Tax cuts aim to spur economic development in Florida

by Boardroom Brief Staff on March 30, 2012

Businesses stand to gain $120 million in tax breaks, thanks to a bill Florida’s Governor Rick Scott signed into law on March 28. HB 7087 offers a collection of treats for business: it cuts a host of taxes, doubles the corporate income tax exemption, and even brings back the popular back-to-school sales tax holiday. The new law is designed to create stability and profitability for businesses operating in the state.

Under the new law, the corporate income tax exemption – the amount of income exempt from the tax – increases to $50,000 from $25,000, reducing the sheer number of businesses (especially small businesses) subject to the corporate income tax.

Many of the tax cuts or exemption increases in HB 7087 pertain to specific industries: manufacturers, fruit and meat packers and companies that purchase industrial machinery and equipment.

HB 7087 also reprises the back-to-school sales tax – temporarily eliminating state or local sales taxes on certain clothing and school supplies – to take place the first weekend in August.

Business gains also seen in unemployment compensation

Gov. Scott also signed an unemployment compensation bill, HB 7027, into law on March 28.

The cut to the minimum tax rate businesses pay per worker in the system – from $171-per-employee to $121-per-employee – is expected to save companies an estimated $800 million over the next three years.

HB 7027 also successfully delays rebuilding the state’s trust fund used to pay unemployment benefits, which is necessary because a still-fragile economy cannot sustain the prospect of an $817 million unemployment compensation tax increase, according to groups pushing for the measure including the Florida Chamber of Commerce, Associated Industries of Florida and the National Federation of Independent Business.