(The following editorial appeared on the St. Petersburg Times website on August 17.)
ST. PETERSBURG, Fla. — Somewhere along the line, Florida lost track of a railroad. The railroad didn’t mind, but the blunder cost taxpayers millions and is another example of the gaping holes in a creaky tax system.
The story of the CSX Corp.’s ability to avoid paying taxes on some of its Florida property is the story of how cash-strapped government lets money legitimately owed by giant companies slip through its fingers. As St. Petersburg Times staff writer Sydney P. Freedberg reported Sunday , for years the state did not assess railroad taxes on CSX cargo terminals in Tampa, Orlando and Jacksonville because the company argued those operations were trucking businesses. Yet counties never collected property taxes on the cargo terminals because they assumed the state was taxing them as railroad operations. How convenient for CSX.
The astounding lack of coordination proved profitable for the railroad, whose terminal properties were untaxed or undertaxed for more than a decade. But it cost government millions that could have been very useful in an antitax era where revenues have never caught up with needs in education, social services and other areas. The state finally went after CSX several years ago and collected some additional money, but there is an ongoing battle in state and federal court over how the railroad’s property should be taxed.
It doesn’t appear to be a fair fight. State revenue officials acknowledged they were aware CSX might not have been taxed appropriately for several years but did not aggressively pursue the issue for several reasons – including the prospect of being outgunned in a costly, time-consuming battle of accountants and lawyers. It took a 2002 state auditor general’s report to shine a public spotlight on the issue, and the entire episode raises questions about whether the state has been willing to commit enough expertise and resources to force large corporations to pay their taxes.
This isn’t the only evidence of a less-than-vigorous approach. Freedberg reported last month that tangible personal property taxes are often underpaid by businesses or not paid at all. One county property appraiser called it “almost a voluntary tax,” and the Department of Revenue has given up asking the Legislature for more resources to assist local appraisers after being turned down for years. The trust-me attitude costs local government an estimated $280-million a year in taxes, but the figure could be much higher.
Serious attempts at tax reform haven’t gotten very far in Tallahassee in recent years. But while Floridians wait for a broader, fairer system, they should at least be able to count on government to make a genuine effort to collect the taxes businesses are required by law to pay.