For more than two years now, Senate Democrats have made tax fairness a driving priority of the 14-member Caucus. By closing certain loopholes tailored for the state’s elite, the Democrats argued, programs could be preserved and devastating budget cuts could be prevented.
Last week, that message won broad bipartisan support with the unanimous passage of Senate Bill 2430, a measure sponsored by Senate Democratic Leader Al Lawson (D-Tallahassee) and Sen. Dan Gelber (D-Miami). By closing the real estate transfer tax loophole, a documentary stamp evasion tactic tapped by deep pocketed special interests, money will now be available to help continue “Florida Forever,” the popular state land preservation program.
“Florida Forever had itself become an endangered species,” said Lawson, who with the co-sponsorship of Sen. Carey Baker (R-Eustis), tacked on the Florida Forever amendment to the loophole closure bill. “By asking everyone to pay their fair share, especially those who have long evaded that responsibility, we were able to rescue a program critical to our state and generations to come,” he added.
Under SB 2430, a loophole created by the state Supreme Court in the “Crescent” opinion will now close. The tactic was predominantly used by corporations such as high end developers to evade paying the doc stamps Floridians typically must pay when buying and selling real estate.
For example, two years ago, three South Florida prime commercial properties reportedly sold for $600 million but paid the state only $2.10 in doc stamps. That’s because the loophole allowed the transactions to be recorded at only $10 each, costing the state $4.2 million in doc stamps.
While the legislation passed last Friday will continue to allow certain exceptions to doc stamp levies, such as transfers used for estate planning, closing the Crescent loophole on real estate transfers to artificial entities is expected to net Florida an estimated $50 million to $400 million annually.
By closing the loophole, approximately $10 million of the new funds will now go to generate $100 million in bond money to fund Florida Forever. Until now, the program had been targeted for suspension due to Florida’s crippling budget crisis.
Last week, that message won broad bipartisan support with the unanimous passage of Senate Bill 2430, a measure sponsored by Senate Democratic Leader Al Lawson (D-Tallahassee) and Sen. Dan Gelber (D-Miami). By closing the real estate transfer tax loophole, a documentary stamp evasion tactic tapped by deep pocketed special interests, money will now be available to help continue “Florida Forever,” the popular state land preservation program.
“Florida Forever had itself become an endangered species,” said Lawson, who with the co-sponsorship of Sen. Carey Baker (R-Eustis), tacked on the Florida Forever amendment to the loophole closure bill. “By asking everyone to pay their fair share, especially those who have long evaded that responsibility, we were able to rescue a program critical to our state and generations to come,” he added.
Under SB 2430, a loophole created by the state Supreme Court in the “Crescent” opinion will now close. The tactic was predominantly used by corporations such as high end developers to evade paying the doc stamps Floridians typically must pay when buying and selling real estate.
For example, two years ago, three South Florida prime commercial properties reportedly sold for $600 million but paid the state only $2.10 in doc stamps. That’s because the loophole allowed the transactions to be recorded at only $10 each, costing the state $4.2 million in doc stamps.
While the legislation passed last Friday will continue to allow certain exceptions to doc stamp levies, such as transfers used for estate planning, closing the Crescent loophole on real estate transfers to artificial entities is expected to net Florida an estimated $50 million to $400 million annually.
By closing the loophole, approximately $10 million of the new funds will now go to generate $100 million in bond money to fund Florida Forever. Until now, the program had been targeted for suspension due to Florida’s crippling budget crisis.
Go Al. Thanks
ReplyDeleteUmmm why should the state get $4 million dollars just because somebody sold some land?
ReplyDeleteWhy not? It will be the state who will provide infrastructure support for properties. It will be the state that will provide services needed in the initial phases of development, or provide environmental services for development. Why the willingness to place ALL of the tax burden on state taxpayers while these wealthy developers pay next to nothing? Why the willingness to question the closing of a loophole?
ReplyDelete