The Florida Legislature is currently in session and is considering a host of difficult decisions including substantive issues like education and transportation, as well as fiscal matters including taxation and budgets. Although state legislative activity can seem far removed from the Sarasota region and our individual circumstances, these kinds of decisions have very real consequences in our daily lives, our businesses and our quality of life. Of particular note are two tax-related bills that directly impact area businesses.

One bill proposes extending a narrow tax exemption that makes our state more competitive. Florida law provides a 6-percent sales and use tax to be levied on tangible personal property. Generally, we all see this additional charge on things we buy at stores. Florida law outlines certain exemptions to this tax for various items or for specific circumstances. One of those exemptions is the industrial manufacturing and equipment sales tax exemption that was approved in 2014 for three years and is set to expire on April 30, 2017. The exemption specifically applies to industrial machinery and equipment purchased by certain eligible manufacturing businesses and used within the state.  

Within the state of Florida, there are more than 18,600 manufacturing companies with over 321,000 manufacturing employees. These companies produce everything from aerospace products to food and beverages to boats and have a significant direct economic impact. Indirectly when one manufacturing job is created, it generates an additional three to five jobs in ancillary businesses including transportation and retail.

Another tax issue that will be decided during this session concerns the business rent tax. If a business rents a physical building, they usually pay property taxes as a portion of their rent (it is “passed through” to them) and then they pay an additional 6-percent tax just for leasing the space. Florida is the only state in the country that assesses a sales tax on a business lease, which costs Florida businesses an estimated $1.7 billion annually. The proposed legislation reduces this tax by 1 percent (down to 5 percent) which will return $289 million per year to businesses.

So how does this affect you? Or me? These bills, and others like them, directly affect us and our community through our business owners. If the Legislature votes to permanently exempt this manufacturing equipment, those dollars can be reinvested back into local jobs and businesses, which will work to grow and diversify our economic base. If the business rent tax is reduced, the money business owners save can be reinvested in the business to expand and hire new employees.  

For more information, visit www.leg.state.fl.us. The industrial manufacturing and equipment sales tax exemption legislation is found in House Bill 115 and Senate Bill 98. The business rent tax legislation is located in House Bill 247 and Senate Bill 116.

Amy Farrington is vice president of Public Policy and Sarasota Tomorrow Initiatives for The Greater Sarasota Chamber of Commerce.