The Outlook for Tax Relief from the 2017 Legislature

There is likely to be some tax relief passed by the Florida Legislature in 2017, but what that will look like, and how big it will be, is still very much uncertain. Following the patterns of recent sessions, the House has rolled out a big tax cut “package” while the Senate has taken a more measured approach, advancing several individual tax cut bills. The ultimate resolution of this issue will be tied up in the budget negotiations, and there is a large divide between the House and Senate budget plans. The Senate proposes to spend much more than the House, meaning they would have less left for tax reductions.

The House Ways & Means Committee has approved the House tax cut proposal (HB 7109), the cornerstone being a reduction in the Business Rent Tax (BRT) as recommended by Florida TaxWatch. Total state and local tax reduction in the first year is $382.5 million, $129.8 million of which are one-time cuts. The recurring amount is $275.9 million.

Because the proposal would reduce the BRT rate by 1.5 percent (from 6.0 percent to 4.5 percent) for two years and then the increase the rate back up to 5.5 percent permanently, there is $513.3 million in non-recurring cuts for two years. Within this report is a look at the provisions in HB 7109, along with the Senate bills that contain one of these provisions and that have cleared at least one committee. Following this analysis is an examination of several bills and proposed constitutional amendments dealing with property taxes that could also impact the taxes Floridians pay.