REVENUE ESTIMATING CONFERENCE

Transcription

1 Tax: Communication Services Tax Issue: Tax Rate Reduction Bill Number(s): HB 33A Senate Amendment REVENUE ESTIMATING CONFERENCE Entire Bill X Partial Bill: Sponsor(s): Sen. Hukill Month/Year Impact Begins: September 1, 2015 Date of Analysis: June 11, 2015 Section 1: Narrative a. Current Law: Section , F.S. states that the Total Direct-to-Home (DTH) Satellite Communication Services Tax is set to 10.8%. The non-satellite CST is set to 6.65%. Section (1) describes how the taxes imposed on non-satellite CST under (1)(a) are to be distributed. The portion which constitutes gross receipts taxes shall be deposited as provided by law and in accordance with s. 9, Art. XII of the State Constitution. The remaining portion shall be distributed according to s (6). Section (2) describes how the taxes imposed on direct to home satellite service under (1)(b) are to be divided. The portion that constitutes gross receipts tax shall be removed and deposited the same as the rest of Gross Receipts Tax on Communications Services. Under s (2)(b), the rest of the tax will be divided with 63% distributing via Section (6). The remaining 37% is further broken down with 70% allocated via Sections and , and 30% allocated via Section Section (6)(d), F.S. describes the distribution of proceeds remitted pursuant under chapter 212 and ss (1)(b) and (2)(b) and (1)(a)3. Subparagraph 2 states, after the distribution under subparagraph 1., % of the amount remitted by a sales tax dealer within a county participating pursuant to s to be transferred into the Local Government Half-cent Sales Tax Clearing Trust Fund,. Subparagraph 3 allocates % to be transferred to the Local Government Half-cent Sales Tax Clearing Trust Fund and distributed pursuant to s , after distribution under subparagraph 1 and 2. Subparagraph 4 states, after the distributions under subparagraphs 1., 2., and 3., % of the available proceeds shall be transferred monthly to the Revenue Sharing Trust Fund for Counties pursuant to s Subparagraph 5 states, after the distributions under subparagraphs 1., 2., and 3., % of the available proceeds shall be transferred monthly to the Revenue Sharing Trust Fund for Municipalities pursuant to s b. Proposed Change: Proposed language decreases the rate of Direct to Home (DTH) Satellite Communication Services Tax to 9.07%, and nonsatellite CST to 4.92% as of July 1, The proposed language changes the percent of the tax imposed on direct to homes satellite service that is distributed via section (6) from 63% to 55.9% as of September 1, Furthermore, the proposed language amends s (6)(d). Subparagraph 2 is amended to allocate % of the amount remitted by a sales tax dealer within a county participating pursuant to s to be transferred into the Local Government Half-cent Sales Tax Clearing Trust Fund as September 1, 2015,. Subparagraph 3 is amended to allocate % of the available proceeds to the Local Government Half-cent Sales Tax Clearing Trust Fund and distributed pursuant to s Emergency Distribution as of September 1, Subparagraph 4 is amended to allocate % of the available proceeds monthly to the Revenue Sharing Trust Fund for Counties pursuant to s as of September 1, Subparagraph 5 is amended to allocate % of the available proceeds monthly to the Revenue Sharing Trust Fund for Municipalities pursuant to s as of September 1, Section 2: Description of Data and Sources Revenue Estimating Conference Gross Receipts Tax and Communications Services Tax (March 2015) General Revenue Workpapers (March 2015) Section 3: Methodology (Include Assumptions and Attach Details) The impact of the rate change for the non satellite CST providers is presented as an impact to State Sales Tax Transfer from CST. The impact to direct to home satellite is presented in two parts because of the way the direct to home satellite remittances are divided. First, the total change from the current DTH rate to the proposed one is shown. Second, the impact is shown in its component parts comparing the current provisions of section , F.S. to the changes made by this bill. Next, the impact of the impact on the distributions under (6)(d) is estimated using the estimated Sales Tax Collections from REC March First the estimated collections from transfers from CST were subtracted from the total sales tax 133

2 Tax: Communication Services Tax Issue: Tax Rate Reduction Bill Number(s): HB 33A Senate Amendment REVENUE ESTIMATING CONFERENCE collections in order to present the impact from the CST rate reduction and distribution changes separately from the impact of the distribution changes on all other collections. Using the current breakdown the distributions from both CST at the current rate and other collections are calculated separately. To estimate the distributions from CST, the collections that were estimated from non-satellite CST at t the new tax rate and the appropriate percent of the collections estimated for DTH satellite at the new rate were totaled to find the estimated collections from CST that would be distributed under (6)(d). The proposed distribution percentages were used to estimate the distributions to the various local revenue sharing programs. The distributions from Non-CST collections were calculated separately using the proposed distribution percentages. The estimates were then summed to find the estimated total distributions under the new breakdown and new rates on CST and the difference was taken from the estimated current distributions to find the impact. The effective date is upon becoming law and will apply to taxable transactions included on bills for services dated on or after July 1, The cash values are as follows: /12 th of the recurring impact Section 4: Proposed Fiscal Impact State Sales Tax Transfer from CST High Middle Low (184.4 M) (201.6 M) (204.2 M) (204.2 M) (203.2 M) (203.2 M) (203.6 M) (203.6 M) (204.4 M) (204.4 M) Direct-to-Home Satellite High Middle Low (22.5 M) (24.5 M) (24.9 M) (24.9 M) (25.4 M) (25.4 M) (25.8 M) (25.8 M) (26.2 M) (26.2 M) Total High Middle Low (207.3 M) (226.1 M) (229.2 M) (229.2 M) (228.6 M) (228.6 M) (229.4 M) (229.4 M) (230.7 M) (230.7 M) List of affected Trust Funds: Sales and Use Tax Group, CST Group Section 5: Consensus Estimate (Adopted: 06/12/2015): The Conference adopted the proposed estimate. GR Trust Local/Other Total Cash Recurring (207.3) (226.1) (207.3) (226.1) (230.2) (230.2) (229.1) (229.1) (231.1) (231.1) (228.5) (228.5) (233.1) (233.1) (229.4) (229.4) (235.5) (235.5) (230.6) (230.6) 134

3 CST Tax Rate Reduction 0f 1.73% A B C D E F G Component breakdown Current Rates Direct-to-Home (DTH) Satellite 10.80% year Additional State Tax on DTH Satellite Implied Base for Additional State Tax on DTH Satellite (B9/4%) DTH component of State Sales Tax Transfer from CST (C9*6.8%) Total DTH Satellite Equal to tax at 10.8% rate , , , , , State Sales Tax Transfer from CST 6.65% year State Sales Tax Transfer from CST Total (M) Less DTH component Non-satellite Component of State Sales Tax Tansfer from CST Base (B19/6.65%) , , , , ,817.6 June 12 Impact Conference 135

4 CST Tax Rate Reduction 0f 1.73% A B C D E F G New rates DTH Satellite 9.07% year Implied Base for Additional State Tax on DTH Satellite (B8/4%) Tax at new rate (B32*C28) Change from Current Tax (C32- E9) , (24.5) , (24.9) , (25.4) , (25.8) , (26.2) State Sales Tax Transfer from CST 4.92% year Non-satellite Component of State Sales Tax Tansfer from CST Base (B19/6.65%) Tax at new rate (B42*C38) Change from Current Tax (C42- B19) Total Change (D42+D32) , (201.6) (226.1) , (204.2) (229.2) , (203.2) (228.6) , (203.6) (229.4) , (204.4) (230.7) Satellite Distribution 55.9% year Total Collections at New DTH Rate (2) via (6) [(B19*C16)] (2)(c) [(B19-C19)*0.7] (2)(c) Fiscally Contrained) [(B19- C19)*0.3] Net Change in Distributions year Total collections (2) via (6) (2)(c) (2)(c) (Fiscally Contrained) (23.96) (24.01) (24.50) (24.56) (24.94) (24.99) (25.41) (25.47) (25.81) (25.87) (26.25) (26.31) June 12 Impact Conference 136

5 CST Tax Rate Reduction 0f 1.73% Sales Tax Distributions year A B C D E F G Total State Sales Tax Collections Local Gov. half cent (6)(d)2. Local Gov. half cent emergency distribution (6)(d)3. County Revenue Sharing (6)(d)3. Muncipal Revenue Sharing (6)(d) (226.1) (226.1) (229.1) (230.2) (228.6) (231.1) (229.4) (233.1) (230.6) (235.5) Satellite Percentage split to Sales Tax 55.9% Half Cent Distribution Percentage % Emergency Distribution Percentage % County Revenue Sharing Percentage % Municipal Revenue Sharing Percentage % Discrepency (0.0) GR Impact June 12 Impact Conference 137

6 CST Tax Rate Reduction 0f 1.73% 12 3 A B C D E F G H Impacts to Distributions due to reduction of DTH Tax Rate Current breakdown year Total Collections at 10.8% (2) via (6) (63%) (2)(c) (25.9%) (2)(c) (11.1% Fiscally Contrained) Total Distribution to Locals year Total Collections at New DTH Rate New Rate Breakdown 55.9% (2) via (6) [(B19*C16)] (2)(c) [(B19-C19)*0.7] (2)(c) Fiscally Contrained) [(B19-C19)*0.3] Net Change in Distributions year Total collections (2) via (6) (2)(c) (2)(c) (Fiscally Contrained) (24.5) (24.56) Cash (16.3) (16.37) (24.9) (24.99) (25.4) (25.47) (25.8) (25.87) (26.2) (26.31) June 12 Impact Conference 138

7 CST Tax Rate Reduction 0f 1.73% A B C D E F G H Impacts to Distributions due to reduction of CST Tax Rate and Distribution year Total State Sales Tax Collections CST Portion Current Rate and Breakdown After 5.2% distributed to General Revenue (6)(d) % % % % Local Gov. half cent emergency County Revenue distribution Sharing (6)(d) (6)(d)3. Local Gov. half cent (6)(d)2. Muncipal Revenue Sharing (6)(d) , , , , , , , , , , , , , , , Transfers from CST Current Rate and Breakdown % % % % year CST State 6.65% After 5.2% distributed to General Revenue (6)(d)1. Local Gov. half cent (6)(d)2. Local Gov. half cent emergency distribution (6)(d)3. County Revenue Sharing (6)(d)3. Muncipal Revenue Sharing (6)(d) All Other Collections Current Breakdown % % % % year Total Tax Collections - Transfers from CST After 5.2% distributed to General Revenue (6)(d)1. Local Gov. half cent (6)(d)2. Local Gov. half cent emergency distribution (6)(d)3. County Revenue Sharing (6)(d)3. Muncipal Revenue Sharing (6)(d)4. in-state out-ofstate factor , , , % , , , % , , , % , , , % , , , % June 12 Impact Conference 139

8 CST Tax Rate Reduction 0f 1.73% A B C D E F G H Check to GR Package Half Cent Emergency County Municipal Sum of Emergency, County and Municipal Difference from GR Package 1, , , , , Rate Calculation Half Cent % 1, Emergency % County % Municipal % June 12 Impact Conference 140

9 CST Tax Rate Reduction 0f 1.73% A B C D E F G H Half Cent Current Law Distribution - CST Numerator Transfer 73.4 Current Law Distribution - Sales Plus Tax 1,846.6 Total Numerator 1,920.0 Denominator New Half Cent Base 22,704.4 Sales less 5.2% Multiplied by In state Portion % 20,782.5 Plus New CST base CST Sales Trasfer Less 5.2% Total Denominator 21, New Half Cent Percentage % Emergency Distribution Numerator Plus Current Law Sales Tax Distribution 19.9 Current Law CST Distribution 0.7 Total Numerator Denominator New Half Cent Base 22, New Half Cent Less Distribution -Sales 1, , Plus New CST base New Half Cent less Distribution -CST Total Denominator 21, New Emergency Distribution Percentage % June 12 Impact Conference 141

10 CST Tax Rate Reduction 0f 1.73% A B C D E F G H 103 County Revenue Sharing Current Law Sales Tax 104 Numerator Distribution Current Law CST Distribution Denominator Numerator Less Plus Less Total Numerator New Emergency Distribution Base - Sales 20, New Emergency Distribution - Sales , New Emergency Distribution Base - CST New Emergency Distribution - CST Total Denominator 21, New Calculated County Revenue Sharing Percentage % Municipal Revenue Sharing Denominator Current Law Sales Tax Distribution Current Law CST Distribution 10.2 Total Numerator Same as County Revenue Sharing 21, New Municipal Revenue Sharing Percentage % June 12 Impact Conference 142

11 CST Tax Rate Reduction 0f 1.73% year A B C D E F G H New CST State and New DTH Sales Tax Transfer at New DTH rate Transfers from CST New Rate and New Breakdown % % % % Local Gov. half cent After 5.2% distrbutied emergency Muncipal Revenue to General Revenue Local Gov. half cent distributionn County Revenue Sharing (6)(d) (6)(d) (6)(d)3. Sharing (6)(d) (6)(d) year Other Collections After 5.2% distrbutied to General Revenue (6)(d)1. New Breakdown of Other Collections % % % % Local Gov. half cent (6)(d)2. Local Gov. half cent emergency distribution (6)(d)3. County Revenue Sharing (6)(d)3. Muncipal Revenue Sharing (6)(d)4. in-state out-ofstate factor , , , % , , , % , , , % , , , % , , , % Net Change in Distributions year Total State Sales Tax Collections Local Gov. half cent (6)(d)2. Local Gov. half cent emergency distribution (6)(d)3. County Revenue Sharing (6)(d)3. Muncipal Revenue Sharing (6)(d) (226.11) (229.14) (228.59) (229.40) (230.65) June 12 Impact Conference 143

12 CST Tax Rate Reduction 0f 1.73% A B C D E F G H 155 Total Impact 156 High Middle Low (207.3 M) (229.2 M) (228.6 M) (229.4 M) (230.7 M) (226.1 M) (229.2 M) (228.6 M) (229.4 M) (230.7 M) State Sales Tax Transfer from CST(M) High Middle Low (184.8 M) (204.2 M) (203.2 M) (203.6 M) (204.4 M) (201.6 M) (204.2 M) (203.2 M) (203.6 M) (204.4 M) Direct-to-Home Satellite at 8.1% High Middle Low (22.5 M) (24.9 M) (25.4 M) (25.8 M) (26.2 M) (24.5 M) (24.9 M) (25.4 M) (25.8 M) (26.2 M) June 12 Impact Conference 144

13 REVENUE ESTIMATING CONFERENCE Tax: Corporate Income Tax / Sales and Use Tax Issue: Community Contribution Tax Credits Bill Number(s): HB 33A Senate Amendment Entire Bill X Partial Bill: Sponsor(s): Senator Hukill / Senator Benacquisto Month/Year Impact Begins: July 1, 2015 Date of Analysis: 6/11/2015 Section 1: Narrative a. Current Law: The credit shall be computed as 50 percent of the persons approved annual community contribution. Set to expire June 30, 2016 and any accrued credit carryover that is unused on that date may be used until the expiration of the 3-year carryover period for such credit. b. Proposed Change: The total amount of tax credits which may be granted for all programs under this paragraph, s , and s is 18.4m in fiscal year , 21.4m in fiscal year , and 21.4 million in fiscal year for projects that provide housing for persons with special needs or homeownership opportunities for low-income households or very-low-income households as those terms are defined in s and 3.5m annually for all other projects. Extends the community contributions tax credits to June 30, Section 2: Description of Data and Sources Section 3: Methodology (Include Assumptions and Attach Details) It is assumed that fiscal year maximum will be reached. Section 4: Proposed Fiscal Impact High Middle Low (24.9m) (24.9m) List of affected Trust Funds: General Revenue, General Sales Grouping Section 5: Consensus Estimate (Adopted: 06/12/2015): The Conference adopted the proposed estimate with a split of 85% going to Sales and Use Tax and 15% going to Corporate Income Tax. GR Trust Revenue Sharing Local Half Cent Cash Recurring (22.5) 0.0 (Insignificant) 0.0 (0.6) 0.0 (1.8) (22.5) 0.0 (Insignificant) 0.0 (0.6) 0.0 (1.8) Local Option Total Local Total (2.4) 0.0 (24.9) (2.4) 0.0 (24.9)

14 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): HB 33A Senate Amendment Entire Bill Partial Bill: Sponsor(s): Sen Hukill/Sen Benacquisto Month/Year Impact Begins: January 2016 Date of Analysis: 6/11/2015 Section 1: Narrative a. Current Law: Currently enterprise zones are going to expire on December 31, 2015 b. Proposed Change: (1) For purposes of this section, the term eligible business means a business that entered into a contract with the Department of Economic Opportunity for an economic development program under ss , , , , , or , Florida Statutes, between January 1, 2012, and July 1, 2015, for a project located in an enterprise zone which was designated pursuant to s , Florida Statutes 2014, as of May 1, (2) An eligible business may apply to the Department of Economic Opportunity for the following incentives, if the contract with the Department of Economic Opportunity is still deemed active by the department and has not expired or terminated: (a) The property tax exemption for a licensed child care facility under s , Florida Statutes (b) The building materials sales tax refund under s (5)(g), Florida Statutes (c) The business equipment sales tax refund under s (5)(h), Florida Statutes (d) The electrical sales tax exemption under s (15), Florida Statutes, (e) The enterprise zone jobs tax credit under s , Florida Statutes (f) The enterprise zone jobs tax credit under s , Florida Statutes (g) The enterprise zone property tax credit under s , Florida Statutes (3) The Department of Economic Opportunity must provide a list of eligible businesses annually to the Department of Revenue. The Department of Economic Opportunity must also provide notice to the Department of Revenue upon the expiration or termination of a contract. (4) From January 1, 2016 to December 31, 2018, the Department of Economic Opportunity is designated to perform all the duties and responsibilities that were performed by the governing body or enterprise zone development agency having jurisdiction over the enterprise zone under ss , (5) (g) and (h), (15), , and , Florida Statutes 2014, including receipt and review of applications, and certifications. (5) The incentives described in subsection (2) are to be treated as if they had not expired on December 31, (6) This section is effective January 1, 2016, and expires on December 31, Section 2: Description of Data and Sources Department of Economic Opportunity (DEO) Enterprise Zone detail reports Property Tax Oversight report on exempt child care facilities Section 3: Methodology (Include Assumptions and Attach Details) This Estimate consists of 6 pieces, one for each type of extended enterprise zone benefit. The basis for much of the analysis comes from detailed reports from the DEO reports on which businesses would be able to apply for the extended benefits. There is a total of 34 eligible businesses. The first section relates to the property tax exemption under s There were 199 facilities exempt in 2013 and The average exempt value per facility for these two periods was 217,552. The high assumes that 20% of businesses will have a childcare facility with the average value from The middle assumes that 10% of businesses will have a childcare facility with the average value from The low assumes that 5% of businesses will have a childcare facility with the average value from For the purposes of the estimate it is also assumed the value of the childcare facilities does not change over time. This exemption ends when the proposed language expires, and should affect the tax rolls for 2016, 2017, and The second section relates to the building material sales tax refund under s (5) (g). It is assumed that all businesses will be able to take advantage of this refund within the forecast period, and that the refunds will be evenly distributed for the affected periods. The requirements for the refund specify that the refund must be applied for within 6 months of the activity for this reason the affected period is 3 years plus 6 months. The high estimate assumes that that the businesses qualify for 10,000 per parcel due to at least 20% of the employees of the business coming from the enterprise zone, and that there are three parcels per business project. The low estimate assumes that that the businesses qualify for 5,000 per parcel due to less than 20% of the employees of 146

15 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): HB 33A Senate Amendment the business coming from the enterprise zone, and that there is one parcel per business project. The middle is the average of the high and the low. The third section relates to the business equipment sales tax refund under s (5) (h). Capital investment for eligible businesses is used to find the total investment of 532,534,810 for all projects. ). It is assumed that all businesses will be able to take advantage of this refund within the forecast period, and that the refunds will be evenly distributed for the affected periods. The requirements for the refund specify that the refund must be applied for within 6 months of the activity for this reason the affected period is 3 years plus 6 months. The high estimate assumes an investment window of 4 years and that 50% of capital investment is in business equipment with values greater than 5,000. The middle estimate assumes an investment window of 6 years and that 40% of capital investment is in business equipment with values greater than 5,000. The low assumes an investment window of 8 years and that 30% of capital investment is in business equipment with values greater than 5,000. The fourth section relates to the electrical sales tax exemption under s (15). The annual enterprise zone report data was used to find the relationship between the electrical sales tax exemption and the rest of the extended benefits. For and the electrical exemption represented and additional 5% on top of the rest of the benefits. The electrical exemption for the estimate is 5% multiplied by the total for the rest of the benefits. The exemption lasts for 5 years, and the value is held constant for and The fifth section consists of the Jobs credit taken against sales and use tax under s , or against corporate income tax under s Detailed data on wages and new employees for the affected business was used as the basis for this estimate. The high assumes that for projects in rural enterprise zones 70% of employees are from the enterprise zone, for projects in Non-Rural enterprise zones 30% of the employees reside in the zone, and that 10% in the welfare transition program from all projects. The middle assumes that for projects in rural enterprise zones 50% of employees reside in the zone, for projects in Non-Rural enterprise zones 20% of the employees reside in the zone, and that 7% in the welfare transition program from all projects.. The low assumes that for projects in rural enterprise zones 19% of employees reside in the zone, for projects in Non-Rural enterprise zones 10% of the employees reside in the zone, and that 4% in the welfare transition program from all projects. For all estimates it is assumed that the welfare transition rate for the credit is 42.5%. It is assumed that 60% of the credits generated are taken against sales tax based on the annual enterprise zone report. The middle is the average of the high and the low. The credit shall be allowed for up to 24 consecutive months. The sixth section consists of the property tax credit under s It is assumed that all businesses will be affected by this credit. It was assumed that 70% of the capital investment amount was real property improvements qualifying for the credit Statewide average millage of mills was multiplied to the assumed real property value to obtain maximum property tax per project. The high assumes 3 parcels per business, and that the business employs at least 20% of their workforce from the enterprise zone. Impact was limited to 50,000 per parcel for the high. The low assumes 1 parcel per business, and that the business employs less than 20% of their workforce from the enterprise zone. Impact was limited to 25,000 per parcel in the low. The middle is the average of the high and the low. This credit is granted from 5 years and will first be taken against returns in The proposed language takes effect on January 1, 2016, and expires on December 31, Section 4: Proposed Fiscal Impact Sales and Use Tax High Middle Low (6.1 M) (3.4M) (1.7 M) (8.8 M) (5.2 M) (2.4 M) (8.5 M) (4.9 M) (2.3 M) (4.6 M) (2.7 M) (1.4 M) (1.1 M) (0.7 M) (0.4 M) Corporate Income tax High Middle Low (1.1 M) (0.7 M) (0.3 M) (2.7 M) (1.6 M) (0.6 M) (4.0 M) (2.7 M) (1.4 M) (2.7 M) (2.0 M) (1.2 M) (1.9 M) (1.4 M) (1.0 M) 147

16 REVENUE ESTIMATING CONFERENCE Tax: Sales and Use/ Corporate/ Ad Valorem Issue: Enterprise Zone Benefits/ 3 year limited extension Bill Number(s): HB 33A Senate Amendment Property Tax High Middle Low Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Insignificant Total High Middle Low (7.1 M) (4.1 M) (2.0 M) (11.5 M) (6.8 M) (3.1 M) (12.5 M) (7.7 M) (3.8 M) (7.3 M) (4.7 M) (2.6 M) (3.0 M) (2.1 M) (1.3 M) List of affected Trust Funds: Sales Tax/Corporate Income tax/ad Valorem Section 5: Consensus Estimate (Adopted: 06/12/2015): The Conference adopted the following non-recurring impacts for the individual incentive pieces of the Enterprise Zone Act: Childcare Facilities: Negative Insignificant for FY through FY Building Materials Sales Tax Refund: (.1m) for FY through FY Business Equipment Sales Tax Refund: (.8m) for FY through FY and (.4m) for FY Electrical Energy Sales Tax Exemption: Negative Insignificant for FY and (.1m) for FY through FY Corporate Income Tax Jobs Credits: FY (.3m), FY (.7m), FY (.6m), FY (.3m), FY (.1m) Sales and Use Tax Jobs Credits: FY (.2m), FY (.4m), FY (.4m), FY (.2m), FY (.1m) Corporate Income Tax Credit for Ad Valorem paid: (.4m) for FYs through GR Trust Local/Other Total Cash Recurring (1.2) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (0.1) (1.9) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (0.1) (2.2) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (0.1) (1.5) 0.0 (Insignificant) 0.0 (Insignificant) 0.0 (Insignificant) (0.8) 0.0 (Insignificant) 0.0 (Insignificant) Local Option Total Local Total (0.1) 0.0 (0.2) 0.0 (1.4) (0.1) 0.0 (0.2) 0.0 (2.1) (0.1) 0.0 (0.2) 0.0 (2.4) (Insignificant) 0.0 (Insignificant) 0.0 (1.5) (Insignificant) 0.0 (0.8)

17 Enterprise Zone Benefits/ 3 Year Limited Extension Summary of DEO Data A B C D E F G New Jobs by year Number of Affected businesses Rural NonRural Total Section Property Tax Exemption for licensed child care facility Millage Rate (School) Millage Rate (Non-School) Millage Rate (total) Licensed Child Care Facility Exemptions Exemption Value Number of Facilities Average Exemption Total Impact - Current Exemption ,513, , , ,071, , ,351 CY to FY ,292, ,552 Percent of affected businesses 20% 10% 5% Number of affected businesses High Middle Low * 1,479, , ,838 School impact 10,997 5,498 2,749 Non-School impact 16,180 8,090 4,045 Total Impact 27,176 13,588 6,794 *Assumes no change in exemption value for forecast period. Possible impact for 2016, 2017, and 2018 property tax rolls. *For the purposes of the totals at the bottom the impacts here are added for fiscal years , , and June 12, 2015 Impact Conference 149

18 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Section (5)(g) building materials sales tax refund High Assumes the business meets the 20% requirement for EZ employees and there are 3 parcels involved in each project Low assumes the business does not meet the 20% requirement and there is only 1 parcel involved in each project Middle is the average of the High and the Low 34 Affected businesses in all estimates Total impact is evenly distributed across periods available for refund (3 years plus 6 months). Number of Businesses Parcels per Business 3 1 Refund/ Parcel 10,000 5,000 High (10K/parcel) Low (5K/parcel) Total 1,020, ,000 per month 24,286 5,667 Monthly value * affected months in each fiscal year Affected months High Middle Low ,714 89, , , , , , , , , , , Section (5)(h) Business Equipment Sales Tax Refund Per DEO research files affected businesses will be investing M High Assumes 50% spent on Business Equipment with price > 5,000 and a 4 year investment period Middle Assumes 40% spent on Business Equipment with price > 5,000 and a 6 year investment period Low Assumes 30% spent on Business equipment with price > 5,000 and an 8 year investment period Total impact is evenly distributed across periods available for refund (3 years plus 6 months). Total investment 532,534,810 Investment periods Years Spending on Business Equipment 50% 40% 30% Spending per Year 66,566,851 35,502,321 19,970,055 Sales tax refunds available per year 3,994,011 2,130,139 1,198,203 High Middle Low ,994,011 2,130,139 1,198, ,994,011 2,130,139 1,198, ,994,011 2,130,139 1,198, ,997,006 1,065, ,102 June 12, 2015 Impact Conference 150

19 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Section (15) Electrical Energy Sales Tax Exemption Electrical Energy exemption is approximately 5% of value of the total of the rest Enterprise zone incentives 5% applied to the total from all other Enterprise Zone incentives Exemption lasts for 5 years Total incentives High Middle Low ,806,818 3,895,823 1,916, ,940,551 7,687,568 3,761, ,934,152 7,321,105 3,639,994 Electricity exemption High Middle Low , ,791 95, , , , , , , , , , , , ,000 June 12, 2015 Impact Conference 151

20 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Section Enterprise Zone Jobs tax credit against Sales and Use Tax and Enterprise Zone Jobs credit against corporate tax High assumes either that in rural enterprise zones at least 20% of employees are from the Enterprise zone or that the employees are participating in the welfare transition program making 8 more than the Minimum Wage Low assumes that less than 20% of employees are from the Enterprise Zone The EZ jobs credit against Sales and Use Tax Represents 60% of the Total EZ job Credits Middle is the Average of the High and the Low Credit shall be allowed for up to 24 consecutive months Summary of DEO Data New Jobs by year Jobs times Average Wage 102 Number of Affected businesses 103 Rural NonRural Total ,662,150 27,678,989 32,341, ,477,806 13,477, ,939,178 16,939,178 Assumed % Employees per year Residing in 107 Zone High Middle Low 108 Rural 109 Urban % 30% 50% 20% 19% 10% 111 Assumed % Employees Welfare to Work High Middle Low 112 Rural 113 Urban 10% 10% 7% 7% 4% 4% 114 Calculated credits generated per year - Rural High Middle Low ,666, ,187, , Calculated credits generated per year NonRural total credits per year CY to Fy High High High 3,667, ,587, ,524, ,334, ,921, ,112, ,524, Middle Middle 2,484, ,209, ,520, ,671, ,881, ,729, ,520, Low Low Low 1,024, , , ,369, ,867, ,125, , ,667, ,627, ,016, ,818, , , ,618, ,496, , , June 12, 2015 Impact Conference 152

21 Enterprise Zone Benefits/ 3 Year Limited Extension Will not be able to first be taken until High (50K/parcel) Low (25K/parcel) A B C D E F G Credit against Sales tax (assumed 60% of total) High Middle Low ,600, ,005, , ,976, ,473, , ,610, ,254, , ,690, ,108, , , , , Credit Against Corporate (assumed 40% of total) High Middle Low ,066, , , ,651, ,649, , ,406, ,502, , ,127, , , , , , Section Enterprise Zone Property Tax Credit High Assumes the business meets the 20% requirement for EZ employees and there are 3 parcels involved in each project Low assumes the business does not meet the 20% requirement and there is only 1 parcel involved in each project Middle is the average of the High and the Low Assumes real property equals 70% of capital investment Uses 2014 Aggregate Millage of For Low uses assumed real property*millage and caps impact at 25,000 Number of Businesses for High Uses assumed real property /3 * millage and caps impact at 50,000 Parcels per Business Affected businesses in all estimates Credit/ Parcel 50,000 25,000 Credit is granted for 5 years Annual credit 1,604, ,000 High Middle Low ,604,680 1,227, , ,604,680 1,227, , ,604,680 1,227, , ,604,680 1,227, ,000 June 12, 2015 Impact Conference 153

22 Enterprise Zone Benefits/ 3 Year Limited Extension A B C D E F G Total Impact 174 High* Middle Low 175 Year (7.1 M) (4.1 M) (2.0 M) (11.5 M) (6.8 M) (3.1 M) (12.5 M) (7.7 M) (3.8 M) (7.3 M) (4.7 M) (2.6 M) (3.0 M) (2.1 M) (1.3 M) Sales Tax Impact 184 High* Middle Low 185 Year (6.1 M) (3.4 M) (1.7 M) (8.8 M) (5.2 M) (2.4 M) (8.5 M) (4.9 M) (2.3 M) (4.6 M) (2.7 M) (1.4 M) (1.1 M) (0.7 M) (0.4 M) 193 Corporate Income Tax Impact 194 High* Middle Low 195 Year (1.1 M) (0.7 M) (0.3 M) (2.7 M) (1.6 M) (0.6 M) (4.0 M) (2.7 M) (1.4 M) (2.7 M) (2.0 M) (1.2 M) (1.9 M) (1.4 M) (1.0 M) June 12, 2015 Impact Conference 154

23 Tax: Sales and Use Tax Issue: School Sales Tax Holiday, 10 days Bill Number(s): HB33A - Senate Amendment REVENUE ESTIMATING CONFERENCE Entire Bill X Partial Bill: Section 28 Sponsor(s): Senators Hukill and Benacquisto Month/Year Impact Begins: The bill is effective July 1, The sales tax holiday will affect August activity and, subsequently, September collections. Date of Analysis: June 11, 2015 Section 1: Narrative a. Current Law: Under current law in Ch. 212, F.S., clothing, school supplies, and computers and related accessories are subject to the 6% Sales and Use Tax. b. Proposed Change: Clothing: The proposed language exempts sales of clothing, wallets, or bags, including handbags, backpacks, fanny packs, and diaper bags, but excluding briefcases, suitcases, and other garment bags from the Sales and Use Tax for a ten-day period beginning on Friday, August 7, and ending on Sunday, August 16, 2015, as long as the sales price of the item does not exceed 100. Clothing is defined as any article of wearing apparel intended to be worn on or about the human body, excluding watches, watchbands, jewelry, umbrellas, and handkerchiefs, and including all footwear except for skis, swim fins, roller blades, and skates. School Supplies: During this same period, sales of school supplies having a sales price of 15 or less per item are exempt from the Sales and Use Tax. School supplies are defined as pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, binders, lunch boxes, construction paper, markers, folders, poster board, composition books, poster paper, scissors, cellophane tape, glue or paste, rulers, computer disks, protractors, compasses, and calculators. Computers: Also exempt during the three-day period is the first 750 of the sales price of personal computers or personal computer-related accessories purchased for noncommercial home or personal use. Exempted items include electronic book readers, laptops, desktops, handhelds, tablets, or tower computers and related accessories including keyboards, mice, personal digital assistants, monitors (not including devices with a television tuner), other peripheral devices, modems, routers, and nonrecreational software. The exemption does not apply to cellular telephones, video game consoles, digital media receivers, or devices that are not primarily designed to process data. Related accessories do not include furniture or systems, devices, software, or peripherals designed or intended primarily for recreational use. The tax exemptions do not apply to sales within a theme park or entertainment complex, within a public lodging establishment, or within an airport. Section 2: Description of Data and Sources Clothing and Shoes expenditures forecast, FEB 2015 National Economic Estimating Conference. Consumer Computer expenditures forecast, FEB 2015 National Economic Estimating Conference. U.S. Population (total and 65+), 3rd Quarter estimates, FEB 2015 National Economic Estimating Conference. Florida Population (total and 65+), 3rd Quarter estimates, FEB 2015 Demographic Estimating Conference. Estimates of Florida public school enrollment, FEB 2015 K-12 Enrollment Estimating Conference. Estimates of Florida private school enrollment, Department of Education Office of K-12 School Choice. Estimates of Florida public and private college/university fall enrollment, Integrated Postsecondary Education Data System (National Center for Education Statistics). Available at Estimates include Florida College System institutions, State Universities, career centers, and private institutions eligible to participate in the FRAG or ABLE tuition assistance programs. Data accessed 2/17/2015. Computer and Internet Use in the United States: 2013, U.S. Census Bureau. Available at Accessed 2/18/2015. Tax collections by kind code, Florida Department of Revenue. Available at Accessed 2/17/2015. Best Time to Buy Things Month by Month, Consumer Reports. Available at Accessed 2/17/

24 Tax: Sales and Use Tax Issue: School Sales Tax Holiday, 10 days Bill Number(s): HB33A - Senate Amendment REVENUE ESTIMATING CONFERENCE Section 2: Description of Data and Sources, continued. Computer and accessories pricing information from Accessed 2/19/2015. E-Reading Rises as Device Ownership Jumps, Pew Research Center. Available at Accessed 2/18/2015. Older Adults and Technology Use, Pew Research Center. Available at Accessed 2/18/2015. Quarterly Retail E-Commerce Sales: 4 th Quarter 2014, U.S. Census Bureau. Available at Accessed 2/19/2015. Section 3: Methodology (Include Assumptions and Attach Details) Clothing/Shoes/Backpacks: Florida expenditures for clothing and shoes are derived from total national expenditures for clothing and shoes using Florida population (adjusted for ages 65+), and adjusted for an assumed percentage of non-taxed mail order items. The total Florida expenditures are converted to a ten-day amount, with assumptions made for the percentage of expenditures that would be under the 100 limit. For backpacks, assumptions are made for the percentage of students who would purchase a backpack, and each backpack is assumed to cost 25. For the three-day holiday impact previously adopted by the REC, the sales tax matrix was used to spread expenditure levels by each day of the holiday period to derive the level of spending for a three-day weekend (=62.4% of the ten-day total). Because the Senate amendment provides for a ten-day holiday, the 62.4% adjustment is not made. School Supplies: For school supplies, an amount of expenditure is assumed per student, by grade level, for ten days, which is multiplied by the estimated number of students enrolled in public or private elementary and secondary schools, Florida Colleges, State Universities, career centers, and private colleges/universities. The estimated expenditure by students is increased by a factor of 25% for business spending. For the three-day holiday impact previously adopted by the REC, the sales tax matrix was used to spread expenditure levels by each day of the holiday period to derive the level of spending for a threeday weekend (=62.4% of the ten-day total). Because the Senate amendment provides for a ten-day holiday, the 62.4% adjustment is not made. Computers: Florida expenditures are derived from total national expenditures for computers and peripherals using Florida population (adjusted for ages 65+), and adjusted for an assumed percentage of non-taxed online order items. The total Florida expenditures are adjusted for the percentage of expenditures assumed to occur during the third quarter of calendar year 2015 (=22%), the percentage of total expenditures assumed to be exempt, and the percentage of quarterly purchases that are expected to occur during the three-day holiday period. The low estimate assumes 25% of third quarter expenditures would be made during the holiday period (same as for the three-day holiday as previously adopted by the REC). The middle estimate increases the percentage to 30% of third quarter expenditures, assuming additional purchases would be made during a ten-day holiday as compared to a three-day holiday. The high estimate assumes 55% of third quarter expenditures. Section 4: Proposed Fiscal Impact: The impact is nonrecurring for FY only Clothing & Shoes School Supplies Computers Total High Middle Low (50.6 M) (7.9 M) (16.8 M) (75.3 M) (47.5 M) (7.2 M) (7.8 M) (62.5 M) (44.3 M) (6.6 M) (6.5 M) (57.4 M) List of affected Trust Funds: Sales and Use Tax Grouping 156

25 Tax: Sales and Use Tax Issue: School Sales Tax Holiday, 10 days Bill Number(s): HB33A - Senate Amendment REVENUE ESTIMATING CONFERENCE Section 5: Consensus Estimate (Adopted:06/01/2015): The Conference adopted the middle impact. GR Trust Revenue Sharing Local Half Cent Cash Recurring (55.4) 0.0 (Insignificant) 0.0 (1.8) 0.0 (5.3) Local Option Total Local Total (5.3) 0.0 (12.4) 0.0 (67.8)

26 Senate Amendment to HB 33A Sales Tax Holiday - Clothing, School Supplies, Personal Computers 10 Days, August 7-16, 2015 (NONRECURRING) Clothing & Shoes or Less School Supplies - 15 or Less Expenditure Type Personal Computers and Related Accessories - First HIGH MIDDLE LOW (50.6) (47.5) (44.3) (7.9) (7.2) (6.6) (16.8) (7.8) (6.5) 4 Total Impact (75.3) (62.5) (57.4) *Estimates in millions of dollars 158