Vehicle Registration Fee Rollback Resurfaces
Senate Appropriations Chairman Joe Negron has filed a proposal (SB 156) that would reduce Florida’s motor vehicle registration fees. The proposal as initially filed does not affect the salary tax credit that applies to Florida’s insurance premium tax. This is a key distinction between the 2014 proposal and the proposal as considered in the 2013 legislative session. In the 2013 session, some lawmakers sought to fund the registration fee decrease by eliminating the salary tax credit for insurers. The proposal became controversial in an era in which Florida is competing vigorously to add jobs. Insurers demonstrated that the salary tax credit has led to job creation in this state, and in fact the salary tax credit is unique in sense that it applies only when jobs actually are created– there’s no “up front” cost to the state. Controversy over the salary tax credit doomed not only the vehicle registration fee rollback but also the broader bill to which it was attached, which contained many non-controversial and beneficial insurance reforms.
Forecasters are predicting that that Florida will have increased revenues leading into the 2014 session. This could enable the legislature to roll back the registration fees without bogging down the proposal over the salary tax credit. Nonetheless, because the issues were linked last year, insurers will watch the 2014 proposal closely.