What’s In and What’s Out of the Final 2020 Tax Package

The 2020 tax package (HB 7097) was amended many times as it moved through the process. At first, it grew topping $230 million in tax savings at one point. Then, citing a need to keep more money in reserves for COVID-19 response, it started getting smaller. 

The total of the final tax package is $47.4 million, $10.8 million of which is local. All of the savings come from two sales tax holidays, so the tax cuts are one-time.  This reduces the tax package's fiscal hit to the state to $36.6 million in the upcoming budget year, with no recurring impact. 

The original tax package, developed in the House Ways and Means Committee, contained a mix of tax cuts and tax administration changes. Most of the cuts were small. The two largest tax cuts in the bill were both Florida TaxWatch priorities--a reduction in the communication services tax (CST) of 0.5 percent and a reduction in the business rent tax (BRT) from 5.5 percent to 5.4 percent.  The original bill would have reduced state and local taxes by $162.7 million (the sum of the one-time cuts and the recurring cuts). 

More cuts were added in House the Appropriations Committee, pushing the total to $193.4 million.  Two amendments on the House floor brought the total to $198.4 million.  A delete-all amendment in Senate Appropriations kept most of the House provisions and added many more, raising the total to $233.7 million.  However, Senate leaders hinted it would get smaller.  And it did.

A delete-all amendment on 2nd reading on the Senate floor eliminated many items including the BRT reduction and many of the items the Senate had added just the day before.  The total was now $107.1 Another amendment on 3rd reading removed the biggest cut--the CST rate reduction--leaving the 3-day Back to School Sales Tax Holiday and the 7-day Disaster Preparedness Sales Tax Holiday as the only tax cuts with a fiscal impact left.  The Senate concurred with the new version.

The bill still has many tax administration provisions, at least most of them positive.  The following is a description of all the provisions that were in the many versions of HB 7097.  This report starts with what’s in the final and follows with what dropped out along the way.