Governor's Tax Relief package - Florida has a budget surplus of approximately $18 billion and there is certainly sentiment in the Legislature to give some of it back to the taxpayers. It is too early to tell exactly what lawmakers have in mind, but the Governor's tax plan, released as part of his budget recommendations will likely get a lot of consideration. The Governor's plan focuses on one-time sales tax relief for families. It totals $1.4 billion, $1.1 billion of which is non-recurring, including four sales tax holidays and one-year exemptions for items including children's books, toys, and athletic equipment, cosmetic articles, pet food, oral hygiene products, and various household items costing less than $25. There are also permanent exemptions for baby and toddler necessities, cribs and stroller, pet medications, and gas stoves. The Governor also proposes to increase the sales tax collection allowance provided to retailers by $141.4 million. For a compete listing with the value of each provision see this document.
Tax Legislation Advancing in Committee
While it is a good bet that many of the Governor's proposed tax cuts will make it into the final legislative tax package, lawmakers will want to include there own priorities and could very well exceed the Governor's total. Some bill that have already been heard in committee include:
Communications Services Tax (SB 1432/HB 1153) - Reducing this tax is a long-time recommendation of Florida TaxWatch. Florida CST is one the highest in the nation, and the combined state and local tax rate can exceed 15 percent, more than twice as high as the sales tax. Since it applies to cell phones, cable and satellite television video and music streaming, landline phone service (partial exemption), and other services, some taxpayers pay it multiple times. These bills would cut the state tax rate by 1.44 percent. Reducing the regressive CST would benefit virtually all Floridians. This week, Florida
TaxWatch President & CEO Dominic Calabro was on hand at the Senate
Regulated Industries Committee to highlight
our research on the need to reduce the CST. The bill cleared its first committee stop unanimously.
Sales Tax Exemptions - There are bills that would exemption diapers (SB 114), investigative services by small agencies (SB 116), renewable natural gas machinery and equipment (SB 844), and building materials used to construct an affordable housing unit (SB 102).
Fees - Both SB 564 and HB 677 were approved
in committee this week. They would prohibit credit card payment networks from charging
interchange fees, known as "swipe fees", on the sales tax portion of a transaction, as Florida TaxWatch
recommended in a recently published commentary.
This could be done by either deducting It from each transaction at the time of
sales, or through a rebate of interchange fees charged on the sales tax
component of the transaction. Swipe fees in general add cost for retailers which are passed on to consumers. Charging the fees of the sales tax collected by retailers punishes them for performing a service for the state. Both bills cleared their first committee stop in Week 2.
Property Taxes - Two proposed
constitutional amendments have advanced. One would
reduce the maximum assessment growth under Save Our Home from three percent to
two percent. Another proposes to
increase the property tax exemption counties and cities are currently
authorized to offer low-income, long-term elderly residents from $250,000 to
$300,000. The Save Our Homes amendment
(SJR 122/HJR 469) and the exemption for seniors
(SJR 126/HJR 159) have both advanced in both chambers. A general bill (HB 101) also passed that
would add federal law enforcement officers to those that qualify for current
property tax exemptions for serving spouses of first responders and first responders
that were permanently disabled in the line of duty.
The Save Our Homes amendment generated some debate about how
much it would reduce property tax revenues for local governments and schools.
It is estimated that if the lower cap would have been in place in 2022, revenue
would have decreased by $150 million.
However, Florida TaxWatch research has shown that overall, Save Our
Homes does not decrease total revenue as much as it shifts the tax burden to