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What coronavirus crisis? Florida corporations get tax breaks in Senate plan

“We have, as you well know, a series of crises in this state that need funding,’’ one expert said.
Florida Senator Rob Bradley, R- Fleming Island.
Florida Senator Rob Bradley, R- Fleming Island. [ SCOTT KEELER | TAMPA BAY TIMES ]
Published Mar. 11, 2020
Updated Mar. 12, 2020

TALLAHASSEE — Despite concerns about a global recession caused by the coronavirus, Florida senators on Wednesday proposed tens of millions of dollars in new tax breaks that would benefit large corporations.

The package, voted out of the Senate Appropriations Committee, is $42 million larger than the $193 million package approved by the House last week and was intended as a way to strengthen the Senate’s bargaining position against the House as they negotiate a budget in the final days of the legislative session.

But during a 90-minute meeting scheduled in the final week of the legislative session, no senators uttered the word “coronavirus” or asked whether it was wise to cut revenue when Gov. Ron DeSantis was asking for an additional $25 million to combat the virus, known as COVID-19.

Senate Appropriations Chairman Rob Bradley, R-Fleming Island, mentioned a potential economic downturn and said its $231 million tax cut proposal would likely come down.

“Everything was a jump ball today, and the committee wanted to add some tax breaks for consideration and this thing moves to the floor,’’ he said after the meeting. “I see that the tax package will ultimately be leaner than what you see.”

Among the giveaways is a provision in the bill that would prohibit sales taxes on tickets to Formula 1 Grand Prix racing events, matching the sales tax exemption given to professional sports teams. The Miami Grand Prix could be hosted next year at Hard Rock Stadium, owned by billionaire Miami Dolphins owner Stephen Ross.

“It allows him to continue to press to bring events to our community and generate jobs, sales tax revenues and the like,’’ said Ron Book, Ross’ lobbyist who worked to persuade the Senate to add the proposal to its tax package.

Making the tickets tax-free would cost the state an estimated $2 million in tax revenue each year, state economists estimate.

Shorter tax holiday

But while some companies would pay fewer taxes, Florida families would have only three days for the annual back-to-school sales tax holiday this summer — down from the 10 days originally proposed by the Senate.

The largest piece of the tax-cut package is a $60 million reduction in the state communication services tax that would save anyone who purchases a mobile phone, video or satellite service 0.5% on every dollar of taxes.

Bradley said the communications tax break, and the annual sales tax holidays for back to school and disaster supplies, are unlikely to be touched as the package is scaled back later in session. Legislators are scheduled to adjourn Friday but are likely to miss their deadline and come back into an overtime session next Wednesday.

The biggest difference between the House and Senate tax bills is a $27 million discount for affordable housing that would hit county coffers, a $5 million tax break to encourage businesses to contribute to charitable organizations that provide services focused on child welfare and a $2 million tax credit for the World Golf Hall of Fame in St. Augustine.

Karen Woodall, a lobbyist for the Florida Center for Fiscal Policy, urged lawmakers to “tread lightly on the loss of recurring revenue” when they complete the final package.

“We have, as you well know, a series of crises in this state that need funding,’’ she said.

Because it’s so dependent on tourism, Florida’s economy is unusually susceptible to fears over the novel coronavirus, which the World Health Organization declared a global pandemic on Wednesday.

State lawmakers initially discarded fears over the virus’ impact on state revenue. But after Miami canceled its Calle Ocho festival and Ultra Music Festival mega-concert, they said they were reconsidering the tax cut package.

Cuise lines have started laying off contractors, airlines have been cutting flights, and hotels are hoping to weather what they hope is a short-term drop in tourism, according to Nathan Line, a professor at the Dedman School of Hospitality at Florida State University. The one measurable loss will be revenue from corporate and organization conferences in Florida, he said.

“An organization that cancels a conference this spring isn’t going to have two conferences next year,” Line said.

Big winners

Both the House and Senate plan to also include moving forward with a $543 million refund to the largest corporations in the state.

Among the other big winners in the Senate plan are: rental car companies, Florida Power & Light, and mobile home builders, each of which would pay less taxes next year.

Sen. Kelli Stargel, the Sebring Republican who sponsored the Senate package, said the goal of the proposal was to introduce “many issues into the tax package to be discussed.”

“The whole of this bill is to get it in a posture to balance our tax package,’’ she said, “recognizing too we have a lot of competing factors as we go across the state.”

Sen. Anitere Flores, a Miami Republican, succeeded in amending the bill to remove two provisions that would require Miami-Dade and other counties to use tourism development money to pay for septic tanks to be converted into sewer. The issue has raised concerns by local tourism development officials that they could lose significant funds at a time when they need to offset the impact of the novel coronavirus.

The Senate included a proposal by Stargel to create the Children’s Promise Tax Credit, a $5 million per year program to encourage businesses to contribute to charitable organizations that provide services focused on child welfare.

The idea is opposed by Sen. Lauren Book, a Plantation Democrat and chair of the Children, Families and Child Welfare Committee. She said the proposal was part of a bill that has never been heard in her committee. She said she fears it could encourage businesses to contribute money to organizations that have not been properly vetted. Book proposed removing the provision from the bill, but it failed along party lines.

The Senate removed a House provision to spend $5 million to reduce the aviation fuel tax, a provision sought by the commercial airline industry but it left the following provisions in:

▪ A $42 million three-day back-to-school sales tax holiday Aug. 7 through Aug. 9.

▪ A $5.6 million seven-day disaster preparedness sales tax holiday in from May 29, 2020, through June 04, 2020,

▪ A $60 million reduction in the state communication services tax by lowering the communications services tax by 0.5% for anyone who purchases a mobile phone, video or satellite service.

▪ A $33 million, 0.1% reduction, in the Sales Tax on Commercial Leases, also known as the business rent tax.

▪ $6 million to rental car companies, a provision sought by Avis, Enterprise and Hertz.

▪ $20 million to companies that operate or rent heavy machinery.

▪ $1.8 million a year to allow Florida Power & Light and other utilities to delay the date on which they start paying taxes on dozens of solar energy plants under construction across the state.