Identifier
Created
Classification
Origin
08NASSAU803
2008-11-18 16:57:00
UNCLASSIFIED
Embassy Nassau
Cable title:  

Bahamas Avoids Increased Florida Sales Tax

Tags:  ECON EFIN ETRD BF 
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R 181657Z NOV 08
FM AMEMBASSY NASSAU
TO SECSTATE WASHDC 5888
UNCLAS NASSAU 000803 


STATE FOR WHA/CAR

E.O. 12958: N/A
TAGS: ECON EFIN ETRD BF
SUBJECT: Bahamas Avoids Increased Florida Sales Tax

UNCLAS NASSAU 000803


STATE FOR WHA/CAR

E.O. 12958: N/A
TAGS: ECON EFIN ETRD BF
SUBJECT: Bahamas Avoids Increased Florida Sales Tax


1. Bahamian businesspersons were relieved after the proposal to
repeal Florida's exemption to the six percent export sales tax
failed to make it on the November 20 election ballot. The Bahamas
imports 84% of its goods and products from the U.S., the majority of
which come from Florida. Florida's Tax and Budget Reform Commission
had proposed repealing the sales tax exemption to offset revenues
lost from property taxes. An export tax would have created further
economic hardship in a nation already dealing with the negative
ripple effect the downturn in the U.S. economy has had on the
Bahamian tourism sector.


2. On January 23 the Embassy invited Adam Hasner, Deputy Majority
Leader in the Florida House of Representatives, to address a Chamber
luncheon meeting to discuss the proposed Florida sales tax exemption
proposal and its effect on The Bahamas. Chamber of Commerce
President Dionisio D'Aguilar said such an increase would be
unfortunate for Bahamian businesses and consumers, especially during
this economically challenging time. It would have resulted in
rising costs for consumer goods imported from Florida in addition to
local Bahamian customs duties. Many Bahamian businesses had already
started seeking alternative suppliers in other states in preparation
for the proposed tax increase. A major Bahamian food retail chain
said that its inventory cost would have increased by $3 million per
year. As a result, it would have been forced to relocate $25
million worth of purchases to another state.


SIEGEL