To Florida Senate, join House in cutting business rent tax

Florida's "jobs" governor has worked tirelessly to recruit out-of-state businesses to the Sunshine State. Manatee County's economic development strategy incorporates that element, too, among others.

Yet a state tax little known outside the business world creates a disincentive for companies to open businesses in Florida. The state's business rent tax levies a 6 percent charge on the total fee paid for commercial properties such as storefronts, warehouses and offices. Nonprofits, governments and agriculture are exempt.

Florida is the only state in the country that taxes commercial leases, a blot on marketing the state's business-friendly climate.

Worse, the levy is not based solely on just the rent but includes property taxes, maintenance fees and insurance costs. The state collects $1.7 billion annually from this lease tax, which dates back to 1969. Oddly enough, the lease levy serves as a tax on a tax, in this case on property taxes. This constitutes unreasonable double taxation.

It's time to start shaving the percentage and lifting this burden on both current and future businesses, especially small ones. Gov. Rick Scott has once again targeted this levy for a reduction as part of his overall $1 billion tax cut package.

While the Legislature opposes most of the governor's priorities -- with the Senate's chief budget writer, Sen. Tom Lee, R-Brandon, calling the cuts "fiscally irresponsible" -- the lease tax is particularly onerous and would improve the state's business environment. The House apparently agrees -- with passage of a bill that trims the tax by two percentage points over two years. That would eliminate $410 million in revenue during the first year.

The Senate, however, is balking because recurring tax reductions are "not sustainable" since they will leave gaps in future budgets, according to Lee.

But at the same time, shrinking this tax would boost business recruitment, job growth and company expansion -- thus generating new revenue for the state treasury.

The governor has long promoted the total elimination of the lease tax. As Scott stated in advance of the 2014-2015 legislative session, a reduction in the lease tax "will make it more affordable for businesses to lease space, so they can keep more of the money they earn and create more jobs."

In this year's list of state legislative priorities, the Manatee Chamber of Commerce calls for legislation that would cut the levy by one percentage point annually until the tax zeros out and is abolished. The chamber is a member of the Business Rent Tax Coalition, which represents 31 statewide, regional and local organizations.

The coalition's goal is the elimination of the rent tax to put more money into job creators' hands so they can hire additional employees, increase worker pay and benefits and reinvest in their businesses.

The Florida Chamber of Commerce organized the coalition to convince the Legislature that the rent tax makes Florida a less attractive place for business relocations and development. The goal is creating a more competitive business climate.

The Senate should be listening to all these voices -- their constituents -- and join the House on this issue.

This story was originally published February 18, 2016 at 12:00 AM with the headline "To Florida Senate, join House in cutting business rent tax ."