Gov. Rick Scott on Wednesday proposed eliminating the sales tax paid by manufacturers when they purchase equipment, part of his ongoing effort to cajole companies to move to Florida and get those already here to add workers.
There already is a sales tax exemption for new equipment but to qualify companies must prove they’ve increased their “productive output” by 5 percent after buying the equipment. Until Jan. 1, they had to show they’d increased output by 10 percent, but lawmakers reduced the requirement during last year’s legislative session at the urging of Scott.
But the governor said Wednesday in interviews and a statement from his office that even the requirement for showing a 5 percent increase in production is too much of a burden for businesses, and that other states don’t require companies to jump through that kind of hoop to get a tax break to expand.
“We need to eliminate that so Florida companies are not at a disadvantage,” Scott said early Wednesday on WOKV radio in Jacksonville.
At an appearance at Vistakon-Johnson & Johnson Vision Care’s manufacturing facility in Jacksonville later Wednesday, Scott said he would ask legislators to eliminate the requirement entirely.
Scott said there are currently 17,500 manufacturers in Florida and they employ more than 300,000. Scott said eliminating the barrier to buying new equipment could also help the state’s ports – a key business goal for the governor in an industry he sees as an economic engine.
“Manufacturing accounts for almost 90 percent of Florida exports that depend on our ports,” Scott said in a statement. “Small businesses make up nearly 96 percent of the state’s exporting firms and produce 67 percent of the state’s total exports. Building up Florida manufacturing is about building up Florida jobs all across our state.”
Scott’s office also said he hopes to use Quick Response Training money in the budget to help workers from other industries – particularly construction, which is still struggling – move into manufacturing jobs. Scott said earlier he will ask lawmakers to double the amount of money spent on the QRT program to $12 million.
In November, Scott announced he would ask the Legislature to double QRT funding to $12 million. QRT grants are handed out by the Department of Economic Opportunity for training for new or expanding businesses. DEO says in the fiscal year that ended at the end of June, the program handed out $5.9 million in grants and that resulted in the creation of just under 4,000 jobs and a 47 percent average increase in wages.
The effort to eliminate the productivity requirement for getting a sales tax break on new equipment has also been a top priority of the Manufacturers Association of Florida.
While Scott has recently spoken frequently of wanting to focus heavily on improving schools in the remaining two years of his term, he has definitively staked the success or failure of his administration on the number of jobs created. Unemployment has dropped during the time he’s been governor and now, at 8.1 percent, is at its lowest since 2008, and down from a peak of 11.4 percent in early 2010.
by David Royse
