No Go For Commercial Lease Tax Cut

May 08, 2014 No Comments by

Real estate lobbyists saw a bid to cut taxes on commercial leases fail for the second time.

In an election year when legislators offered sweeping tax cuts, real estate industry advocates couldn’t sell lawmakers on a proposal that would shave $235 million from state coffers.

Even with powerful support, Senate Bill 176 couldn’t drum up enough support in the Senate. An earlier version sought to remove Florida’s distinction as the only state that collects tax on commercial rent, levying a 6 percent fee that generates $1.2 billion in annual revenue. This year’s bill would have cut the tax from 6 percent to 5 percent.

“Of course we’re disappointed it didn’t pass. This is an issue we feel strongly about,” said Trey Goldman, legal counsel for Florida Realtors. “It does have a big fiscal impact, but the way to approach it is to take a small bite. That way you can have a small impact that won’t affect the state’s budget in the same way it would if you tried to do it all in one year.”

Going into the session, industry supporters were backed by Gov. Rick Scott, who pledged $100 million in the state budget to phase out commercial lease taxes as part of sweeping cuts totaling $500 million for fiscal year 2014 and 2015.

But the Legislature wanted broad-based tax cuts and settled on an agreement that once again disappointed. Instead of allocating funds to phase out the tax, negotiators settled on $395 million to lower vehicle registration and title fees and $105 million for three tax holidays on energy-efficient appliances, hurricane provisions and back-to-school supplies.

There was one bright spot for the industry and a hint that legislators expect the issue to resurface. House Speaker Will Weatherford promised a comprehensive study before the start of the next session to determine the effect of reduced commercial lease taxes on state revenue.

“In an election year with the governor also up for re-election, the Legislature was trying to do a lot of things for a lot of people. Next year will be different. Every year has new concerns, but next year won’t quite be like this year,” Goldman said. “I think we will revisit this issue. It’s not just important for Realtors. We believe it’s important for commercial businesses of all sizes, and we’re going to keep trying.”

 

Source:  DBR

 

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