Salary Tax Credit Repeal Breezes Through Senate, Goes to House
SB 1832 relating to repealing the insurance industry’s salary tax credit against the premium tax came up today in the Senate and passed 39-0. The bill’s sponsor, Senator Negron, discussed the rationale for the amendment, which essentially is to return the money to the citizens of Florida in the form of lower vehicle registration fees and not continue to subsidize the insurance industry.
Senator Gibson proposed an amendment to study the issue instead of proceeding with the repeal because the credit seemingly has been successful in helping attract jobs to Florida. However, Senator Negron responded that the legislature has studied the issue during the committee process, and the amendment was defeated soundly on a voice vote.
Several senators spoke in favor of the bill. The comments generally emphasized the Senate’s willingness to revisit existing programs and end those for which the original purpose has expired. Other senators spoke about the benefits of putting money back in the hands of Floridians, and being able to do so in a way they don’t believe will have an adverse impact on the insurance industry’s hiring decisions.
The money being put back in the hands of Floridians is a $12 reduction in motor vehicle registration fees. Meanwhile, the effective increase in insurers’ taxes will be part of their expenses, which comprise a component of their rates. This ultimately falls in the “no such thing as a free lunch” category, and if the measure ultimately becomes law Floridians will see the reduction in the motor vehicle tag fees but won’t be specifically aware of how the effective tax increase affects their insurance rates.