House panels turns down $365M in tax revenue

Mar 20, 2008

St Pete Times

Divided on party lines, a House council moments ago turned down Rep. Dan Gelber's proposal to end a corporate tax "loophole" and generate $365-million at a time of severe budget deficits.

Gelber, D-Miami Beach, was going after corporations that export earnings in Florida to subsidiaries in other states by leasing intellectual property. HB 1237 would have put $100-million toward higher education and $265-million toward reducing property taxes for schools.

No one in the room expected it to get past the House Government Efficiency & Accountability Council, with business interests casting it as a tax increase and paperwork nightmare. "Shall we bring out the grim reaper?" chairman Frank Attkisson joked before the 10-6 vote.

"The losers are the consumers," said Rep. Rob Schenck, R-Spring Hill. "The $365-million will be made up elsewhere." Some questioned whether the revenue figure was overstated, though that is what the Florida tax handbook estimates is lost annually.

Gelber, who said 21 other states have adopted a form of combined reporting, agreed it was not tax evasion. "It's a loophole we create and allow to exist."

He chided Republicans for opposing the measure at a time of profound budget shortfalls and reminded those who see it as a tax increase that they voted for a bill last year to increase the sales tax by 2.5 cents in order to eliminate property taxes on primary homes.

"Is a company going to leave Florida because of this?" Gelber asked. "We're not attracting these big companies here. They are using and exploiting us because we have this huge corporate loophole That's what's going on here. It's not fair to say otherwise."

House Republicans issued a statement after the vote taking credit for turning back "Democrats' job-killing tax hike."

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