PRESS RELEASE

TALLAHASSEE -- Florida TaxWatch is calling for an end to the state's intangibles tax – calling it "unfair, unwarranted and counterproductive." In a report released today by Florida TaxWatch's Intangibles Tax Task Force, the state's independent taxpayer watchdog organization calls for the permanent phasing out of the tax over a four-year period.

Florida TaxWatch is a non-partison, non-profit research institution supported by homeowners, small businesses, corporations, labor unions, individuals and philanthropic foundations. The Task Force was assembled at the request of legislative leaders and was chaired by David MacIntosh, CEO of Barricade International, Inc. and immediate past chairman of Florida TaxWatch.

"For too long, Florida businesses and employees have been at a competitive disadvantage compared to businesses in other states," Florida TaxWatch President and CEO Dominic Calabro said today. "It's time to get rid of this tax and help our small businesses compete on an equal footing with businesses in other states. Eliminating this tax will send a signal around the world that Florida welcomes jobs and business development."

The intangibles tax is essentially a tax on stocks, bonds, lands and accounts receivables paid by both individuals and businesses. It is paid annually based on the taxpayer's assets on January 1.

"Eliminating this tax is job one for the Florida Senate," said Senator Jim Horne, chair of the Senate Committee on Fiscal Resource. "The tax is outdated and must be eliminated, and the best way to do that is to gradually reduce the rate over four years."

"The Intangibles Tax Task Force has done an excellent job of bringing this issue to the forefront," said Rep. Ken Pruitt, chairman of Fiscal Responsibility Council in the House of Representatives. "This report provides us with concrete recommendations to make Florida more competitive."

Florida is one of only five states in the nation with an intangibles tax, and has the most extensive tax, by far. Since 1996, four states have repealed their intangibles tax, in large part because of the economic disincentives of the tax.

To make Florida a more competitive state, the Task Force also recommends:

Eliminating the requirement that the 250,000 businesses with no intangibles tax liability be required to file. This change will save unnecessary time and paperwork at no cost to the state.

Continuing the phase-in of the exemption on accounts receivable.

OTHER DRAWBACKS OF THE TAX

In addition to the significant barriers to economic development brought about as a result of the intangibles tax, the Task Force identified other problems.

COMPLICATED AND UNFAIR -- Because the tax is complex and difficult to administer and enforce, many avoid paying the tax with little fear of being caught, while others dutifully pay their obligation.

FILLED WITH LEGAL LOOPHOLES – There are many legal strategies to avoid paying the intangibles tax. However, these strategies often are known to, or feasible for, wealthier and more sophisticated taxpayers.

PENALIZES THE ELDERLY AND RETIREES – The intangibles tax includes levies on stocks and bonds, it taxes retirees' life savings, placing an unfair burden on the state's elderly.

NOT SUPPORTED BY THE PUBLIC – Public support for the tax is practically non-existent. Florida TaxWatch solicited public input regarding the tax and the response was unanimously negative.

Also participating in today's press conference was Ramona MacKinnon, owner of MacKinnon Financial Consultants, a Tallahassee-based financial advisor and small business owner.