With Legislature wary of bigger exemptions, Scott proposes $770 million tax cut for businesses

Gov. Rick Scott is again calling for the Legislature to get rid of the state's corporate income tax, despite lawmakers' resistance over the past few years.

Scott made it something of a personal mission to eliminate the 5.5 percent tax on net income for corporations by 2018. The tax is a windfall for the state, bringing in about $2 billion in revenue each year. He first wanted it cut to 3 percent and then eventually done away with, but legislators didn't budge. So Scott stopped asking for a full removal and started asking for steadily increasing exemptions.

That plan worked in 2011, when the Legislature increased the exemption from $5,000 to $25,000. In 2012, they moved the exemption up to $50,000, letting about 12,000 businesses off the hook for any income taxes at all.

But then the phaseout was held up, and so was Scott's promise. Subsequent attempts to raise the exemption to $75,000 have fizzled as lawmakers have balked at draining state coffers any more.

Scott asked for $1 billion in tax cuts in his 2016-17 budget recommendation, with the corporate income tax being the biggest bite, a move businesses understandably support. His proposal asks the Legislature to permanently eliminate the tax for manufacturing and retail businesses, which he estimates will cost the state $770 million in annual revenue. (Florida TaxWatch says that figure would be about $385 million for the 2016-17 fiscal year, since it would only start after Jan. 1, 2017.)

Completely eliminating the tax may be a tall order, with lawmakers and Scott already disagreeing about how much the state can afford to mete out in tax reductions. Bills filed in the state Senate (SB 76) and House (HB 219) seek to revive a potential $75,000 exemption.

Until the Legislature acts on either increasing the exemption or repealing it entirely, we'll continue to rate this promise Stalled.