Local tax break could result in $1.1 million revenue cut

Published: Sunday, January 13, 2008 at 6:01 a.m.
Last Modified: Sunday, January 13, 2008 at 12:00 a.m.

A statewide tax break for businesses will result in a revenue cut of about $1.1 million for Alachua County government if it is passed by voters Jan. 29, officials estimate.

While the proposed homestead exemption increase and Save Our Homes portability have gotten the most attention on the Jan. 29 referendum, another plank will create a $25,000 exemption for business furniture, computers, machinery and equipment.

Alachua County Property Appraiser Ed Crapo said the county has about 13,000 tangible accounts - businesses with furnishings, fixtures and equipment used for a business purpose that is subject to taxation.

About 10,000 of them would "disappear" because they are valued at $25,000 or less, Crapo said.

"Some of them will be farms with their equipment. It could be one-person attorney's office or small retail where they don't have a whole lot of shelving," Crapo said.

"In the general fund, we would lose about $1.1 million in revenue. But these are really rough numbers."

The general fund is the portion of the county's budget that includes property tax revenue. It is the portion over which the County Commission has the most spending flexibility.

County officials estimate they will lose about $10 million in tax revenue from the proposed homestead exemption increase if the amendment passes.

B.J. Webster, owner of Phyl's Barber Shop in downtown Gainesville, looked around at the barber chairs and counters, and said he probably will be fully exempt if the measure passes.

"I doubt if I even have $20,000 worth of stuff. It's more like $10,000," Webster said. "We have a lot of used stuff. We would probably fit in that category of being exempt anyway."

Mike Davidson, owner of Harvest Thyme Cafe downtown, said he believes the exemption would be a nice break for small business owners.

"Every little little bit helps. I think it would really help larger companies," Davidson said. "With what's going on now, it would probably be a pretty good boost for the economy."

The $25,000 exemption is worth about $500 in taxes. Crapo said property appraisers are not certain whether they will have to continue to monitor accounts of exempt businesses to determine if their tangible property eventually passes $25,000.

At the other end from the small mom-and-pop businesses are the big stores and chains. Crapo added chains stores will get a break on each location.

"Publix will get a $25,000 exemption on every Publix in the state of Florida. CVS, Kangaroo - they will get $25,000 on every one in Florida," Crapo said.

Cindy Swirko can be reached at 352-374-5024 or swirkoc@ gvillesun.com.

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