A nonprofit research institute focused on Florida taxpayers is once again backing a decrease in the state’s communications services tax (CST) rate.
Florida TaxWatch highlighted a policy brief Monday that suggests the CST rate is a “burdensome and highly regressive tax on consumers.”
“Florida’s CST is very high, relative to both other states and the sales tax on the purchase of other goods,” reads the brief.
“This high rate makes the tax punitive and distortionary and makes the state less competitive than other states, including the potential for reducing investment in broadband network infrastructure.”
The report charges that “the CST is a tax on consumers, not communications services providers.”
TaxWatch is supporting two pieces of legislation that would reduce components of the CST, which varies across the state because local governments can levy different tax amounts on services from cell phones to satellite television.
Two bills currently moving through the Legislature would reduce the general communications services tax rate by a point, from 4.92 percent to 3.92 percent. The proposals would also reduce the direct-to-home satellite services tax from 9.07 percent to 8.07 percent.
TaxWatch said the proposed reductions in the CST rate would save consumers and businesses $128 million annually.
Sen. Travis Hutson, a St. Augustine Republican, is sponsoring the Senate measure (SB 1000), which is scheduled for consideration by the Senate Community Affairs Committee on Tuesday, one of three more committee stops for the bill.
Rep. Jason Fischer, a Jacksonville Republican, is carrying a similar House measure (HB 693). It has two more committee stops.
“Policymakers would be hard pressed to find a more justifiable way to provide broad-based state tax relief than a reduction in the CST,” said Dominic Calabro, CEO and President of TaxWatch.
In its policy brief, TaxWatch cites research from the Tax Foundation that pegs the state’s rates on wireless phone service use among the top 10 highest in the nation.
“The high tax rate relative to other states also raises economic development and competitiveness concerns,” adds the brief.
TaxWatch noted that the Legislature reduced the CST rate in 2015. The organization has advocated for reductions in the tax since 2001.