9 Actions Florida Should Take to Help Taxpayers Impacted by Hurricane Ian

1.     Postpone tax notices and waive penalties or interest for late tax filings in affected areas

2.     Extend the date for residents to take advantage of the tax discounts they would normally receive for paying property taxes and special assessments in November and postpone or defer the deadline for property tax installment payments

3.     Protect individual and business taxpayers from the risks for notices that they will likely not receive because their home or business addresses is not accessible anymore

4.     Issue no new audits in severely impacted areas, extend the statute of limitations and postpone existing audits that haven’t reached the assessment stage because these can’t be responded to while entire communities are still recovering

5.     Create procedures for fairly estimating taxes which can’t be calculated because records have been destroyed by the storm, moving away from the current method which significantly overestimates activity if no records are available

6.     Initiate procedures to offer payment plan assistance for late taxes, rather than resorting to the standard collection methods, like liens, levies, or bank freezes

7.     Retroactively apply the recently passed law that provides property tax refunds for residential property rendered uninhabitable as a result of a catastrophic event

8.     Provide tangible personal property relief and allow n on-residential properties rendered uninhabitable to receive property tax refunds

9.     Get Congress to pass a Disaster Tax Relief Act that includes provisions from past packages, including elements such as an Employee Retention Credit, an enhanced casualty loss deduction, and other relief provisions

Download the Recommendations

Other Resources

Florida Disaster.biz
FEMA
Florida Department of Financial Services
Florida SBDC
Disaster Contractors Network
Florida Disaster Fund

Florida TaxWatch Statement on Hurricane Ian Recovery

Community Involvement

/ Categories: Blog

BAT Could be BAD if Applied to Reinsurance

Since his presidency began, President Donald Trump has been adamant about implementing a border-adjustment tax (BAT) to improve domestic manufacturing. The idea has gained steam in the House as well. Originally introduced under Speaker Paul Ryan (R-Wisconsin) and Kevin Brady (R-Texas), the proposal would lower the corporate income tax rate to twenty percent and convert it into a destination-based cash-flow tax, making the corporate income tax border-adjustable.

What exactly does border-adjustable mean? Essentially, U.S. based business will no longer be able to deduct goods purchased from foreign countries (imports) from their tax bill but they will no longer be subject to taxation on sales revenue earned abroad (exports).

This poses a potential problem for Florida. The House plan is unclear about whether or not this proposal would apply to financial transactions. If it does, Florida could be severely hampered.

This is because Florida relies heavily on reinsurance. Since hurricanes are a constant threat to the Sunshine State, insurers cede their risk to reinsurance companies to mitigate their losses in the case of a catastrophic event, with the cost of reinsurance being passed down to the policyholders. U.S.-based insurers often cede their risk with foreign reinsurance companies, spreading out this risk and lowering costs.

If the border adjustment is applied to financial transactions, it would amount to a twenty percent tax increase on the reinsurance premiums ceded by U.S. insurers to foreign reinsurance companies. Florida TaxWatch research finds that this increase would increase the cost of property insurance for Florida homeowners by up to $430 a year per policyholder.

The effects on the economy are even more staggering. The direct cost of a border adjustment on reinsurance would result in a reduction in economic activity by up to $5.0 billion, worker earnings falling by as much as $2.6 billion, and up to 77,402 jobs lost.

Obviously, to Florida’s Congressional Delegation, these numbers are eye-opening. No elected official wants to come back to their constituents and hear that their decision to include reinsurance in the BAT raised homeowner premiums and cost people their jobs and livelihood.

Florida’s Congressional Delegation must be the voice of reason in this debate. Explaining the potential impact of the BAT on reinsurance to Congress is critical to ensuring that it is not included in the final product.

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