Florida's businesses cheer tax cuts in new state budget

4:37 PM, Mar 12, 2012   |    comments
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TALLAHASSEE, Fla. - Florida's new state budget is getting mixed reviews.

Critics are jeering funding cuts for higher education and hospitals, while supporters are cheering tax cuts for business.

Next year's budget includes a big break for businesses on their unemployment compensation taxes. It will save employers more than $800 million over the next three years by lowering the minimum tax from $170 per employee to $120. The current rate is $72 per employee.

The taxes are used to pay unemployment benefits to jobless workers. Florida has been forced to borrow more than $2 billion from the federal government to pay those benefits. Now the state is trying to pay off that debt over a longer period so it can lower the unemployment tax rate.

State lawmakers also expanded the exemption for corporate income taxes from $25,000 to $50,000 and that will remove about 4,000 businesses from the tax rolls.

Jose Gonzalez of the business lobbying group Associated Industries of Florida says the Legislature's efforts to keep taxes low are crucial as employers try to bounce back from tough economic times.

"We see gas prices going up and so anytime that you can maintain or contain those increases for employers, it's very important especially when we now that small business is beginning to see some signs of life. These are the real job creators."

Gonzalez is also applauding state lawmakers for passing a back-to-school sales tax holiday.

The new state budget includes a three-day sales tax break from August 3 - 5.

It will eliminate state and local sales taxes on a long list of items, including clothing, footwear, wallets, and bags that cost $75 or less and school supplies that cost $15 or less.

Gonzalez says consumers win and so do retailers.

"It's good for two reasons. First it helps the everyday Floridian when it comes to paying a little less taxes, but it also drives activity to our retailers in the state so we that as a win-win."

Estimates indicate the tax break will save shoppers more than $30 million over the three-day holiday.

The new state budget takes effect July 1.

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