Manufacturing equipment sales tax suspension made permanent

The Legislature may have shunned the lion's share of Gov. Rick Scott's tax-cut wish list, but lawmakers did do away with the state's sales tax on manufacturing equipment.

The sales tax originally was cut back with a limited exemption in 2012, but the following year was suspended by legislators for three years. Starting in 2014, the tax would not apply through April 30, 2017.

Scott and business groups wanted the suspension to be permanent, and it was on the agenda in Scott's 2015-16 budget proposal. But the issue was lost when lawmakers squabbled over health care issues, and the 2015 legislative session deadlocked.

Scott tried again to make the suspension permanent in his 2016-17 budget recommendation, as part of a $1 billion tax-cut package.

He predicted in his budget proposal that a permanent change starting in 2017 would cost the state $76.9 million in revenue per year, starting in 2017. Tax watchdog Florida TaxWatch had advocated a permanent cut, estimating it would save businesses $73.1 million in taxes annually. The sale of manufacturing equipment went up an average of about 11 percent per month while the exemption has been in place.

While the Legislature refused to consider most of Scott's proposed tax cuts, making the suspension permanent was part of an eventual $129 million tax-cut package that included a sales tax holiday on school supplies. Lawmakers focused more on figuring out how to freeze property tax bills for contributions to education spending.

While Scott is still looking for more tax cuts, he was successful in getting the sales tax on manufacturing equipment permanently removed, with a year left to go on the temporary suspension. We rate this a Promise Kept.