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Florida state senator seeks to lower commercial real estate tax

Even though finding the capital to start a business in the United States can be challenging, fledgling businesses and companies that want to relocate to Miami, Florida, have an extra hurdle to cross. According to Building Owners and Managers Association International, a 6 percent tax is levied on commercial real estate leases in the state – an amount that may significantly raise the operating costs of a company.

No other state imposes this tax, and the fact that online sales from other states typically do not have the same burden can make it difficult for retailers in Florida to compete. Many claim this has prevented many of them from taking advantage of the benefits of the nation’s recovery after the recession.

The Pensacola News Journal reports that state Sen. Dorothy Hukill has introduced a bill that would reduce the real estate tax to 5 percent as a first step toward gradually eliminating the charges altogether. Many local business owners and commercial real estate owners believe this amount is not enough to make a difference in the short term, and that the marginally lower percentage will still prevent companies from opening their doors in the state.

Because the tax cuts would cost Florida some significant revenue, there is some opposition to the proposal in the state’s government. The previous unsuccessful efforts to pass legislation failed in part due to other tax cuts that made the loss of this tax revenue hard to defend. The lack of a state income tax is another hurdle to phasing out the $1.2 billion in funds. Still, with a projected budget surplus, Hukill feels more confident for the bill’s success during the 2016 session.

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