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Retailers in Talks with BP Over Tax Holidays

By: Michael Peltier, The News Service of Florida
By: Michael Peltier, The News Service of Florida

THE CAPITAL, TALLAHASSEE, DEC. 14, 2010 --

Florida retailers on Tuesday said they are asking BP to spend $25 million to reimburse the state for a series of sales tax holidays beginning in February to help lure shoppers to a Panhandle region that took a $454 million hit following the Deepwater Horizon oil spill.

Citing a Florida TaxWatch study on lost retail revenue, Florida Retail Federation president and CEO Rick McAllister said the group is negotiating with BP to pay for three-day sales tax holidays beginning in February to help the lure tourists back to the five-county region after many canceled travel plans last summer because of the spill.

“This is not about claims for losses,” McAllister said. “This is about how we move forward. How do we return Northwest Florida to where it needs to be?”

McAllister said he expects to announce a deal within the next few weeks. The tentative proposal calls for a state sales tax holiday to run once a month between February and August. The proposal would limit the tax-free status to items under $200. BP would pay the sales tax that would have been levied. Marketing campaigns and incentives would piggyback on promotional programs coordinated through the lodging and tourism efforts. The holidays would run Friday through Sunday in Bay, Escambia, Okaloosa, Santa Rosa and Walton counties.

McAllister said Tuesday the holidays could be put in place without having to ask the Legislature for approval as long as the taxes were paid on time to the Department of Revenue. Agency spokesman Rene Watters said Tuesday that the details of the proposal were still being reviewed.

A study by Florida TaxWatch estimated retailers in a five county region saw sales fall $454 million between May and September, including $239 million in taxable sales. The downturn translates into $14.3 million in lost state sales tax revenue and another $1.1 million in local tax collections.

Prior to the spill, the region was experiencing year-to-year revenue gains that outpaced the statewide average, a trend that reversed itself following the April 20 explosion and fire aboard the Deepwater Horizon rig. Tourism related taxable sales over the critical summer period fell 7.1 percent n the region compared to a 2.8 percent gain statewide.

“June 2010 broke a streak of 17 consecutive months where Northwest Florida was doing better than the state as a whole,” said Kurt Wenner, TaxWatch vice president for tax research. “Then all of a sudden, it fell off the table. “

Laurie Olshefsky, who with her husband owns four Panhandle businesses, said the summer sales were off by 30 percent, a considerable drop after seeing double digit growth leading up to the spill. Like other retailers in the region, she relies on the summer tourism season for a large portion of her annual sales.

“When the oil spill hit, people stopped coming and they went other places where they were guaranteed to have a good time with their families.”Olshefsky said. “We were blessed that we were not hit by the oil spill, but we were damaged financially. “

Retailers are worried tourists who cancelled plans to visit the Panhandle last summer and went elsewhere, will not return this summer. Other summer destinations benefited by the bad publicity that cast a shroud over the entire gulf region and prompted financially pinched tourists to look elsewhere for summer fun.

“What keeps me awake at night in regard to Northwest Florida is all those people who went to Myrtle Beach last year instead of going to Destin or Panama City Beach or Pensacola. Did they find something there that they enjoyed so they are going to try it one more year?” McAllister said.


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