Gov. Rick Scott's effort to steadily eliminate the state's corporate income tax took a hit during the 2013 legislative session.
The proposal, SB 562 and HB 401, failed to get any traction among lawmakers in 2013. Scott, meanwhile, did not do much to push what was once a campaign priority and included in his budget recommendations. His press office declined to elaborate when we asked why.
"The Legislature failed to act on this recommendation,” said spokesman John Tupps.
The measure, which received just one committee vote between the two chambers, would have increased the exemption for the corporate income tax from $50,000 to $75,000. Expanding the exemption would have spared 2,000 more businesses from paying the tax, Scott has said.
The history: As a Capitol n00b, Scott called on legislators to slice the corporate income tax rate from 5.5 percent to 3 percent, with the rest of it being phased out through 2018. That did not work out.
So Scott settled on a roundabout way of doing it: relieving businesses of paying the tax by upping the amount of income exempt from the tax.
In his first year, Scott lobbied to exempt the first $25,000 worth of taxable income, up from $5,000. In 2012, he got the Legislature to raise the exemption to $50,000. In all, the changes spared more than 12,000 Florida businesses from paying the corporate income tax.
The tax comprises about 9 percent, or $2 billion, of the state's general revenue, according to the Department of Revenue.
Scott told the state real estate agents group that raising the exemption to $75,000 would benefit about 2,000 businesses, according to the Tampa Bay Times/Miami Herald. Scott's press team has said the new exemption would mean 80 percent of Florida businesses would be exempt from paying the tax.
The lawmakers who sponsored the proposal said there was support for it in the Legislature, but it didn't hold up to other pro-business priorities. Rep. Ross Spano, R-Dover, said there was not enough room for the measure in the budget "because it came with an approximate $20 million fiscal impact."
In the Senate, leaders were supportive but felt like they were just looking to spread their wings, said Sen. Dorothy Hukill, R-Port Orange.
"Some people that I spoke to felt like we had been in this arena before,” Hukill said.
But the Legislature was still business-friendly, she said, pointing to the compromise between Scott and lawmakers granting a three-year exemption on sales taxes on manufacturing equipment.
To a Democrat, the Legislature's slow-down on corporate income taxes and consideration of ending a 26-year insurance industry tax break was welcome.
"It gives me hope that there's a little bit of a shift in philosophy,” said Sen. Jeff Clemens, D-Lake Worth, the only member who voted against Hukill's bill. "It seems like for the last several years we"ve continued to give corporate tax breaks while the average working person got nothing.”
So where does this leave Scott's promise to eliminate the corporate income tax? After two years of exempting businesses from the tax, the Legislature halted Scott's progress by refusing to consider legislation that would have relieved more businesses.
We rate this pledge Stalled.