FOR IMMEDIATE RELEASE: Monday, April 14, 2025
CONTACT: Christina Johnson, christina@on3pr.com, 850.391.5040
Tallahassee, Fla. – Today, Florida TaxWatch released Extending The Local Communication Services Tax Increase Moratorium And A Sales Tax Exemption for Broadband Equipment Should Be Part Of Any Tax Relief Package This Session. TaxWatch undertakes this independent research project to Inform the current legislative debate over how to provide tax relief by offering two changes that can help virtually all taxpayers, promote sound tax policy and advance current state policies.
Florida TaxWatch President and CEO Dominic M. Calabro said, “Florida’s high Communications Services Tax raises questions about regressivity, fairness, economic neutrality, its effect on the competitiveness of Florida businesses, and the attractiveness of Florida’s economic climate. Moreover, people without high-speed internet are unable to fully participate in the economic, educational, healthcare, and social options it can provide. This impacts retirees and low-income Floridians and families more than most. These important factors dictate Florida TaxWatch’s call to extend the moratorium on a local CST increase, and to establish a sales tax exemption for broadband equipment.”
Florida TaxWatch Executive Vice President and General Counsel Jeff Kottkamp said, “Only two states have a higher local wireless phone tax than Florida. The 2023 moratorium imposed by the Legislature on local governments to prevent them from increasing the Communications Services Tax should be extended to keep rates from going even higher.”
Florida TaxWatch is encouraged by the language within Senate President Ben Albritton’s (R-Wauchula) proposed tax relief package (SPB 7034: Taxation) to extend the local CST increase moratorium, which is scheduled to be heard before the Senate Finance and Tax Committee on Tues., April 15.
Moratorium on Local CST Increases Should be Extended
The Communications Services Tax (CST) is levied on the sales of communications services including telephone (landline, mobile and voice over internet), cable television and other video services, and direct-to-home satellite television.
There are 481 jurisdictions levying the CST in Florida, making it difficult to determine a true “average” local rate. Due to the many differences in how states tax various communications services, it is difficult to compare tax rates. However, the Tax Foundation annually tracks tax rates on wireless phone services across the country. Its latest report estimates Florida’s average state and local wireless tax rate at 15.1 percent, which is the 15th highest tax rate in the nation.
The Legislature has reduced the state tax rate in the past, but some of that tax relief has been blunted by local governments raising their tax 134 times over the five years period before the 2023 Legislature enacted a three-year moratorium on local governments increasing their CST. This has helped keep the rate from going higher, but the moratorium is scheduled to expire on January 1, 2026.
Sales Tax Exemption for Broadband Equipment
Florida has been making progress on deploying broadband to areas that do not have it, but there are still areas where it is not available. According to ArcGIS, there are more than 193,000 “broadband serviceable locations” in Florida that are unserved plus 93,000 that are underserved.
Exempting broadband equipment from the sales tax can help deploy high-speed internet service to areas that currently do not have it and also help with the development of rural communities. These are two priorities of the Legislature. Modern and efficient communications systems, especially broadband internet service, are essential for economic growth and competitiveness.
Florida TaxWatch has recommended an exemption for all broadband equipment as it would maximize the promotion of investment in both existing and new networks. However, proposed legislation provides the limitation that ensures the exemption would only apply to equipment used in restoring services to areas impacted by natural disasters or when providers are extending broadband internet services to unserved or underserved areas. This reduces the fiscal impact of the legislation. In addition, the exemption could only be obtained by a refund or taxes already paid.
Many states have recognized that taxing broadband equipment can have a negative impact on broadband network development. At least 28 states provide a total or partial sales tax exemption for broadband networks, and at least nine others are currently considering one.
Due to the benefits of expanding broadband networks and holding down communications services taxes that are examined in this report, Florida TaxWatch recommends that the 2025 Florida Legislature:
- Extend the moratorium on increasing local communications services taxes by five years, to January 1, 2031.
- Provide a sales tax exemption for communications and internet equipment that is used in an area unserved by high-speed internet or that was damaged by a natural disaster.
To learn more and access previous reports, please click here.
About Florida TaxWatch
As an independent, nonpartisan, nonprofit government watchdog and taxpayer research institute, and the trusted “eyes and ears” of Florida taxpayers for more than 45 years, Florida TaxWatch (FTW) works to improve the productivity and accountability of Florida government. Its research recommends productivity enhancements and explains the statewide impact of fiscal and economic policies and practices on taxpayers and businesses. FTW is supported by its membership via voluntary, tax-deductible donations and private grants. Donations provide a solid, lasting foundation that has enabled FTW to bring about a more effective, responsive government that is more accountable to, and productive for, the taxpayers it has served since 1979. For more information, please visit www.floridataxwatch.org.
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