Joshua Gillin
By Joshua Gillin March 28, 2016

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.

Joshua Gillin
By Joshua Gillin January 6, 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.

Joshua Gillin
By Joshua Gillin February 26, 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.

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