Legislation pitched by lobbyist places Hertz in line for $2.3 million tax cut

TALLAHASSEE — The Hertz rental car company is poised to save $2.3 million in taxes under a bill that passed a Senate committee Monday, even as the chamber is poised to pass a budget that includes large cuts to hospitals and universities.

Records obtained by the Orlando Sentinel show an aide to Hertz lobbyist Will McKinley pitched the idea for the bill to Senate Majority Leader Kathleen Passidomo, R-Naples, on Jan. 21.

The email explained that companies such as Hertz, which qualify for the state’s capital investment tax credit program, are unable to use them because of the economic downturn caused by the COVID-19 pandemic.

Florida’s program requires the credits to be used against income derived from the initial investment in a given year. Because of the downturn in the economy last year, Hertz wouldn’t be able to take advantage of the credit this year, and under current law would have to wait 21 years after the start of the project to receive the credit.

In Hertz’s case, they’d have to wait until 2036.

The email asked Passidomo and the Legislature to change the law to allow travel agency and rental car companies that qualify to be able to apply half of the credits they would have received in the current tax year if their revenues fell below 50% from April 2020 through December 2020 compared with the same time the previous year.

The credits could be applied to a company’s corporate income tax bill, its insurance premium taxes or its sales taxes.

“I have just put this in drafting and have put Will as [the] contact,” Becky Kokkinos, Passidomo’s chief legislative assistant wrote to McKinley’s office eight days later.

Passidomo, slated to become Senate president after the 2022 elections, eventually passed the draft bill on to Sen. Ray Rodrigues, R-Estero, who filed it as SB 1246 on Feb. 11. She could not be reached for comment Tuesday.

State economists who analyzed the bill said some companies with travel agency divisions, such as Royal Caribbean Cruise Lines, American Express Travel Related Services and Walt Disney Parks and Resorts could potentially benefit from the change in the law, but zeroed in on Hertz as the main company likely to cash in on their credits.

They estimated the bill would save Hertz $2.3 million, costing the state $1.7 million and local governments $600,000 next fiscal year.

Hertz qualifies for the credits under a 2013 deal that moved its headquarters from New Jersey to Estero, near Fort Myers.

According to state data, the company has invested $90.2 million to build its new campus and created 778 jobs — 78 more than required — and has received nearly $9.8 million in state tax incentives.

At the committee meeting, Rodrigues described the bill as “one-time economic relief to taxpayers in the traveland-hospitality-indus try that have made a significant investment in our state and who have suffered substantial economic harm during the pandemic.”

Sen. Victor Torres, D-Kissimmee, asked Rodrigues whether the companies which stand to save money under the bill were suffering before the pandemic began.

Rodrigues admitted Hertz was troubled before the pandemic began and filed under Chapter 11 bankruptcy last May, two months into the pandemic.

“I believe the Hertz company was having some difficulty prior to the pandemic but is in the position of coming out of bankruptcy reorganization at this time,” Rodrigues said.

Hertz donated $10,000 to the Republican Party of Florida in January 2020, though.

The bill passed unanimously through the Senate Regulated Industries Committee on Monday, but the House version of the bill, HB 863, hasn’t received a hearing in that chamber.