Florida recently ranked No. 5 in having a business-friendly environment when it comes to taxes.
The Tax Foundation, a nonprofit, nonpartisan research group in Washington, D.C., looked at the tax climate in all 50 states, with the assumption that good state tax systems levy low, flat rates on the broadest bases possible and treat all taxpayers the same. The foundation looked at five taxation areas: individual income taxes, major business taxes, sales taxes, unemployment insurance taxes and taxes on wealth or assets such as property.
Some who are surprised at the ranking may be those in the marine industries who have seen Florida companies dwindle over the last few years, many recruited to North and South Carolina with tax incentives and offers of cheap prices on land and buildings. Locally, Wellcraft and Chris Craft have moved either all or part of their operations to the north.
Frank Herhold, executive director of the Marine Industries Association of South Florida, said companies have cited taxes as one of the reasons other states look more business-friendly.
“It may not be a major factor, but it adds to the list,” he said.
In fact, a major boating trade show — the International Boat Builders Expo — just decided to move its annual get-together from Miami to Louisville after seven years in the Sunshine State.
“They did a survey of the top 200 boat builders and found that they didn’t need to be in Miami anymore,” Herhold said.
But he is encouraged that Florida is heading more into business-friendly territory with the marine industry. The state’s passage last year of constitutional Amendment 6 “sent a very positive signal that Floridians want to ensure that waterfront marine businesses survive” by taxing them on current use and not perceived use.
Florida needs to focus on business retention, Herhold says, especially when there are states actively and successfully recruiting businesses.
Bob Bartz, president of the Manatee Chamber of Commerce, has a more optimistic view of the state and local environments for businesses. He wasn’t surprised at the state’s No. 5 ranking and sees the state as friendly taxwise for businesses.
“We are 47th out of 50 states with the lowest local property taxes,” Bartz said. “Manatee County is becoming very business friendly with its impact fees and enterprise zones. Commissioners have demonstrated that they do want business here, we have a good business environment.”
But Peter Straw thinks the state still has too many disincentives when it comes to manufacturing.
He has been working for years now on getting the state to eliminate the tangible property tax on manufacturing equipment.
“It never depreciates to zero, it reduces gradually over time, but you still pay tax on it (equipment) every year,” Straw said. “We are the only state in the Sunbelt that charges a tangible property tax.”
Kail Padgitt, who authored the 2010 State Business Tax Climate Index for the Tax Foundation, said a tangible property tax was not looked at specifically when considering the state’s ranking, although other business-to-business taxes were considered — including taxes on manufacturing machinery.
“We attempt to capture as large a picture of the tax climate as possible,” Padgitt said. “There are difficulties capturing many of the small eccentricities of every state’s code.”
So I’d say the state still has a ways to go in developing a fair taxing system. It’s true we have attracted new residents without a personal income tax. But in this tough economic climate, we need to scrutinize our taxes on businesses to see where the inequities lie.
Jennifer Rich, business editor, can be reached at (941) 745-7087.