Scott, lawmakers want to alter sales tax on commercial rents

As part of his $1 billion tax-cut wish list, Gov. Rick Scott has again recommended the Florida Legislature whittle down the state's sales tax on commercial leases.

This time he's got several lawmakers behind him.

Florida is the only state to levy this tax, a 6 percent charge on the total rent paid for any commercial property, including storefronts, offices and warehouses. Rentals for agriculture, nonprofits or government agencies are exempt.

In 2014, Scott asked the Legislature to shave a half a percentage point off the tax, which he has long advocated for eliminating entirely. The reduction wasn't in his budget proposal in 2015, but he revived it for his 2016-17 recommended budget. It's part of a package of suggested tax reductions that includes permanently repealing corporate income taxes on retailers and manufacturers and repealing the sales tax on manufacturing equipment.

Scott's proposal recommends dropping the state sales tax on rent to 5 percent for the 2017 calendar year. After that, the rate would be 5.64 percent. Over two years, that would reduce state revenue by $339 million, according to Scott's figures.

Several business and industry groups have rallied behind Scott, calling for the Legislature to pass the 1 percentage-point reduction. Florida TaxWatch has repeatedly opposed the tax, saying it "creates a disincentive for businesses to operate in Florida."

Scott had promised to phase out the tax entirely, which his proposed budget doesn't recommend. His office wouldn't elaborate for us about plans for the tax past 2017. But other lawmakers have their sights set on the tax, too.

State Sen. Dorothy Hukill, R-Port Orange, filed a bill last session to winnow the tax down to 5 percent, but it died in committee when the Legislature melted down during a deadlock over Medicaid expansion. In August 2015 she filed SB 116, which again aims to trim the rate to 5 percent. It has a companion bill in the House, HB 247, filed by state Rep. Heather Fitzenhagen, R-Fort Myers.

There's also a bill that would repeal the sales tax for good.

Rep. Larry Ahern, R-Seminole, filed HB 215 in September. His bill would allow exemptions to the tax retroactive to Jan. 1, 2016, reducing the taxable amount on rents until the tax is eliminated entirely in 2025.

Scott is again asking for a reduction in the commercial lease sales tax, and some state legislators are suggesting ways to make it happen. One of the bills would phase out the tax entirely. But until the Legislature takes action, we'll continue to rate this promise In The Works.