Communications tax cut would help more low-income Floridians get connected

A tax cut being proposed by lawmakers this year could put a lot of cash back in the average Floridian’s pocket.

Currently, cities and counties can set their own communications services tax rate. This has led to more than 400 different jurisdictions, each with their own tax rate. While those rates can vary wildly, they are rarely inexpensive. In most cases, the communications services tax costs customers two-and-a-half times as much as sales tax.

The high rates disproportionately impact low-income Floridians, many of whom are hit multiple times a month, as the charge shows up on bills for cellphones, broadband internet and cable television. On a family’s wireless bill, the cost can quickly balloon because of taxes and fees levied against each device included on a plan.

The costs add up to give Florida the ninth-highest communications services tax rate in the country. In all, Florida individuals and businesses pay $1.76 billion a year in communications services taxes.

Bills filed by Republican Sen. Travis Hutson (SB 1174) and Republican Rep. Jason Fischer (HB 701) aim to bring some stability — and relief — to Floridians by replacing the current patchwork structure and setting a statewide cap on the tax.

The bills would set the maximum communications services tax for charter counties and municipalities at 5% beginning on Sept. 1, followed by a drop to 4% at the beginning of 2022. For noncharter counties, the rate would be 2% beginning on Jan. 1, 2022.

The rate decrease has the potential to make a significant impact on the state economy. According to a study touted by the trade association Florida Internet & Television, every dollar consumers save on connectivity services improves economic welfare by $1.95.

The tax cut would have the added benefit of allowing more of the 1.6 million Floridians who qualify for reduced-cost government programs to get the essential connectivity services they need, which would extend opportunities such as online education and online job searches to more low-income families.

Expanded connectivity would also be helped along by another proposal, HB 9221 from Lighthouse Point Republican Rep. Chip LaMarca. The appropriations request would set aside $500,000 for a study identifying rural and urban areas lacking “efficient and equitable” investment and service for high-speed broadband access.

LaMarca’s bill cleared the Government Operations & Technology Appropriations Subcommittee with a unanimous vote last week. Neither the House nor the Senate bill to cut the communications services tax has been placed on a committee agenda.