Advertisers oppose tax-swap amendment listen07/10/08 SeÃ¡n Kinane
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Today the Tampa Bay Advertising Federation held a luncheon meeting to discuss the tax-swap amendment that will be on Novemberâ€™s ballot. Amendment 5 calls for a 25 percent reduction in property taxes. But local advertisers are concerned that up to $11 billion in new taxes would have to be raised, hurting their businesses.
If Amendment 5 passes, Floridians will no longer pay the Required Local Effort (RLE) portion of their property tax that goes toward funding schools. But the tax-swap amendment says that schools must be held harmless â€“ the Legislature must make up that lost revenue. Itâ€™s likely that part of that gap will come from a new tax on services like advertising, according to Michael Anderson, the district government relations chair for the American Advertising Federation (AAF).
â€œI think itâ€™s one of the biggest tax increases that weâ€™re facing in Florida that could wreck our economy.â€
The tax-swap amendment could add an additional penny in state sales tax, but that would still leave a shortfall of up to $5.4 billion, making a new tax on services a near certainty, according to Jack Hebert, a lobbyist with the American Advertising Federation.
â€œWe think that it ultimately leads to a services tax. We tried that experiment in 1987.â€
Hebert was referring to a 1987 tax on some services that was enacted by the state Legislature. "The net result was that it became such a nightmare," Herbert said, "that it became counterproductive and within six months the Legislature was forced to repeal it."
Floridaâ€™s advertising businesses would be especially affected if the tax swap amendment is passed and a tax on services is implemented, Anderson said. The ad industry could face $500 million in new taxes.
Hebert said a tax swap where Floridians pay less property tax and more in other taxes would reduce the federal income tax exemptions many homeowners claim for their property taxes â€“ in effect reducing their tax savings by 18 percent. Hebert told the advertisers they should â€œcreate an atmosphere of fear and doubtâ€ about Amendment 5 so that people will be inclined to vote â€œno.â€
Hebert said that removing tax exemptions for things such as ostrich feed and luxury sky boxes at sporting events would generate less than 1/20th of a percent of the revenues that would be needed to cover the lost property taxes earmarked for education.
State Sen. Victor Crist, a Republican representing parts of Pasco and Hillsborough, is in the advertising business and opposes Amendment 5. â€œItâ€™s going to be very confusing, it is not a tax reduction.â€
WMNF asked Crist how the Legislature would make up the $11 billion shortfall if the tax-swap amendment passes.
"At this point itâ€™s too early to tell. The scariest part of this is that theyâ€™re gambling on our children," Crist said. "This is a terrible idea."
State Sen. Mike Fasano, R-New Port Richey, told WMNF he is leaning toward voting against Amendment 5. â€œIf I had to vote for it today, Iâ€™d probably oppose it.â€
Photo by SeÃ¡n Kinane/WMNF