The Greater Tampa Chamber of Commerce's board of directors on Thursday endorsed a proposed sales tax exemption for the purchase of new manufacturing machinery.
The exemption, one of Gov. Rick Scott's goals for the legislative session, is being proposed through Senate Bill 518 and House Bill 4013.
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Creating the exemption would save manufacturing companies an estimated $141 million a year, according to the chamber, and the money saved could be spent on job creation, expansion and capital investment. The chamber noted that Florida ranks 49th when it comes to capital expenditures on manufacturing, with companies here spending less than a fifth of the average of money spent in the top 10 states.
In a statement released through the chamber, Creative Sign Designs president and CEO Jamie Harden said, "the sales tax we recently paid on equipment could have gone to salaries for one or two individuals to run those pieces of equipment."
"Eliminating the sales tax on manufacturers will provide a boost to companies, allowing them to invest more in human capital," Harden said.
Florida is one of 13 states plus the District of Columbia that tax the purchase of machinery and equipment used for manufacturing.
Florida factories already do enjoy a tax exemption on purchases of machinery, but only if it boosts output by 5 percent annually. Last year, Scott and the Legislature cut the requirement for productive output from 10 to 5 percent, which saved manufacturers an estimated $46 million per year. The governor has said eliminating taxes on manufacturing investments also would benefit ports and small businesses that support manufacturers.
But creating the exemption also would come at a cost to state and local governments.
State officials estimate that eliminating the sales tax on manufacturing equipment would reduce state revenues by $57.7 million the first year and $115.3 million each year after that. The Florida Department of Economic Opportunity also estimates that the exemption would cost local governments $13 million the first year and $26 million annually thereafter.