Gray Rohrer
A trio of House bills aimed at cutting taxes in targeted industries could progress this Session after state economists issued official estimates Friday regarding their effect on state and local revenues.
Craft brewers would get a break from paying a $3,000 license fee — and be able to pay a $500 license fee instead — under HB 1451. But the real savings for the industry — and cost to the state — would come in the recalculation of the excise tax on beer.
Malt beverages are hit with an excise tax of 48 cents per gallon and 6 cents per pint under current law. But because most beer bottles and cans are 12 ounces, rather than the 16 ounces in a pint, the tax is rounded up when the sale is made. The bill would make the excise tax 0.375 cents per ounce to even out the difference, saving brewers $58 million next fiscal year. The change in the license fee would save brewers and cost the state $900,000 a year, according to the estimates adopted Friday.
HB 1451 was scheduled for a vote in the House Regulatory Reform Subcommittee last week, but was postponed. It could get a vote at the committee’s next meeting.
The bill also allows brewpubs to sell beer at any venue owned by the same owner of the brewpub, a change from current law that restricts the sale of beer by a manufacturer to one brewpub. That limit is itself an exception to Florida’s “three-tiered system” of prohibiting manufacturers, distributors and retailers from owning each other.
Another bill (HB 1163) would add machinery and equipment used to burn hydrogen to an existing sales tax exemption for equipment used to burn boiler fuels to produce energy for sale. Equipment used to produce “green hydrogen,” or hydrogen produced using only renewable energy sources, would also be exempt under the bill.
But Florida economists struggled to affix an estimate to the bill, since analysts with the Department of Revenue said the equipment already was exempt under current law.
“As near as we can tell this looks like it’s adding surety and guarantees that under some future administration or some future interpretation that what we think is covered today would not be excluded by being hydrogen manufacturing or using hydrogen,” said Matthew Moore, DOR chief economist. “It’s primarily duplicative and we don’t really see anything that’s getting excluded for these reasons today.”
Still, economists adopted an estimate of $200,000 in lost revenue if the bill were to pass, since one company — Florida Power & Light — already is building a green hydrogen plant. But the bill hasn’t been scheduled for a hearing in the House yet.
The $65 million plant was announced in 2020 and is already under construction.
A third bill (HB 751) would add heavy equipment rented for construction to an exemption on the tax on tangible personal property. The bill would cost local governments $20.1 million next fiscal year, economists forecast.
The bill is up for a vote in the House Appropriations Committee Monday afternoon. If it passes, it will be cleared for a floor vote in that chamber.
The bill, however, likely requires a two-thirds majority to pass in each chamber of the Legislature. The House staff analysis on the bill notes that Art. VII, Sect. 18(b) requires bills that reduce the authority of local governments to raise revenues to receive a two-thirds vote.
None of the three bills has a Senate companion bill. That’s usually not a good sign a bill will pass, but tax cut bills often get thrown into one large tax cut “package” at the end of the Session when the budget is being negotiated between the chambers.
