Florida Senator Joe Negron to File Legislation Eliminating Insurance Industry Tax Credit for Employee Salaries

 

Florida Senate Appropriations Committee Chairman Joe Negron is expected to file legislation this week that would eliminate a 30-year-old tax break allowing insurance companies to claim tax credits equal to 15 percent of salaries they pay to their Florida employees. 

Savings from repealing this tax break are estimated to be $220 million and, according to Senator Negron, could go toward partially eliminating a vehicle tag registration fee increase passed by the Legislature in 2009.

Colodny Fass& Webb will monitor and provide updates on this development.

A report by The News Service of Florida is reprinted below.

 

Should you have any questions or comments, please contact Colodny Fass& Webb.

 

Joe Negron:  Cut Vehicle Registration Fees

By Jim Turner
The News Service of Florida

Eliminating a quarter-century-old tax credit for the insurance industry could allow the state to reduce the annual vehicle registration fees that were raised during the heart of the Great Recession, Sen. Joe Negron, R-Stuart, chairman of the Appropriations Committee proposed on Thursday.

Negron, who intends to formally present his proposal as a committee bill, predicted that by eliminating the tax credit established in 1987, motorists overall could see up to $220 million a year in savings if the 2009 vehicle registration fee increase was cut in half.

When the economy tanked at the end of 2008, lawmakers the next year, desperately seeking revenue but unwilling to raise taxes, made a controversial decision to raise fees on drivers instead. Opponents said it was regressive — hurting poor people as much or more than the wealthy.

The move, as lawmakers were facing a $6 billion shortfall, increased vehicle registration fees by 35 percent, as the cost of renewals, titles and driver licenses all were boosted.

“We were all elected, and we should make decisions that reflect our priorities today,” Negron said during the committee meeting on Thursday.

Senate President Don Gaetz, R-Niceville, quickly sent out a release supporting Negron’s proposal.

“In 2009, during a difficult budget year, the Legislature made the hard choice to increase certain fees associated with driving a vehicle in lieu of raising taxes, or taking draconian cuts to critical state services,” Gaetz said. “However, times have changed and it is time that we reprioritize and evaluate ways to keep more money in the pockets of hard-working Floridians.”

The insurance industry tax credit was designed to offset the Insurance Premium Tax.

But Negron noted that only one other state, Arkansas, offers a similar discount that has allowed insurance companies to get rebates of 15 percent of the salaries of their employees in Florida.

House Speaker Will Weatherford, R-Wesley Chapel, expressed interest in the proposal after the House session on Thursday, but said he’ll have his budget chairs review the plan.

“It’s an interesting idea,” Weatherford said. “I’m not a fan of those taxes, either.”

House Minority Leader Rep. Perry Thurston, D-Fort Lauderdale, intends to approach the proposal with caution.

“We would think that it would be a good idea to bring down the costs to everyday Americans who have to drive because in Florida we don’t have mass transit,” Thurston said.

“But we’re concerned about those type of proposals, because when you’re given incentives we want to know who is getting the benefit of those incentives,” he added. “Is it for working Floridians or are we just giving a handout to a big company without them having to be accountable, which we wouldn’t support?”

 

 

Click here to follow Colodny Fass& Webb on Twitter (@CFTLAWcom)

 

 

To unsubscribe from this newsletter, please send an e-mail to Brooke Ellis at bellis@cftlaw.com.