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State's tax climate among best

Florida ranks fifth in an index of business tax friendliness, but relocation tax lures are criticized.

By HELEN HUNTLEY
Published October 11, 2006

Florida remains among the nation's most tax-friendly states for business, economists at the Tax Foundation said Tuesday. However, they criticized the tax incentives Florida and other states use as bait to entice companies to relocate.

Foundation president Scott Hodge said the group opposes "corporate welfare."

"Good state tax systems levy low, flat rates on the broadest bases possible, and they treat all taxpayers the same," the foundation said in its report.

The group's annual Business Tax Climate Index, released Tuesday, is intended to "give lawmakers a benchmark comparison with other states as well as a road map with improvements they can make to make their states more attractive to business investment," Hodge said. "How a state taxes business is just as important as how much."

Florida came in fifth in the Business Tax Climate Index, the same ranking it had last year.

Florida scored high based on the lack of a state income tax and business-friendly rules for calculating unemployment, corporate and sales taxes.

The state's lowest score was for property taxes, based on the overall tax burden. The score might have been lower, but the foundation does not collect and break out information about the share of property taxes paid by businesses. That share for businesses has grown in recent years because the Save Our Homes amendment limits the annual increase in taxable value for homeowners.

"A shifting of the tax burden would not be captured, only the overall movement up or down," said Curtis Dubay, one of the study's authors. But he said putting a larger share of the burden on businesses could hurt efforts to attract companies to the state.

"Commercial property taxes are one of the most important issues in business location decisions," he said.

Helen Huntley can be reached at hhuntley@sptimes.com or 727 893-8230.

[Last modified October 10, 2006, 23:30:00]