Local governments support elimination of tangible perosnal property tax

Feb 23, 2012

When it comes to property taxes, Florida’s local governments usually find themselves on the opposite side of the issue from the state’s business community.  But Tom Flanigan reports there was a rare show of agreement Thursday  during the Senate Finance and Tax Committee meeting.

Senator Nancy Detert brought what’s called a “Senate Joint Resolution” before the committee.

“This is a proposed amendment to the constitution that, if adopted, would provide additional property tax exemption for tangible personal property.”

Actually the name “tangible personal property” is a bit of a misnomer, Detert says, because it only involves property owned by persons who are business persons.

“Even to the smallest businessman, it’s a tax on your chair, your desk, your computer, and it’s a tax forever on the same equipment until you get rid of the equipment.”

This particular bill had its origins in Governor Rick Scott’s office.  But local governments were quick to condemn it because it would reduce their property tax collections.  In the case of some smaller counties, the reduction would be particularly painful.   So the governor’s office redrafted the bill in the form of what’s called a “strike all” and that’s what Detert was bringing before the senate committee.

“The original intent of the bill is to provide additional exemption for tangible personal property tax for up to $50,000.  It’s currently at $25,000, so this would cover from 25 to 50-thousand dollars.  It also provides the legislature with the authority to allow the local governments to provide additional exemptions for tangible personal property if they wish.”

The proposed amendment’s new wording drew applause from the local governments that had opposed the first draft.  Amber Hughes with the Florida League of Cities saying it would cost Florida cities just under three-million dollars in taxes; a small investment for what they believed would be a much larger return.

“Given the fact that cities are on the forefront of economic development and are excited to have an additional tool in the tool belt to form their packages to attract businesses, we are definitely behind this amendment and would urge you to support it.”

Davon Suggs with the Florida Association of Counties estimated a huge number of existing businesses would benefit…

“We believe it would take 150,000 businesses…it would remove the requirement for them to have to file for T.P.P.”

The acronym for “tangible personal property”.  That would work out to nearly half of all Florida businesses.  Bill Herrle is the Florida head of the National Federation of Independent Business..

“This is uniquely tailored to small businesses.  This does not have a dollar benefit for businesses with more than $50,000 in tangible personal property assets and we’re very excited to have the support of the cities and counties.  Look forward to working with them next year on how they’re going to use this new tool to encourage economic development.”

And committee member Thad Altman, Republican of Melbourne, noted this was one of those rare occasions when state lawmakers were urging a local tax cut that cities and counties actually wanted…

“You know, so much of our tax reform has singled out local governments and they’re providing emergency law enforcement, fire, ambulance services, recreational services so we just can’t keep putting that monkey of just local government.”

With everyone agreeing the property tax break would be a good thing, the committee passed the resolution and sent it on to the senate floor.