami Herald, "Gov. Rick Scott's proposed 'Florida First' budget: $79.3 billion, tax cuts," Nov. 23, 2015

Tampa Bay Times, "Bousquet: Gov. Rick Scott's $1B in tax cuts met with skepticism," Dec. 28, 2015

FloridaFirstBudget.com, "Tax Cuts Totaling Over $1 Billion for Florida Families," accessed Jan. 5, 2015

FloridaFirstBudget.com, "Policy and Budget Recommendations," accessed Jan. 5, 2016

FloridaFirstBudget.com, "Governor's Budget Recommendation — Implementing Bill," accessed Jan. 5, 2016

Florida Senate, SB 98, accessed Jan. 5, 2015

Florida House of Representatives, HB 115, accessed Jan. 5, 2015

Scott, lawmakers want to make three-year exemption permanent

Gov. Rick Scott is asking the state Legislature to permanently end a tax that's already been suspended.

His 2015-16 budget proposal includes the elimination of the state's sales tax on manufacturing equipment machinery purchases. Manufacturers first got a limited exemption in 2012. The following year, the Legislature suspended the tax entirely for three years, beginning in 2014 and lasting through April 30, 2017.

Scott's office has focused on the move as a means to boost the state's low-ranking manufacturing base, which the governor's office puts at 43rd in the nation. Business owners among the state's 18,000 manufacturers have lauded the tax's temporary suspension, as well as the possibility of it becoming permanent.

Florida TaxWatch, which has long advocated for doing away with the tax on manufacturing equipment, cites a state analysis that says a permanent change would cost the state $142.5 million a year after 2017. Local governments would lose $25.7 million of that, the group said.

Two bills have already been filed in the House and Senate to end the tax, one (SB 544) drafted by Sen. Dorothy Hukill, R-Port Orange, who originally sponsored the 2013 bill advocating for the three-year moratorium. This year, she also filed bills that would achieve some of Scott's other tax-cutting goals, including decreasing the communications services tax and knocking down the sales tax on commercial leases a percentage point.

Hukill told PolitiFact Florida that's Scott's staff was aware she was drafting and submitting the bills.

"They're issues I've been involved in for years," she said. "I didn't know when he was going to include these issues, but I know he supported them."

The Legislature has the final say on whether they will make the cut last forever when they fashion a 2015-16 budget. The legislative session begins March 3. Until lawmakers vote on the issue, we'll rate this promise In The Works.

Sources:

Florida Department of Revenue, "Exemption guidelines for expanding businesses," August 2012

Governor's press office, "Governor Rick Scott Pushes to Eliminate Taxes for Manufacturers," April 29, 2013

Daytona Beach News-Journal, "New tax break on equipment purchases boosts Volusia manufacturers," May 1, 2014

WCTV, "Gov Scott Highlights Elimination Of Machinery And Equipment Sales Tax," May 13, 2014

PolitiFact Florida, "Gov. Scott claims he 'cut taxes 40 times for Florida families'," May 21, 2014

Sarasota Herald-Tribune, "Lawmakers working on tax cut plans," Nov. 21, 2014

Tampa Bay Times, "Gov. Scott proposes $77 billion budget with $673 million in tax cuts," Jan. 28, 2015

Tampa Bay Buzz blog, "Scott's tax cuts get early boost in Senate," Feb. 2, 2015

Tampa Bay Buzz blog, "Faceoff: Tax breaks for cell phone users, or commercial landlords?," Feb. 3, 2015

Florida TaxWatch, "Analyzing the governor's budget recommendations for FY2015-16," February 2015

TrackBill.com, SB 544, accessed Feb. 26, 2014

Interview with state Sen. Dorothy Hukill, R-Port Orange, Feb. 26, 2015

Interview with John Tupps, Scott spokesman, Feb. 26, 2015