BOCA RATON, Fla. -- International Business Machines has canceled a planned $50 million expansion because of Florida's disputed new unitary tax, a company spokesman said.
'IBM has decided not to go ahead with a plan to construct three new buildings,' company spokesman Dan Scherer said Tuesday. He said the unitary tax was the sole reason for the cancellation.
Boca Raton Mayor Bill Konrad said he hopes IBM's decision will spur movement in the Legislature to repeal the tax.
'If I were IBM, I'd be doing the same thing,' Konrad said.
The year-old tax law changed the way Florida taxes multinational companies' worldwide income, according to a formula. Exactly how it affects IBM or any other particular company's tax burden is confidential, a state Revenue Department spokesman said.
A committee appointed by Gov. Bob Graham has recommended the law be changed and several moves are afoot in the Legislature in Tallahassee to repeal it. But Graham hopes to collect $95 million a year for education from the tax.
Scherer said IBM's decision to scrap the expansion was not intended to provoke a response from the Legislature. 'This is a busines decision. It is not a ploy,' he said.
IBM's Entry Systems Division developed IBM's highly successful line of personal computers at the Boca Raton facility. IBM has 8,100 employees in Palm Beach County and is the county's largest corporate employer. It occupies space in 40 buildings.
IBM had previously said it would plan no new expansion in Florida because of the tax, but would go ahead with the Boca Raton expansion because it was announced before the tax law was passed last June.
The tax has drawn criticism from other multinational corporations doing business in Florida. Coca-Cola Chairman Roberto Goizueta said Monday in Miami the tax has ruined Florida's 'favorable business climate' and taken away the edge Florida had over other Southeastern states in attracting business.
