The hidden cost of economic development
| Economic development could cost the state of Florida an estimated $900-million this year. The biggest chunk of that -- $792-million -- is the potential revenue Florida loses through a series of tax breaks designed to encourage companies to invest in the state and create jobs. Because tax returns are confidential, it's often impossible for the public to find out which companies benefit and how much they get. Here are some of the tax breaks and an estimate of how much revenue Florida will lose because of each in 2004-2005 and 2005-2006. |
| Tax Breaks |
2004-2005 estimated cost
|
2005-2006 estimated cost
|
| Corporate Income Tax | ||
| Allows for a deduction of wages paid for targeted jobs in Florida |
$2,500,000
|
$2,700,000
|
| Credit of 5% of capital costs for up to 20 years |
$100,000
|
N/A
|
| Credit for contributing to community projects |
$3,900,000
|
$4,200,000
|
| Credit for hiring in certain urban high-crime areas |
$1,400,000
|
–
|
| Credit for hiring in certain rural areas |
$1,500,000
|
–
|
| Credit for creating jobs in enterprise zone |
$900,000
|
$1,000,000
|
| Credit to new and expanding businesses in enterprise zone |
$1,000,000
|
–
|
| Credit for child care facilities operated by a business for its employees |
$2,000,000
|
$2,000,000
|
| Exemption for certain banks catering to foreign customers |
$9,800,000
|
$10,500,000
|
| Deduction for businesses that do research and development in conjunction with state universities |
$3,100,000
|
$3,300,000
|
| Documentary Stamp Tax | ||
| Exemption for certain international banking transactions |
$29,700,000
|
$25,900,000
|
| Insurance Premium Tax | ||
| Credit for a % of wages paid to employees located in Florida |
$196,900,000
|
$214,900,000
|
| Credit for investing in certain venture capital firms |
$15,000,000
|
$14,800,000
|
| Credit for contributing to community projects |
$500,000
|
–
|
| Credit of 5% of capital costs for up to 20 years |
$300,000
|
$1,700,000
|
| Intangibles Tax | ||
| Exemption for accounts receivable, money owed to a company by a customer for products and services provided on credit |
$56,600,000
|
$57,800,000
|
| Motor Fuel Tax | ||
| Refund for fuel taxes paid by air carriers with employees in the state |
$10,900,000
|
$12,100,000
|
| Sales and Use Tax | ||
| Exemption on leases or rentals of property used for movie production |
$4,900,000
|
$5,200,000
|
| Exemption to encourage commercial fish breeding and beekeeping |
$100,000
|
$100,000
|
| Exemption on items manufactured for research and development activities |
$32,100,000
|
$33,000,000
|
| Exemption for items manufactured for movie productions |
$8,500,000
|
$9,000,000
|
| Exemption for printing for out-of-state customers when they provide the paper |
$15,900,000
|
$16,300,000
|
| Exemption for sales or leases of materials and equipment used by film schools |
$ 800,000
|
$900,000
|
| Exemption on equipment purchased by new businesses |
$24,100,000
|
$24,000,000
|
| Exemption on equipment purchased by expanding businesses and spaceports |
$26,300,000
|
$13,400,000
|
| Refund for certain movie and recording equipment |
$2,600,000
|
$2,700,000
|
| Exemption on equipment purchased by expanding printing facilities |
$9,400,000
|
$10,600,000
|
| Exemption for motion picture video equipment |
$4,700,000
|
$4,900,000
|
| Refund for certain motion picture or recording equipment |
$2,600,000
|
$2,700,000
|
| Additional movie exemptions |
$13,800,000
|
$16,000,000
|
| Exemption for building material used by businesses in enterprise zone |
$300,000
|
$300,000
|
| Refund for certain depreciable equipment used by businesses in enterprise zones |
$2,100,000
|
$2,200,000
|
| Exemption for equipment used in silicon technology |
$2,500,000
|
$2,600,000
|
| Exemption for semiconductor clean rooms |
$100,000
|
$100,000
|
| Exemption for machinery and equipment used by the defense and space industry |
$2,100,000
|
$2,200,000
|
| Exemption for businesses that do certain aircraft modifications |
$25,700,000
|
$24,700,000
|
| Exemption on construction materials used in single-family homes in enterprise zone |
$300,000
|
$400,000
|
| Exemption on building materials in redevelopment projects |
$400,000
|
$500,000
|
| Credit for contributing to community projects |
$8,000,000
|
$8,400,000
|
| Exemption for newspapers and magazines delivered by mail |
$11,300,000
|
$11,700,000
|
| Exemption on labor charges for repair and maintenance of certain airplanes |
$2,700,000
|
$2,800,000
|
| Exemption on labor charges for repair and maintenance of certain helicopters |
$200,000
|
$200,000
|
| Exemption on parts and labor for certain aircraft repair and maintenance |
$2,700,000
|
$2,800,000
|
| Exemption on electricity charges used to operate manufacturing machinery and equipment |
$52,300,000
|
$57,500,000
|
| Exemption on purchase of solar energy systems |
$1,200,000
|
$1,300,000
|
| Exemption on shipping, parts, and labor for machinery repair |
$12,700,000
|
$13,900,000
|
| Exemption on sales or lease of certain aircraft by airline companies |
$2,800,000
|
$3,000,000
|
| Exemption on materials used by certain printing businesses |
$6,400,000
|
$6,700,000
|
| Partial exemption on aircraft brought to Florida for repairs |
$6,900,000
|
$7,200,000
|
| Partial exemption on equipment purchased, used or leased to produce records, tapes and motion pictures in Florida |
$28,200,000
|
$29,600,000
|
| Exemption on electrical charges used in enterprise zone |
$400,000
|
$400,000
|
| Exemption on satellites, space vehicles and property placed on satellites |
$131,000,000
|
$128,500,000
|
| Credit for creating jobs in enterprise zone |
$1,400,000
|
$1,500,000
|
| Credit for hiring in certain urban high-crime areas |
$5,600,000
|
$5,900,000
|
| Severance Tax | ||
| Credit for sales tax paid on equipment and machinery by new and expanding phosphate mines |
$2,900,000
|
$2,900,000
|
| Total these exemptions, deductions, refunds or credits: |
$ 792,100,000
|
$807,000,000
|
| Sources: 2004 and 2005 Florida Tax Handbooks, Florida Senate | ||