06/15/2007
The Florida Legislature concluded their work on property taxes, delivering the largest tax cut in Florida history that will benefit residential and commercial property owners.
Earlier this year in the property tax debate, wholesale changes to Florida's tax structure, such as the idea of increasing the sales tax to finance deeper property tax cuts, were seriously considered. The final package includes no tax increases to offset the property tax rollback. However, that doesn't rule out the possibility that commercial property tax rates won't be pressured to compensate for the richer cuts provided to residential tax rates in the years to come.
The plan has two major components: statutory changes that will become effective immediately upon the governor's signature, and proposed constitutional changes that must win approval of 60 percent of the voters in a statewide election Jan. 28, 2008.
The statutory changes will freeze both residential and commercial property tax rates at the current fiscal year. In addition, cities and counties will be required to rollback property tax rates either 3, 5, 7 or 9 percent, based on a formula that gives the larger tax reductions in cities and counties where taxes have risen the most in recent years.
The statewide average residential tax reduction is $174; the statewide average commercial property tax reduction is $1,000. The total value of the tax reduction plan is $31 billion over five years.
The proposed constitutional changes would expand Florida's homestead exemption beyond the current $25,000. Under the plan, the first $200,000 of value would be 75 percent exempt; $300,000 to $500,000 in value would receive an additional 15 percent exemption. Florida's Save Our Homes, which locks residential property tax increases to no more than 3 percent, would be repealed under the same proposed constitutional amendment … sort of. In a last minute effort to prevent unintended tax hikes, the proposal was amended to allow any homeowner the option of choosing to stay under the Save Our Homes provision.
The final portion of the proposal directly addresses small-business owners' need for relief by exempting out the first $25,000 in assessable Tangible Personal Property Tax base. The proposal would remove the Tangible Personal Property exemption issue from the Constitution, and place it in the Florida Statutes, so that the legislature may continue to increase this exemption over time without the difficulty of amending the constitution. The proposed constitutional amendment will be put before the voters in a statewide election Jan. 29, 2008. To become a law, it must gather 60 percent of the voters' support.
NFIB has a clear ballot position in support of the changes to the Tangible Personal Property Tax, but because the issue is attached to the additional proposed changes to the Homestead Exemption and Save Our Homes, NFIB will be balloting our members specifically on the proposed constitutional amendment to determine our position.
