CHAMBER MEMBER SURVEY

OCTOBER 2003

SALES TAX REFORM

 

In the 2002 legislative session, tax reform was THE major issue. Then Senate-President John McKay wanted to expand Florida’s tax base by repealing certain tax exemptions, thus more revenue for the State. A referendum to create a “review committee” was agreed to by the legislature but the referendum was deferred by the State Supreme Court.

Since then, Mr. McKay (and other proponents) has proposed a new referendum whereby the legislature would review all existing exemptions and services/transactions excluded from the sales tax (except for: food; prescription drugs; health services; residential rent, electricity, and heating fuel). After their review, the legislature would reenact or continue only those exemptions that encourage economic development/competitiveness; support educational, governmental, literary, scientific, religious, or charitable initiatives or institutions; or secure tax fairness. All exemptions that are not reenacted shall be eliminated the following year. To reenact a sales tax exemption would require a three-fifths vote of the House and Senate.

 

1.       Define your business classification –

 

Retail                    17.9 percent

 

Manufacturer        9.8 percent

 

Professional          32 percent

 

Motel/Hotel          8.9 percent

 

Health Care          8.9 percent

 

Real Estate                                  11.5 percent

 

Restaurant                                    3.8 percent

 

Construction                     2.4 percent

 

Vacation Club Mktg         2.4 percent

 

Low Income Apts                          2.4 percent

 

2.       Do you collect sales tax now?

 

Yes            - 50.9 percent                            No - 49.1 percent

 

 

3.       In past 3 years, my business (net) has –

 

Increased: 48.4 percent

 

Decreased:           12.7 percent

 

Remained stagnant – 38.9 percent

     

 

4.       Do you think the State of Florida should expand the base from which it collects sales tax?

 

Yes, sales tax collected solely on retail goods is too narrow      33 percent

 

No, do not need to expand tax base                                             67 percent

 

5.       Would you support the legislature reviewing sales tax exemptions and re-enact them provided that such exemptions meet certain criteria?

 

Yes                        52.8 percent                            No       47.2 percent

 

 

 

Comments –

  • Our business would be significantly impacted in a negative way if there was a review of sales tax exemptions, since it is likely that corporate sponsorship sales tax exemptions could be repealed.  does not support a review of the sales tax exemption rules by the legislature.  Sports in Florida could be very negatively impacted should the sales tax exemption for corporate sponsorships be repealed.
  • Sales taxes should be universal, but progressive, with luxury items taxed at a higher rate and food and medicine at a lower rate.  Also, highway fuels should be taxed higher to pay for mass transit solutions and transportation infrastructure improvements.
  • As an economist, I advice Chambers to take the lead on this issue to prevent getting something not in anybody's best interest.  Specifically, Florida's extremely narrow taxable sales tax base makes us highly sensitive to unpredictable, volatile fluctuations in the overall economy and in tourism and other primary Florida business sectors.  Next year will be a very bad year of state and municipal deficits, prompting a wave of government service cuts in education/health/criminal justice/welfare, public employee firings, and tax and fee hikes.   This is unavoidable, as the state has already exhausted its rainy day and trust funds.  "Tax the tourist" can only go so far as tourism becomes an increasingly smaller share of the state's maturing economic base.  When the current real estate appreciation & building boom peaks (if it already hasn't), that source of tax revenue will be exhausted.  Need to repeal the 3% caps on re-assessment, which favors the wealthiest home estate owners as well as inducing them to not relocate to a more optimal site.  Same thing happened in California after Prop 13 was passed.
  • Along with broadening the base, the sales tax rate should be lowered.  The main purpose is to provide more consistent revenue, especially in economic downturns.
  • No tax or governmental regulation of the internet.
  • Lower all taxes, make government fiscally responsible; throw “tax & spend” politicians out! 
  • I’m against changes to sales tax laws except for simplification/clarification of existing tax law.
  • Some exemptions should remain, others should not.
  • Once again, service businesses that are competitively fee based would be hurt by such action, since it would be a difficult argument to add sales tax on to a commission or to raise a commission rate to compensate.  Instead, we would simply have to eat the loss.
  • How do I know?  I have no idea of the state’s fiscal needs.
  • We generate our income solely from out of state.
  • Florida’s tax structure is one of the worst in the country.  Dependence on a regressive sales tax is particularly bad.  Combine that with a Bush League concept like a lottery and you’ve got the worst of all worlds.  If we have to live with the sales tax a blue ribbon committee with minimum conflict of interest should examine and have authority to eliminate certain exceptions to the sales tax  Don’t look to the legislature to do an honest job.
  • We just had 30% increase in property tax.  City of DB is in competition with the down town store selling souvenirs.  We don’t like DB city politics.
  • Allow casinos.
  • We should not tax advertising or the web.  Local economy is stagnant.  Most increase is web sales.  The Speedway and special events kills more business days every year and drives away long term visitors to area.
  • Collect taxes on internet sales.
  • As long as exemption remains for health services which includes long term care.
  • No additional taxes, please.  Government should strive for efficiency, not just “tax and spend.”
  • I pay:   6.59% food, monthly sales & use, monthly liquor surcharge, property intangibles tax and previously ??????
  • The sales tax law is confusing. There is little done to educate business owners. The law is difficult to decipher because exemptions are scattered throughout the law.

 

(101 surveys)