The Florida Unemployment Compensation Trust Fund’s recovery surpasses pre-pandemic levels ahead of schedule, enabling an early reduction of the state’s business rent tax and saving taxpayers $1 billion.
Florida’s Unemployment Compensation Trust Fund balance, drained during the COVID-19 pandemic, is expected to exceed its prepandemic level by March, two months earlier than expected, according to the nonprofit group Florida TaxWatch.
That will allow a decrease in state sales tax businesses must pay on payments made to rent or lease of commercial property. The 4.5 percent business rent tax will be lowered to 2 percent in June instead of August, according to the Florida Department of Revenue.
Florida TaxWatch said that translates into a $1 billion savings for taxpayers.
The cuts are the result of Senate Bill 50 from the 2021 session, according to TaxWatch. The bill required companies without a physical presence in the state to collect sales tax on products delivered to Florida customers. Those extra dollars replenished the unemployment trust fund, preventing a significant tax increase to employers, TaxWatch said.
The bill also established a mechanism for lowering the Business Rent Tax, which is imposed on property rentals such as office or retail space, warehouses, convention and meeting rooms, self-storage units or mini-warehouses to 2 percent once the trust fund balance reached $4.07 billion.
A new report from the Office of Economic and Demographic Research projects that the trust fund will reach the $4.07 billion threshold in March, two months earlier than projected.
“As we celebrate this significant win, let’s remember that our journey doesn’t stop here,” TaxWatch said in a release. “TaxWatch remains committed to working toward the total repeal of the Business Rent Tax, further enhancing Florida’s attractiveness for business and investment. Let’s continue to make Florida a thriving hub for businesses and communities “
Florida TaxWatch has described the business rental tax as “onerous,” and the only statewide tax of its kind in the nation.
“The BRT puts Florida at a significant economic disadvantage,” the group said in 2017. “Not only does it increase costs for Florida businesses but it prevents them from hiring additional people and expanding to new locations in the state. Additionally, businesses from outside the state could be discouraged from relocating to Florida because of the BRT.”