Advertisers oppose tax-swap amendment
Today the Tampa Bay Advertising Federation held a luncheon meeting to discuss the tax-swap amendment that will be on Novemberâs 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. Itâs 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).
âI think itâs one of the biggest tax increases that weâre 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.
âWe 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."
Floridaâs 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 âcreate an atmosphere of fear and doubtâ about Amendment 5 so that people will be inclined to vote âno.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. âItâs 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 itâs too early to tell. The scariest part of this is that theyâre 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. âIf I had to vote for it today, Iâd probably oppose it.â
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