State & Local Tax Blog

So Exemptions are Called “Loopholes” Now — Winds of Change Are Blowing In Florida

Get ready Floridians, John McKay has you in his sights. See this article in the Bradenton Herald. And I quote: “The finance committee of Florida’s Taxation and Budget Reform Commission has decided unanimously that the Legislature should have to review hundreds of sales-tax exemptions and exclusions, and revamp Florida’s sales-tax system.

The measure opens the door for a plan suggested by Bradenton businessman and former state Senate president John McKay earlier this month. His plan calls for property taxes to be slashed by 40 percent, and replaced by about $9 billion worth of repealed sales-tax exemptions and exclusions that have allowed hundreds of materials and services to go untaxed for years.”

What’s interesting to me is that McKay calls these exemptions passed into law for a reason by the FL legislature “loopholes”. That’s going too far. Here’s the quote in the article from Florida TaxWatch director of tax research Kurt Wenner, “A review of exemptions and services is a good thing. However, the rhetoric about there being $27 billion in loopholes is just wrong. The vast majority of exemptions are there for a reason, and mostly legitimate reasons.”

What politicians seem to forget is that state’s have legitimate reasons to encourage businesses and individuals to live and work in their state. People and businesses can vote with their feet and politicians can stay there and tax the few remaining companies into oblivion.

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