Disaster sales tax holiday clears first committee despite revenue squeeze

Despite concern over a revenue shortfall driven by the pandemic, a Senate committee on Monday unanimously supported a tax holiday.

The Commerce and Tourism Committee voted 11-0 to advance legislation (SB 734) that would provide a 17-day period when no sales tax will be assessed on disaster preparedness supplies.

Bill sponsor Sen. Joe Gruters said the fact COVID-19 continues to grip the state economically makes the relief all the more important.

“We are in the middle of a crisis and if disaster hits it can make our situation much worse,” he said. “This will allow Floridians to prepare ahead of time as we head into the upcoming storm season.”

The holiday, as proposed, would run from May 28 to June 13, overlapping with the June 1 start of hurricane season. The bill would appropriate more than $70,000 to the general revenue fund, though the full economic cost of a sales tax holiday this has not been calculated by the Revenue Estimating Conference yet.

This wouldn’t be the first time the state held a sales tax holiday to encourage citizens to prep for storms, and sales tax holidays often prove popular among the public. Gruters ran a similar bill in the 2020 Legislative Session, with the House companion ultimately signed by the Governor. Officials last year, incidentally, estimated that would deliver a $20.7 million hit to sales tax revenues but that was before the pandemic struck.

But despite the loss of revenues as a result of reduced spending in the pandemic, Gov. Ron DeSantis this year included both the disaster preparedness sales tax holiday and a similar one for back-to-school shopping in his own budget.

The legislation as written would only offer a cut on taxes to a limited list of supplies, including lights and batteries, tarps, personal radios, fuel tanks, coolers and a few other specified items. It would cover some bigger ticket goods like power generators costing $750 or less and impact-resistant doors and windows, which must be purchased by residential home owners for use at their own property.

From here, Gruters’ bill heads to the Senate Finance and Tax Committee, then to Appropriations. There still hasn’t been a House companion bill filed.