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Florida legislators push tax break for buyers of planes, boats

TALLAHASSEE — At the same time lawmakers are slashing the state budget, considering laying off dozens of government workers and increasing fees and taxes, they are also pushing a break for the richest Floridians.

A bill moving through the Legislature would cap the sales tax on boats and planes at $25,000. It's being called the Aviation and Maritime Full Employment Act.

"The bill does exactly what the name suggests: It is designed to create jobs and spur economic growth," Rep. Tom Grady said before a House panel voted Tuesday to advance the proposal.

But the move comes as lawmakers have agonized over closing existing sales tax exemptions to help plug a $3 billion budget hole — an exercise that has all but been abandoned.

"It's ridiculous," said Rep. Scott Randolph, D-Orlando. "We're talking about increasing the cost of a driver's license and other fees, and now we're going to hand out tax breaks to those who can afford yachts and planes? People would be outraged."

The bill has another committee stop in the House before going to the full 120-member body, and it has several stops in the Senate. But time is running out.

Proponents, however, have garnered some Democratic support along the way by arguing it is more about economic stimulus than carving out a tax break.

"I'm certainly not in favor of giving more tax breaks to the rich and famous, but I do want to make sure we can protect business and keep people employed," said Sen. Nan Rich, D-Sunrise, who voted for the Senate version last week.

"It's a balancing act," added Rich, who is concerned about millions in cuts to child welfare services.

Grady, R-Naples, said that people are avoiding the sales taxes now by buying a plane elsewhere and storing it in another state or registering a vessel in the Cayman Islands or some other tax-friendly location.

That not only costs the state tax revenue on the purchase, Grady said, but makes it less likely the owner will spend money on related goods and services in Florida — not unlike a new homeowner going out and buying furniture and drapes. A tax break could change that behavior, he said.

"Someone might want to beat up the rich. I don't," Grady added after the committee meeting. "Anybody with capital to invest in the state of Florida, where jobs can be created, I want them here. I want their money here. I want their planes here. I want their boats here."

State economists estimate the cap will cost state coffers $8.1 million annually and local government $1.1 million.

The analysis did not project the economic benefit, which Grady suggested would be far greater.

The state Department of Revenue said Tuesday that it has no way of knowing how much tax is avoided currently.

Ron Book, a lobbyist for the Florida Yacht Brokers Association, argued Tuesday that the cap should be closer to $10,000 to $12,000 — the price, he said, of registering a boat in one of the island regions.

"Unfortunately," Book said, "the system that we've got encourages that."

Florida legislators push tax break for buyers of planes, boats 04/14/09 [Last modified: Friday, April 17, 2009 4:40pm]
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