Every year since 1951, the St. Pete Times has published their annual preview of Florida’s Legislative Session, For a Better Florida. Here are their proposed 5 fixes for Florida:
Five fixes for Florida
ONE: Collect an internet sales tax
A Floridian who buys a book from Amazon.com doesn’t pay sales tax, but one who purchases it from a local merchant does. That’s unfair. Florida needs to join a 22-state group that has led to greater compliance by Internet retailers with state sales tax laws. Plus, by joining the Streamlined Sales Tax Governing Board, Florida would improve the chances Congress will take up the issue to make such tax collection easier nationwide. Potential revenue: $3 billion.
TWO: Reduce sales tax exemptions
Florida law contains $12.4 billion in tax breaks for specific goods — such as basic groceries and medicines. No one wants to tax food and medicine. But many exemptions don’t make sense and should be repealed, such as a break on bottled water and skybox tickets to college athletic events.
Potential revenue: More than $1 billion.
THREE: Tax services
Florida tried this in 1987 only to repeal it months later after caving to criticism. It’s time to try again with a more measured approach. It’s unfair that homeowners pay a sales tax on bug spray but not when they hire an exterminator; when they buy tax software, but not when they hire an accountant. Services — from lawyers to dry cleaners to accountants — are a growing part of the economy. They should not be exempt from sales taxes. Potential revenue: More than $7 billion.
FOUR: Close corporate loopholes
Florida allows out-of-state corporations to avoid paying state taxes on income from their subsidiaries here. The state should adopt a reporting standard like some two dozen other states and tax a portion of the corporation’s profits that can be tied to Florida. Potential revenue: $400 million. A tax-avoidance practice used by wealthy landowners to avoid real estate transfer taxes by creating limited liability companies also should be ended.
Potential revenue: $50 million.
FIVE: Raise cigarette and gasoline taxes, auto tag fees
Cigarette taxes have not increased in nearly 20 years. Nor have auto tag fees during the same period. The gas tax rate has stayed the same, although it is adjusted annually for inflation. A higher cigarette tax could help pay for Medicaid; gas taxes and auto tag fees could go to transit needs.
The combined potential revenue: More than $1 billion.
The Collins Institute recently released their updated Tough Choices Report, as well.
The Collins report makes several recommendations for Florida[‘s future], some bigger than others:
• We should not fall back into cheap incentives and tax breaks to attract growth, which threatens simply to repeat the cycle.
• We should join the 21st century by joining an interstate compact on taxing sales over the Internet — an outdated loophole that hurts native Florida businesses and leaves billions in revenue uncollected.
• We should add new construction to the tax rolls as it comes on-line, rather than the antiquated practice of waiting until the next year.
• We should make sure to recapture “green-belt” tax breaks on agricultural property once it is sold for development.
• We must re-fund higher education in Florida, the engine of economic development and the cradle of our intellectual future.
• We should modify the requirements of Florida’s class-size amendment for flexibility, and we should reform the Bright Futures scholarship program.
As the Legislature gears up for its 2009 session’s start on Tuesday, what issues would you like addressed?