tbo: Tampa Bay Online.
Thursday, Jul 27, 2017

Reject misleading tax break

The Legislature is asking voters to give certain businesses another across-the-board cut in local property taxes, apparently in an attempt to create jobs. The value of this change is overrated, and we do not support it. Amendment 10 would increase the exemption on tools and other business equipment from $25,000 to $50,000. Supporters say small businesses need this break. Lower business taxes, supporters argue, would allow more jobs to be created, and more jobs would bring benefits to everyone. Voters should be aware that the change could force local governments to either lay off workers or shift costs to other taxpayers by raising tax rates or adding fees. Direct tax breaks to targeted businesses would be a better way to attract the best jobs.
Tangible business property is the equipment businesses use to make money. Taxable items include furniture, signs, computers, machines and similar equipment. It does not include business inventory or money. And it does not include personal household goods or vehicles. Four years ago, businesses were given a $25,000 exemption on their tangible property. According to a study by the watchdog group TaxWatch, the change exempted 80 percent of Florida businesses from all tangible taxes. The new amendment would give another break to the remaining 20 percent. The assumption is they really need it, but some are so large that saving $500 or so in taxes would be inconsequential. Utility companies, for example, pay nearly a third of all the tangible taxes collected in the state. Another part of the amendment would allow cities and counties to add an exemption of any size. A city or county could totally eliminate tangible taxes. We prefer a uniform system of property taxes. Allowing the basic rules to vary from county to county and city to city would add confusion to an already confusing system. An estimated 7.5 percent of the value of all taxable property in Florida is tangible business property, and it varies greatly from county to county. In Hillsborough, it's 11 percent. In Hardee, it's nearly 52 percent. Statewide, a TaxWatch analysis shows, 43 percent of the tangible-tax revenue goes to schools. Thirty-six percent goes to county government, 13 percent to cities, and 8 percent to special districts. None goes to the state, which helps explain why state lawmakers were nearly unanimous in putting this measure on the ballot. They won't have to make up the lost revenue. Amendment 10 wouldn't help most small businesses. They're already exempt. The change would increase the risk of higher property tax rates for all taxpayers, including homeowners. It does nothing to make the state's tax system fairer or more understandable. We doubt it would create jobs. On Amendment 10, we recommend no.
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