Corporate tax loophole stays open
House Republicans beat back an effort Thursday by the chamber's Democratic leader to raise an additional $364.5 million for the recession-wracked state budget by changing the way multi-state companies pay their Florida corporate taxes.
In defeating the measure on a 10-6, party-line vote, Republicans cast Rep. Dan Gelber's proposal as a tax increase that could push corporations out of Florida, costing jobs, or prompt them to raise prices.
"My constituents go to Wal-Mart or Target because that's all they can afford," said Rep. Frank Attkisson, R-St. Cloud. "They know corporations don't have to take (taxes) from profit. They can take it by raising the price off the bread basket."
But Gelber said that Florida's ruling Republican lawmakers are going to have to consider closing such tax "loopholes," in the face of a $3 billion budget shortfall this year and a proposed tax-swap constitutional amendment that could leave an even bigger budget hole in coming years.
"You're going to have to get serious about tax fairness in Florida," said Gelber, D-Miami Beach.
Gelber's proposal would require companies to be taxed on the income of all their affiliated holdings, not just on revenues generated within the state of Florida. Twenty-one states currently have such combined reporting requirements, including the four states that are home to the most Fortune 500 headquarters.
The approach is similar to the unitary tax that Florida enacted under former Gov. Bob Graham in the early 1980s but swiftly repealed amid fierce opposition from the business community. That proposal went farther than Gelber's -- having also made international holdings subject to state taxes. Florida was among the few states at the time imposing such a tax system, officials acknowledge.
Gelber also said he wasn't blaming companies. "They're not evading taxes. It's a loophole we allow," he said.
But Gelber's push was a no sale to the Republican-controlled Government Efficiciency & Accountability Council. Among those opposing the measure were the Florida Chamber of Commerce, Florida Retail Federation and Associated Industries of Florida.
"The worst time for a tax increase is when you're in a recession," said Rep. Carl Domino, R-Jupiter.
John Kennedy, Tallahassee Bureau
POSTED IN: Tallahassee (24)





