The DeSantis administration has started sending more than $600 million to Florida's biggest corporations
Ninety-nine percent of Florida businesses won't get a penny. But 10 corporate giants will get an average of $11 million each
This is Seeking Rents, a newsletter devoted to producing original journalism — and lifting up the journalism of others — that examines the many ways that businesses influence public policy across Florida, written by Jason Garcia.
Gov. Ron DeSantis’ administration has begun sending out more than $600 million to Florida’s biggest and most profitable corporations.
The Florida Department of Revenue said Thursday that the agency has begun distributing what will ultimately total nearly $625 million in corporate tax refunds – thanks to legislation DeSantis signed in 2019 (HB 7127).
The DeSantis administration began sending these corporate tax refunds out a few weeks after the end of the 2022 legislative session – a session in which Florida’s Republican-controlled Legislature slashed $100 million from a program meant to help build affordable rental housing and cut millions from hospitals that care for some of the state’s most vulnerable children and families.
Ninety-nine percent of Florida businesses won’t see a penny of these tax refunds. That’s because they are only for companies that pay Florida’s corporate tax, and Florida’s corporate tax is only paid by the state’s biggest corporations.
But on the other end of the spectrum, more than $100 million of the money will go to just 10 giant corporations, according to Department of Revenue data. Those 10 corporations will pocket refunds of nearly $11 million each, on average.
Company-specific tax details are secret under Florida law, so we can’t say with certainty who these lucky winners are. But litigation records show that for-profit hospital operator HCA Healthcare Inc. is one of Florida’s biggest corporate taxpayers.
The Walt Disney Co. is also a big corporate taxpayer – and for all DeSantis’ talk about getting tough on Disney over the past two weeks, the company is likely to get one of the biggest refunds, too. And so is Comcast Corp., the parent company of Universal Orlando and another big corporate taxpayer.
These refunds are the last piece of what has become one of the biggest corporate tax cuts in Florida history – a package of temporary refunds and rate cuts that together have saved the 1 percent of Florida businesses who pay the corporate tax an estimated $3.7 billion.
That package – the result of an initial tax break signed in 2018 by former Gov. Rick Scott and a second, bigger tax break signed in 2019 by DeSantis – included another $543 million in tax refunds that were paid out to corporations in the spring of 2020. DeSantis could have blocked those refunds but he chose not to.
The package also included another $2.5 billion in savings for corporations that came from slashing Florida’s corporate tax rate from 5.5 percent to 4.458 percent in 2019 and 2020 – and to just 3.535 percent in 2021. (The rate returned to 5.5 percent at the start of this year...despite lobbying by corporate lobbyists for permanent cuts.)
For context: $3.7 billion is roughly what the state of Florida has spent on affordable housing over the past 20 years.
So why did DeSantis, Scott and the Florida Legislature decide to give corporations such a big tax break? Because former President Donald Trump and the then-Republican-controlled U.S. Congress also gave corporations a big tax break.
It may sound nonsensical. But it’s absolutely true.
To explain a little further: In late 2018, Trump and Congress passed the “Tax Cuts and Jobs Act,” which was one of the largest federal corporate tax cuts in American history. But because of the way federal and corporate taxes are intertwined, the Tax Cuts and Jobs Act forced corporations to give back a small percentage of their savings in the form of higher state taxes.
It was still an enormous tax cut overall, because federal corporate taxes are so much bigger than state corporate taxes. But corporate lobbyists used this dynamic to claim that Florida was raising their taxes and to persuade lawmakers to give them an extra state tax cut.
They even convinced lawmakers that these giant tax cuts probably wouldn’t cost that much.
(You might remember that the Legislature got a lot of bipartisan praise this session for helping parents out by eliminating sales tax on diapers and clothing for babies for one year. Well, with $3.7 billion, they could have eliminated that tax for more than 20 years.)
The Florida Department of Revenue says this final round of refunds is being distributed in batches. The first batch has already been sent out; the agency has until May 1 to get them all out the door.
Altogether, the department says the refunds will total about $624.8 million.
Of that, the 10 largest refunds will consume about $105.5 million (17 percent of the total). The 50 largest refunds will consume about $242.8 million (39 percent). And the 100 largest refunds will consume about $306.4 million (49 percent of the total).
Don’t buy all those shares back at once, gang!