The year in review and looking forward to 2017
Senator Thad Altman, R-Rockledge, and Representative Charles Van Zant, R–Keystone Heights, the co-chairs of the Legislature’s General Aviation Caucus, again filed legislation to repeal the tax on aircraft sales and leases. Even though the legislation was the same as in 2015, the difference this time was that we had an economic impact study to demonstrate how many additional aircraft would be sold and how many jobs would be created, if the sales tax was repealed. AOPA, NBAA, and FAC, joined FABA, at both of the recent Gen¬eral Aviation Caucus meetings to make the tax repeal a legislative priority for the Caucus. Discussions were held with the governor, his staff, and legislative leadership in both the house and Senate prior to session.
Initial indications from the house were very good that the aircraft sales tax repeal would be included in the house tax package, the legislation that would include all of the tax repeals and tax-free holidays for the coming fiscal year. Governor Scott had two legislative priorities for the 2016 Session: make one-billion dollars in tax cuts and two-hundred-fifty million in economic incentives for businesses. We were encouraged that our thirty-million dollar aircraft sales tax repeal became a minimal fiscal impact when compared to what the governor had requested, and compared to what the house was pledging to accomplish. However, mid-way through session, economic projections from the state’s Revenue Estimating Conference indicated a more than four hundred million dollar shortfall for fiscal year 2016-2017, and concern that additional downward projections might be necessary. As a result, the house failed to pick up Rep. Van Zant’s proposed legislation.
However, the Senate began to take interest in the sales tax repeal and Senator Dorothy Hukill, R–Port Orange, Chair of the Senate Finance and Tax Committee, put Senator Altman’s bill on the committee’s agenda. FABA, AOPA, and others testified in support of the bill. Our own Bob Showalter explained the reality that with New York repealing its taxes on aircraft sales, Florida would now lose additional sales and jobs to New York. The bill passed unanimously with a number of senators expressing their enthusiasm for the legislation.
Having the Senate bill passed favorably by the Finance and Tax Committee meant that our issue was still in play and that it could be included in the tax package assembled by the house and Senate at the end of session. The Senate bill was then placed on the agenda for its second committee of reference, the Transportation, Economic Development Appropriations Committee.
We were thrilled that the legislation was continuing to move. As Senator Altman’s bill was presented before the committee it became clear that a group of Democrats and one Republican senator, Nancy Detert, R-Venice, decided to target the bill for defeat. Their argument was that the thirty-million dollars in lost in tax revenue would negatively impact citizens who rely on state funds. Fortunately, Senator Diaz de la Portilla, R-Coral Gables, and Senator Sachs, D– Delray Beach, made impassioned pleas about the positive economic impact that repealing the tax would have on Florida’s economy. The bill passed, six to two.
The celebration over the progress of the Senate bill was short-lived when the House and Senate failed to agree on the governor’s two priorities. Instead of a one billion dollar tax cut, the legislature would agree to one-hundred-twenty-nine million, and instead of two-hundred-fifty million in economic incentives they agreed to no change in economic incentive. The smaller tax package meant there would only be room for sales tax holidays and the permanent repeal of the manufacturing tax. We would have to come back next year to try again.
Two good things to have come out of this legislative session are: 1) the tax repeal legislation finally got two committee hearings, which didn’t happen last year, and 2) the creation of the General Aviation Caucus has already been a success by bringing legislators together to discuss important issues like the sales tax repeal. With session now over until the legislature organizes in November, we will begin planning for the 2017 session. As we said before, let’s not lose the momentum that has been created.