Plus, a great ranking for start-ups
2024 looks to be a great year for Florida business. There’s a major reduction in the Business Rent Tax happening sooner than expected and its new ranking at #3 in the best states to start a business. Plus, further proof that Florida’s retirees help ease tax burdens on the rest of us. It’s all in this week’s look at Florida economic news.
Major Reduction in Business Tax: Florida’s latest forecast shows the Unemployment Compensation Trust Fund (UCTF) balance should exceed pre-Covid levels a full two months earlier than expected – which means a lower Business Rent Tax (BRT) effective June 2024. Currently the tax rate sits at 4.5%, but will drop to 2% with this new update, saving taxpayers $1 billion annually. These cuts come as a result of Senate Bill 50 in the 2021 session, which required companies without a physical presence in the state to still collect sales tax on products delivered to Florida customers, replenishing the UCTF, which was drained by pandemic claim expenses. The statewide BRT is the only one of its kind in the nation, putting strain on many Florida business owners. The lower rates will positively impact those renting business space, including in office buildings and warehouses.
One of the Best Places for New Business: Florida placed 3rd in the best states to open a new business in the upcoming year, according to data from the US Bureau of Labor Statistics. With a GDP growth rate of 4%, Florida has one of the most booming economies in the nation. Its working-age population (ages 16-64) is also growing much faster than other states. Generally, new start-ups fail within 5 years, but Florida even ranked 4th in the average growth of small businesses category, with more start-ups than most other states, reinforcing its status as a robust and ever-growing economy. Only Utah and Georgia ranked over Florida in the results, forecasting further investment and development all through 2024.
The New Impact of Retirees: A new study by the University of Florida presents estimates of the net benefit of an average retiree in Florida to our state and local budgets. Although retirees contribute essentially the same per capita revenue to state and local governments in Florida as other adults (roughly $33 more per person, before adjusting revenues to equal expenditures), their per capita expenses are significantly lower. Retirees have slightly less income than the average adult Florida resident and spend a slightly smaller portion of that income on taxable goods, but balance this out with more valuable homes. In terms of government revenue, this causes Florida’s retiree population to contribute less to sales and gross receipt tax revenue, more to property tax revenue, and slightly less to all other revenue sources. However, retirees rarely have children in the home and therefore cause little burden to the education budget, they rarely become incarcerated, and they tend to travel on the roads at less congested times. Although they do require more medical services than the average Florida resident, this is more than offset by their using other services less.
LMA Newsletter of 1-22-24
