Florida Taxation IssuesFinance & Taxation Committee

Tax & Budget Reform CommissionOctober 4, 2007

Vicki Weber, Hopping Green & Sams P.A.Tax Consultant, Florida Chamber of Commerce

Florida Chamber

139,000+ Member Businesses

3 million+ Employees

80%+ Small Businesses

Member concerns

Tax Competitiveness

Recommendations

Member Concerns: Property TaxMember Concerns: Property Tax

97% experienced tax increases81% more than 10% increase67% more than 20% increase

85% tax growing faster than revenues

Member Reactions to Tax IncreasesMember Reactions to Tax Increases

Reduce employee benefits (health care)Cut inventory or cut or freeze hiring

Raise prices/lower profitsShelve expansion plans

Decrease advertisingSell rental property

Leave Florida

Member RequestsMember Requests

Halt rate of tax/spending increasesFix inequities across taxpayers

Address unpredictability of taxesMake assessments more consistent with income that

can be earned on propertyAddress SOH lock in

Address shifting of tax burdens

COST Report on Business TaxesCOST Report on Business Taxes

Council on State TaxationNon-profit trade association

550 multi-state corporate membersFounded by Council State Chambers

Florida Chamber of Commerce Member

E&Y “Total State and Local Business Taxes”

COST ReportCOST Report

What are total taxes business pays the state?

How are current state and local business taxes affecting the state’s economic competitiveness?

Business Taxes as % of Private Sector GSPFY 2005

Florida 5.4%Georgia 4.0%Alabama 4.2%South Carolina 4.4%North Carolina 3.7%U.S. Average 4.8%

E & Y ReportE & Y Report “Property Taxes on Business Capital” “Property Taxes on Business Capital”

Competitiveness Index—Measures property tax relative to estimated net stock of business

structures and equipment.

Competitiveness Index

Florida 1.02Georgia .90Alabama .61South Carolina 1.27North Carolina .72U.S. Average 1.00

RecommendationsRecommendations

Comprehensive property tax reform Property Taxpayer Bill of RightsSupport streamlined sales tax

No automatic sales or services tax

Property Tax AffordabilityProperty Tax Affordability

* Reasonable statutory rate caps for across-the-board relief.

*Address SOH re-distribution and “lock-in” problems.

Property Tax AffordabilityProperty Tax Affordability

Address “highest and best use” valuation standard so property owners are not

subject to taxes that are grossly disproportionate to income that can be

earned on the property.

Property Tax Property Tax Affordability/SimplicityAffordability/Simplicity

Provide relief to business/rental property owners by providing exemption for tax on

tangible personal property.

Property Taxpayer Bill of Rights

Presumption of Correctness Burden of Proof

Uniformity in Assessment CriteriaValue Adjustment Board Improvements

Interest on OverpaymentsAttorneys Fees

Streamlined Sales Tax Project

Florida should become a full member of the Streamlined Sales Tax Project and

encourage the Florida Legislature and Congress to approve necessary

implementing legislation.

Expansion of the Sales Tax Base

No objection to reviewing exemptions and exclusions from tax

Crossroads Study encouraged broad base and low rate

Concerns Related to Expansion of the Sales Tax Base:

Automatic Taxation

Taxation of Business Inputs

Thank you for your service to Florida.