Tag Archive for: governor desantis

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Anyone who has been shopping recently has noticed it — long expanses of empty shelves, websites with merchandise marked “out of stock.”

Sometimes it’s canned goods in short supply, sometimes paper plates. Earlier this year, popular brands of baby formula became hard to find, sending parents to Facebook groups to chase down supplies. Meanwhile, the price of new and used cars continues to climb, due to shortages of critical parts and computer chips — while builders complain that they can’t get the drywall and hardware they need to finish projects.

Americans have been accustomed to goods that magically appeared whenever they were required. With a pandemic hitting hard at manufacturing facilities and shipping lines, consumers are learning hard lessons about the details — and vulnerabilities — of the nation’s supply chain. But key Florida leaders also see opportunities to take this short-term crisis and translate it into long-term gain for the Sunshine State. If Florida does this right, the benefits could outlive COVID-based kinks in the flow of merchandise, providing a permanent boost in the quest to diversify the state’s economy.

Some of the measures will take time and lots of money — but talk is free, and we give Gov. Ron DeSantis and other state leaders credit for their aggressive promotion of Florida’s alternatives to the congestion at West Coast mega-ports. DeSantis, in particular, has been beating the drum for months, and it’s the right time to make the pitch. This week, shipping analysts celebrated the fact that only 76 ships were waiting at the massive Los Angeles/Long Beach ports, a three-month low — but transit times from the time container ships leave Asia to the point where the cargo is unloaded onto U.S. soil have more than doubled since the pre-COVID era, reports American Shipper magazine. Northern ports, including New York, are also reporting delays.

Some of that traffic is already diverting to Florida, with shippers calculating that the two-week detour from the west coast, through the Panama Canal and into one of Florida’s 15 deepwater ports makes more sense than lingering at sea for an extra month or two. Not all of Florida’s ports can handle the biggest container ships, but Port Tampa Bay, Port Everglades, Port Miami, Port Manatee and North Florida’s JAXPORT are already seeing increases in various types of cargo including bulk materials, automobiles along with the standard 20-foot containers used to bring consumer products from manufacturers in China, India and other foreign manufacturers. That’s a welcome change from 2020 when port activity dropped by a significant 16 percent, the Florida News Service reported.

That traffic augments Florida’s long-held position as cruise capital of the world. The cruise industry is still in recovery mode, but once the pandemic threat fades it should send traffic at the state’s ports (particularly Port Miami, Port Everglades and Port Canaveral, the world’s three busiest cruise ports) surging once again.

There are reasons Florida ports haven’t been as attractive to importers. Along with the obvious geographical challenges, there’s a lack of infrastructure needed to support a more robust flow of cargo. And Florida leaders must recognize that ports are only one part of the picture. The state’s ground transportation network must be robust enough to handle the flow of inbound cargo — and while lawmakers don’t need to revive an ill-conceived and costly scheme to construct “roads to nowhere” that cut across largely vacant land, they should plan on improving the state’s most important arteries for truck traffic, along with augmenting the rail system to move cargo, vehicles and materials quickly and cleanly.

There’s one more clear priority: As Florida pushes to expand its ports, it must set the national standard for environmental stewardship. While shipping and distribution support an estimated 900,000 jobs in the state, that number is dwarfed by the 1.7 million jobs generated by Florida’s tourism and hospitality industry. Florida already has a lot of damage to repair, particularly in the sensitive Indian River Lagoon. The state shouldn’t risk more degradation when it could instead lead the way in responsible port expansion.

Still, Florida leaders are right to see the snarled shipping situation in the nation’s biggest ports as a golden opportunity. Lawmakers are ready to invest in port infrastructure, adding to hundreds of millions in federal funding Florida ports have already received. In his budget outline, DeSantis requested $117 million for port improvements, and the House and Senate appear ready to top that – their preliminary plans include nearly $136 million for ports. In a year where Florida has plenty of money to spend — including the one-time deluge of cash from Washington — these investments in the state’s economic future make sense.

 

Source: Orlando SunSentinel

Business Rent Tax

Gov. Ron DeSantis signed a law that will reduce the tax on commercial leases in Florida.

House Bill 7123, known as the business rent tax, lowers the commercial lease tax by 0.2 percent to 5.5 percent. Although the reduction is small, it marks the third such cut since 2018.

Florida is the only state in the U.S. that collects sales tax on commercial leases, according to NAIOP, the national commercial real estate development association. The state is otherwise considered a tax haven due to its lack of a state income tax.

“In Florida, the commercial tax is imposed on the base rent, plus any additional rent or consideration the tenant is required to pay,” said Darcie Lunsford, who has spearheaded reductions in the tax on behalf of the South Florida chapter of Herndon, Virginia-based NAIOP.

It’s also applied to the tenant’s share of common-area maintenance fees and property taxes. Some Florida counties also tack on a local surtax, including Miami-Dade, Broward and Palm Beach counties.

The tax reduction becomes effective on Jan. 1, 2020 and is expected to generate annual savings of $64.5 million, according to the governor’s office. DeSantis, who won the endorsement of the Florida Realtors in his race for governor, was elected in November. The tax applies to retail, office and industrial leases and does not include hotel or apartment leases.

“Reducing the tax helps to level the playing field when Florida competes for headquarters or major companies,” Lunsford, a senior vice president at Butters Realty & Management said. “It also releases investment capital that companies can now use to grow our businesses, hire people, and invest in equipment.”

“The reduction is minor,” said Marvin Kirsner, a shareholder at Greenberg Traurig. “A previous bill, which did not pass, called for reducing the tax to 3.5 percent, which would have had a much bigger impact, in addition to taxing e-commerce.”

Still, Steven Hurwitz of Colliers International South Florida said that “Over time, additional rollbacks would have an impact on tenants reinvesting in their businesses and the local economy. Any future movement definitely supports that sort of investment in our economy.”

NAIOP’s Florida chapter has been lobbying the state to ratchet back the commercial lease tax for years and is hoping to wipe it out completely.

“Former Gov. Rick Scott attempted to eliminate the rent tax altogether,” Kirsner said.

“It’s definitely a senseless tax that we need to work on eradicating over time, which is what NAIOP’s been doing,” Lunsford said.

Other real estate-related bills are awaiting the governor’s signature. The Florida Legislature recently passed a bill that would make remote online notarizations legal, a move that could speed up foreign and out-of-state real estate investment in the Sunshine State.

 

Source: The Real Deal