Amid economic uncertainty caused by the coronavirus, a half-a-billion dollar corporate tax refund looks guaranteed for Florida’s big corporations.
Despite a convulsing economy, Florida’s largest corporations look assured of pocketing a $543.2 million tax refund in coming weeks, with state Republican leaders refusing to delay a scheduled give-back.
The massive refund will not go to smaller businesses, with virtually all shielded from the state’s 5.5% tax on the income businesses earn in Florida.
But Gov. Ron DeSantis, Senate President Bill Galvano, R-Bradenton, and House Speaker Jose Oliva, R-Miami, say it’s important that the state’s biggest companies get the refund they expected – even as uncertainty dominates the lives of Floridians and most businesses because of the coronavirus.
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“The corporate taxpayers who are entitled to receive these automatic tax refunds under the law have anticipated these refunds and have likely made business decisions around them,” said Ryan Ash, a DeSantis spokesman.
He said the money “will inject capital back to employers at a time when they need these dollars to continue operations and employment.”
But with Florida’s economy all but frozen and job losses mounting daily by the thousands, critics say it’s not right that the state’s largest companies are guaranteed a payout set before the coronavirus took hold.
Critics say DeSantis should use his executive authority during the pandemic to at least postpone the refund while the state evaluates its finances.
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“Refunding $543 million to corporations is a spending decision and it’s a bad one at this time,” said Rep. Carlos Guillermo Smith, D-Orlando. “It should not be a priority of the leaders of a state that is worrying about how to pay for teachers, health care and transportation needs as our tax collections disappear.”
Sales tax collections provide $3 out of every $4 of state general revenue. And lawmakers expect they’ll soon have to slash spending on a host of state services because of the downturn in tax receipts.
The state’s $93.2 billion budget proposal, recently approved by lawmakers, is set to take effect July 1. It includes $3.9 billion in reserves, but the depth of the state’s revenue loss is still not clear, raising further questions for some about the wisdom of going ahead with more than half-a-billion dollars in corporate refunds.
“I don’t see how you, in good conscience, can do this,” said Rep. Evan Jenne, D-Dania Beach.
The state’s Chief Financial Officer, Jimmy Patronis, didn’t directly address the corporate tax refund. But he’s been advocating for a swifter evaluation of the state’s finances in the wake of the coronavirus.
“That’s why I have advocated for delaying action on the budget until we get more tax collection information in April,” Patronis said.
DeSantis also has said he’s in no hurry to sign the state budget into law.
The corporate tax refund stems from the federal Tax Cuts and Jobs Act of 2017. The law gave companies major federal tax savings, but also increased for some their state tax liabilities. The Florida Legislature subsequently approved a measure requiring the state to refund corporate income tax collections above a certain level.
State economists agreed on the $543.2 million refund amount. It is set to be distributed by May 1.
The amount of refund companies receive will vary, based on their tax liability. Tax payments and their payers are not a public record.
“While the rest of the country is working to reduce burdens on businesses as they grapple with the impacts of the coronavirus on their workforces and their revenues, I do not support Florida creating an unanticipated tax burden by withholding refunds corporations have planned on an built into their business plans for the year,” Galvano said.
Fred Piccolo, an Oliva spokesman, said, “They are not tax giveaways. (Oliva) would not support halting the return of money owed because decisions have been made by businesses based on those refunds.”
The Florida Chamber of Commerce was among a host of business associations which pushed for the refund, against the backdrop of the federal tax overhaul. The refund has not been a priority lately, said Edie Ousley a chamber spokeswoman.
“We’re myopically focused on helping workers keep their jobs and businesses from going under,” Ousley said. “It’s too soon to tell what potential actions may or may not need to be taken as we work to protect and strengthen Florida’s economy during this global pandemic and after it ends.”