Manufacturing Sales-Tax-Exemption Bill Moving Through Both Chambers

Apr 10, 2013

A bill that makes it easier for manufacturers to get a sales tax exemption has started moving in the Florida House. Supporters of the change say it will create high-paying jobs, but some lawmakers are worried about taking away tax revenue.

One Democrat joined Republicans in a committee vote on Wednesday, to make it easier for manufacturing companies to qualify for sales-tax exemptions. Rep. Clovis Watson (D-Gainesville) said, he understands his fellow Democrats’ hesitation, but he’s a convert. When he was city manager of Alachua, he said, he was criticized for allocating more than $300,000 for electrical infrastructure to attract business. But it paid off.  “We brought in Cicso Foods, which is a freezer company, as you all well know. Within less than three years, we recouped all of those funds, and we received funding in perpetuity, and also created a little over 1,000 jobs,” he said.

Rep. MaryLynn Magar (R-Hobe Sound) is sponsoring the tax-exemption bill. She says, the state already gives a sales-tax exemption to manufacturers buying production equipment. And her bill just makes it easier for them to qualify. “This will eliminate barriers for manufacturers to take advantage of the existing sales tax exemption,” she said. “And this bill will reduce bureaucratic paperwork and red tape that hampers small businesses and that will lead to more stable, high-wage jobs, and that will increase opportunities for all Floridians.”

By “reducing red tape,” Magar means, her bill would throw out the current requirement that manufacturers prove their productivity before they’re given the exemption. But, taking that accountability away has some lawmakers concerned.

Rep. Hazel Rogers (D-Lauderhill) said, the state needs to be able to measure how tax exemptions positively affect the economy. “I’m not against creating jobs. I need jobs in my district,” she said. “But documented returns is important to this representative, and it’s important to the taxpayers to know that whatever we are selling, that we know what we are getting.”

Magar said, what Florida would get, is manufacturing companies relocating to the state and giving people jobs with salaries averaging more than $50,000. And those people would need things like food and clothes, so other businesses would follow. She said, studies show that for every dollar that’s invested in manufacturing, more than $1.40 is put back into the economy.

Before the Economic Development and Tourism Subcommittee voted on Wednesday, Rep. Matt Hudson (R-Naples) said, he didn’t understand how there was even debate on the bill. “So, we can continue to do the same things we’re doing over and over again and we can wonder why we’re a service state and not a manufacturing state, or we could step up to the plate and we could get the job done,” he said.

The manufacturing sales-tax exemption has been a priority for Florida Gov. Rick Scott, who called for it in his State of the State address. The bill still has a couple more committee stops in both the House and Senate.

And another bill, this one aimed at bringing in tourism dollars to the state, also passed the committee on Wednesday. It would create a government commission for developing black historical sites as tourist destinations.

Sen. Geraldine Thompson (D-Orlando) is sponsoring the senate version of the measure. “Florida has a rich history that we have not capitalized on,” she said. “This will bring an additional niche market to the state of Florida and increase the revenues that we generate.”

The bill passed the House committee unanimously and has two more stops in both chambers before it goes to the floor.