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TALLAHASSEE, Fla. (AP) â¿¿ Florida businesses may get a last-minute break on their taxes.
With a little less than two weeks left in the session, the Republican-controlled Legislature is moving ahead with a plan that would scale back a massive tax increase due this year from nearly 460,000 businesses.
It wouldn't eliminate the tax hike entirely, but it would likely make it smaller than anticipated.
A Senate panel on Tuesday approved a measure (SB 1416) that would spread the tax hike over several years and make other changes designed to bring down the size of the increase.
The change means that the minimum tax rate this year would jump from $72.10 per employee to $121. The initial hike would have increased the tax to nearly $172 per employee. The legislation would also cap the maximum amount per employee at $432 instead of $459.
"It's a relief to the small business community so they are not going to be hit too badly," said Sen. Ellyn Bogdanoff, R-Fort Lauderdale and sponsor of the legislation.
Businesses pay unemployment taxes that are used to provide benefits to those who are out of work. But the problem is that the trust fund used to pay those benefits has been drained due to the state's high unemployment rate. The rate is now 9.9 percent.
Since 2009, the state has been forced to borrow $2.4 billion from the federal government to keep the trust fund solvent. The state â¿¿ which manages the trust fund outside of the regular state budget â¿¿ has paid part of the money back. But now it's paying interest on the unpaid balance, which is passed on to employers through a once-a-year assessment.
State legislators initially voted to increase the taxes in order to replenish the fund, but have delayed the tax hikes in hopes the economy would recover.