Sunday, June 19, 2011

Fla. corporate tax repeal brings back memories

The state's corporate income tax is 5.5 percent, generating about $2 billion annually - approximately 9 percent of the state's general revenue and second only to sales taxes, which generate about $17 billion. The state has no personal income tax. General revenue accounts for about a third of Florida's $69.1 billion budget and pays for most of the state's operating expenses including education, prisons, courts and health and human services.

Only about 30,000 mostly large corporations - less than 1 percent of Florida's business entities - are taxed. That number is expected to be halved to about 15,000 by a bill (HB 7185) awaiting Scott's signature. It will increase the amount exempted from the tax from the first $5,000 of instate net income to $25,000 - that will cost the state about $30 million. The average corporation that pays the tax will save $1,100.

As a first step toward repeal, Scott proposed cutting the tax rate to 3 percent this year. Lawmakers, who were facing a potential $3.7 billion budget deficit, balked at the $458 million price tag. As a compromise, the exemption bill was passed - but Scott promises to push the issue again next year.

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