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1 Scott W. Drenkard, Tangible Personal Property Tax Reform: Options to Foster Simplicity and Competitiveness in Florida's Tax Code 1 (2012)

handle is hein.taxfoundation/taxfaanf0001 and id is 1 raw text is: Tangible Personal Property Tax Reform:
Options to Foster Simplicity and Competitiveness
in Florida's Tax Code
Scott W. Drenkard
Economist, Tax Foundation
Hearing of the Finance and Tax Committee of the
Florida House of Representatives
February 1, 2012
Mr. Chairman and Members of the Finance and Tax Committee of the Florida House of
Representatives:
I write with regards to HJR 1003, the proposed constitutional amendment, and HB 1005,
the implementing bill (to provide tax relief for businesses paying the tangible personal
property tax). I appreciate the opportunity to submit this testimony in providing some of the
broader perspective on tangible personal property taxation.
For those unfamiliar with the Tax Foundation, we are a non-partisan, non-profit
organization that has monitored fiscal policy at all levels of government since 1937. We have
produced the Facts &r Figures handbook since 1941, calculate Tax Freedom Day each year,
and have a wealth of facts, rankings, and other information at our website,
www.TaxFoundation.org.
Personal property taxes are waning in popularity as a tax collection mechanism. In the past
12 years, eight states have made changes to remove or decrease the impact of tangible
personal property (TPP) taxation, whether through raising the exemption or removing
particularly distortionary TPP taxes on inventory. Notably, in 2008, Washington, D.C.
raised its exemption to $225,000; and in 2009, Ohio began a phase-out of TPP taxation.
Fourteen states already substantially exempt tangible personal property from taxes. However,
these states are primarily clustered in the Northeast and Midwest. If Florida were to remove
its tangible personal property tax, it would gain notice as the only state within 600 miles to
not have one.

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