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The Florida Legislature met
in special session for three days in June to pass a two-pronged
property tax reform plan. One part includes an immediate
reduction in tax rates that will affect residential and
commercial property equally.
The second part of the plan
will go before voters next year. The centerpiece is a super
property-tax exemption that would apply only to primary
residences. The package also includes a personal property tax
exemption for businesses.
TAXES HELD AT 2006 LEVELS
Under the new legislation, property tax revenues for
local governments will remain at the same levels in the next
fiscal year as they were for the current fiscal year. Cities,
counties and other local governments will cut their property tax
collections by $15.6 billion statewide. This will be reflected
in the November tax bills.
In future years, increases
in property tax collections will be capped at the rate of
personal-income growth, which has averaged 4.2 percent annually
during the past 20 years.
If property values go up
higher than that, a city or county would have to reduce its
millage proportionally or vote to raise taxes. A loophole exists
that allows Miami-Dade, Broward and Duval counties to override
the millage rollback with a three-fourths vote of the governing
body.
TAX EXEMPTIONS UP FOR A VOTE
The second prong of the property tax reform package
is a proposed amendment to the state constitution. Voters will
decide whether to keep their current tax caps or switch to a
super exemption worth up to $195,000 for a $500,000 home.
The proposal exempts 75% of
a home’s value up to $200,000 and 15% of the next $300,000. To
make up for lost tax revenue, this change could conceivably
bring assessment increases in the future that are greater than
the current 3 percent annual limitation.
If the constitutional
amendment passes, businesses would get a $25,000 tangible
personal property tax exemption. The exemption would apply to
computers, telephones and basic office equipment.
“This tax on non-fixed
assets often costs businesses more to calculate than is owed,”
Bill Herrle, executive director of the National Federation of
Independent Business said in a release.
The constitutional
amendment will be on the January 29 ballot when the presidential
primaries are held. If approved by 60% of the voters, it will
take effect with the November 2008 tax bills. |
