Senators pass bill to close doc stamp loophole
The Senate Finance and Tax Committee finished its work Monday on the plan to close the doc stamp loophole, that allows companies to transfer property to a limited liability corporation to avoid paying the state's documentary stamp tax.
The proposal, which sets state law back to the way it was before a 2005 Florida Supreme Court decision ruled in the Crescent case that the transfer was a legal way to avoid taxes, has two more stops before it reaches the floor. The bill also extends Miami-Dade County's surcharge on real estate transactions of 45 cents on every $100 of value, to finance the county's affordable housing program. The measure was set to sunset in 2011 and this extends it for another 20 years.
Since the 2005 court ruling, three South Florida prime commercial properties were recorded as selling for $10 each, paying a total taxes of $2.10, said Sen. Al Lawson, sponsor of the bill. The value of the property was $600 million and without the loopholes, would have netted the state $4.2 million in real estate transaction taxes.
"According to the reports, that’s equal to selling 1500 homes at $500,000 a piece,'' Lawson said. "That is ridiculous that we have that kind of loophole in the state.'' He said that New York, Texas and California have closed similar loopholes and Florida should be next.
Committee members expressed concern that the attempt to close the loophole could hurt family businesses that want to transfer property to keep it in the family.
Lawson and Sen. Dan Gelber, who sponsored the second piece of the committee substitute, said they would keep working to clarify that issue.
Before the conclusion of the meeting, Finance and Tax Committee Chairman Thad Altman officially announced, what we had reported last week, that the committee will not complete its review of sales tax exemptions this year. Their busy agenda, pushing through the cigarette tax or "surcharge", as he calls it, the corporate income tax bill and the doc stamp bill, has consumed their time. They next will focus on implementing constitutional amendments and putting future amendments on the ballot.
" I think we've made some real progress that we can build on in future years,'' Altman said.
, that’s equal to selling 1500 homes at $500,000 a piece,'' Lawson said. "That is ridiculous that we have that kind of loophole in the state.'' He said that New York, Texas