[RPPTL LandTen] FW: NAIOP - Tax Issue

Tue Oct 25 13:37:02 PDT 2011

For your information.

[http://www.shutts.com/shutts100.jpg]
Arthur J. Menor
Partner
________________________________
Shutts & Bowen LLP
1100 CityPlace Tower, 525 Okeechobee Boulevard | West Palm Beach, FL 33401
Direct: (561) 650-8510 | Fax: (561) 822-5510
E-Mail<mailto:AMenor at shutts.com> | Biography<http://www.shutts.com/attorneys-Arthur-Menor.html> | V-Card<http://www.shutts.com/vcard-132.vcf> | Website<http://www.shutts.com/>

________________________________
From: NAIOP South Florida Chapter [mailto:naiop.info at naiopsfl.org]
Sent: Monday, October 24, 2011 11:44 AM
To: Arthur J. Menor
Subject: NAIOP - Tax Issue

[http://www.naiopsfl.org/clientuploads/NAIOP_files/NAIOP_SouthFlorida163pix_RGB.gif]

NAIOP South Florida
1500 W Cypress Creek Rd., Ste. 406
Ft. Lauderdale, FL 33309
naiop.info at naiopsfl.org<mailto:naiop.info at naiopsfl.org>
       www.naiopsfl.org<http://www.naiopsfl.org/index.php?cid=835240&forward=1&curlid=1>

NEWS

Click Here to go the NAIOP Blog<http://www.naiopsfl.org/index.php?cid=835240&forward=160&curlid=31387>

Upcoming Events

November 4

Chapter Meeting

November 17

Broward County Bus Tour

 Current and Future Trends<http://www.naiopsfl.org/index.php?cid=835240&src=events&srctype=detail&refno=67&category=Programs&curlid=31276>

  Member Information

Renew Your Membership for 2011<http://www.naiopsfl.org/index.php?cid=835240&src=gendocs&ref=MembershipInfo&category=Main&curlid=31203>

Sponsorship Opportunities

Clik Here<http://www.naiopsfl.org/index.php?cid=835240&src=gendocs&ref=SponsorshipOpportunities&category=Main&curlid=31197>

Quick Links

NAIOP South Florida<http://www.naiopsfl.org/index.php?cid=835240&src=gendocs&ref=Home&category=Main&curlid=31204>

Calender of Events<http://www.naiopsfl.org/index.php?cid=835240&src=events&curlid=58>

Affiliated Orgs Calendar<http://www.naiopsfl.org/index.php?cid=835240&forward=99&curlid=31205>

Business lease study raises worries about new tax

If you would like to comment on this issue, write to the Department of Revenue ...
French Brown, Deputy Director, Technical Assistance & Dispute Resolution                           Department of Revenue                                                                                                                       P O Box 7443                                                                                                                        Tallahassee, FL 32314-7443

or

E-mail: rulecomments at dor.state.fl.us<mailto:rulecomments at dor.state.fl.us>                                                                                    Reference or Subject Line: 12A-1.070 Workshop 9-21-11

As you may be aware, it is premature to be contacting the Governor or State Legislators.  NAIOP of Florida is monitoring the DOR process and awaiting a proposed, new DOR rule

 Business lease study raises worries about new tax
By Mark Puente, Times Staff Writer
Commercial real estate groups fear lease renovations could lead to "double taxation."

A decision by the Florida Department of Revenue to study how taxes are paid on business leases has raised the ire of commercial real estate groups.  By even studying the issue, the groups fear a tax will be imposed on renovations done after business owners sign leases to rent commercial space. Real estate experts believe any new tax will stymie job growth in Florida.

Not so fast, said Marshall Stranburg, general counsel for the Florida Department of Revenue. The agency, he said, needs to make sure the proper taxes are paid as more complex leases are used. The study is not being done to simply raise revenue, he said. "All we're looking to do is fairly administer the law," Stranburg said. "We need to get a better understanding of these leases." The Department of Revenue held a workshop in Tallahassee recently to examine the issue. Another workshop and a commenting period would occur before any new rules are written, Stranburg said.

Currently, taxes are paid on building materials used for commercial property renovations made after tenants sign leases, according to the Florida Gulfcoast Commercial Association of Realtors. Once the property appraiser reassesses the property, the owner may also have to pay higher taxes if the upgrades increased the property value.  The state also collects a 6 percent tax on the amount paid for leases. In other words, the state gets $60 for a $1,000-a-month commercial lease. Local governments often add 1 or 2 percent to the tax on leases.  In most cases, building owners make the improvements and then amortize the expense over the life of the lease, according to the Florida Gulfcoast Commercial Association of Realtors.

Stranburg stressed that studying the idea doesn't guarantee a new tax. Others disagree.  The issue shouldn't be on the table, said Lee Arnold, chief executive of Colliers International in the bay area and former head of the Tampa Bay Partnership. Another tax will hamper Florida's recovery, he said.  "It's a job-killing measure," he said. "If you're trying to create new business in Florida, another tax is not the way to do it."

Florida Gulfcoast Commercial Association of Realtors characterizes the study as "double taxation" since commercial leases are already taxed in several stages.  Bob Zegota, the group's chairman of government affairs, said the tax would discourage many businesses from leasing or expanding office, industrial and retail space.  He stressed that real estate is the backbone of the Florida economy and has been devastated by the recession.  No new construction is occurring because there are few new tenants and money sources are scarce, Zegota said.  "Yet, with these torrid conditions, Florida officials have chosen to find another way to tax an already limping economic engine," Zegota said. "Will this be the proverbial straw that breaks the camel's back?"

Members of several real estate trade groups are sending protest letters to state officials. Stranburg declined to address their concerns but said the Department of Revenue encourages their input.   "We want to hear from them," he said. "We need their suggestions."

Mark Puente can be reached at mpuente at sptimes.com or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente

THANK YOU TO OUR 2011 GEMSTONE PARTNERS

________________________________
DIAMOND PARTNER

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Flagler-200-pix.gif]

________________________________

EMERALD PARTNER

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Duke-200pix.gif]

________________________________
 RUBY PARTNERS

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Akerman2-200pix.gif]

 [http://www.naiopsfl.org/clientuploads/Gemstone_files/Dewhurst-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Gunster-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/M&M2-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Procacci-200pix.gif]

________________________________
SAPPHIRE PARTNERS

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Brody-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Builders-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/CBRE-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/C&W-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Graham-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Grub-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/JCwhite-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/JLL-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/KTR-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Liberty-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/McCraney-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Miramar-200pix.gif]

NOVA Southeastern University

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Stearns-200pix.gif]

[http://www.naiopsfl.org/clientuploads/Gemstone_files/Stiles-200pix.gif]

[http://www.naiopsfl.org/index.php?cid=835240&forward=img]
</pre>IRS CIRCULAR 230 NOTICE:   Pursuant to recently enacted<br>U.S. Treasury Department Regulations, we are now required<br>to advise you that, unless otherwise expressly indicated,<br>any federal tax advice expressed above was neither<br>written nor intended by the sender or this firm to be<br>used and cannot be used by any taxpayer for the purpose <br>of avoiding penalties that may be imposed under U.S. tax <br>law.  If any person uses or refers to any such tax advice<br>in promoting, marketing or recommending a partnership or<br>other entity, investment plan or arrangement to any <br>taxpayer, then the advice should be considered to have<br>been written to support the promotion or marketing by a <br>person other than the sender or this firm of that <br>transaction or matter, and such taxpayer should seek<br>advice based on the taxpayer's particular circumstances<br>from an independent tax advisor.<br><br><br>The information in this email transmission is privileged<br>and confidential.  If you are not the intended recipient,<br>nor the employee or agent responsible for delivering it to<br>the intended recipient, you are hereby notified that any<br>dissemination or copying of this transmission (including<br>any attachments) is strictly prohibited.  If you have<br>received this email in error, please notify the sender by<br>email reply.  Thank you.<br><pre>
-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://mailman.fsr.com/mailman/private/landten/attachments/20111025/e180c9d6/attachment-0001.html>