Gov. DeSantis signs gas tax relief, ‘Tool Time’ holiday measures in sweeping package

Ron DeSantis. Image via AP.

Gov. Ron DeSantis has signed this year’s record tax relief bill, which will save Floridians an estimated $1.1 billion.

The tax package (HB 7071) includes major first-time initiatives, like reducing the state and county gas tax in October for an estimated $200 million in driver savings. The package also includes a new week-long “Tool Time” sales tax holiday on supplies for skilled trades — worth an estimated $12.4 million.

This coming fiscal year’s predicted $1.1 billion in savings for taxpayers overshadows the $196.3 million in relief estimated in the current fiscal year, which expires June 30. The Legislature passed the bill, originally assembled by the House Ways and Means Committee and Chairman Bobby Payne, unanimously in March.

Florida has been able to fund the record relief because the state has outpaced revenue estimates for 17 consecutive months despite the COVID-19 pandemic. Florida has plenty of cushion in its budget, according to DeSantis, who predicted the state would have a $20 billion surplus by the start of the coming fiscal year.

But he warned that the nation could fall into a recession because of President Joe Biden’s pandemic relief efforts.

Speaking in Ocala on Friday, DeSantis told reporters he was signing the bill to combat inflation.

“I think we’ve done more than any other state to step up against the Biden-flation headwinds to give relief to our citizens,” the Republican Governor said.

DeSantis had asked lawmakers to make the gas tax initiative a $1 billion program lasting five months. However, the Republican-led Legislature only approved one month of relief. They narrowed their options to May and October, because those months have the fewest number of out-of-state visitors, and ultimately chose October.

Democrats have criticized Republicans for the move, accusing them of timing the relief just ahead of the 2022 Midterms. Floridians deserve relief sooner because of high gas prices, they contended.

The “Tool Time” holiday will waive sales taxes on tools for skilled trades like mechanics, carpenters, plumbers and electricians. The holiday will run from Sept. 3-9, coinciding with Labor Day on Sept. 5.

Other more traditional sales tax holidays will return this year, like the back-to-school and disaster preparedness holidays. However, those holidays are being extended to two weeks. The school supplies holiday will run from July 25 to Aug. 7 and spare an estimated $100.1 million in sales taxes while the disaster prep holiday will run from May 28 to June 10 and waive an estimated $25.6 million.

Freedom Week will also return after the inaugural celebration last year. The tax holiday will again run during the first seven days of July, exempting an estimated $70.6 million in sales tax on outdoor gear and activities.

“With hurricane season fast approaching and summer events around the corner, Floridians can soon take advantage of the wide ranging tax relief offered in this legislation championed by Speaker (Chris) Sprowls and signed into law by Governor DeSantis today,” Payne, a Palatka Republican, said in a statement.

There’s also a two-year break for impact-resistant windows, doors and garage doors; one-year exemptions on diapers and clothing for infants and toddlers; a one-year exemption on ENERGY STAR appliances; a three-month exemption this summer on children’s books; and a reduction in the mobile home tax rate from 6% to 3%.

Tickets for the Daytona 500, Formula One races and World Cup qualification matches also will be exempted from sales taxes.

Properties in and around the site of the collapse of the Champlain Towers condo building in Surfside also will receive a property tax abatement.

Lawmakers also included tax relief on diapers, a longtime ask of Democrats that even earned DeSantis’ appreciation. The Governor and First Lady Casey DeSantis, parents to three children, still have one daughter in diapers.

“When you have prices going up, there are certain things you can cut back on. You gotta do the diapers. There’s really no way around that,” the Governor said.

The Legislature has not yet delivered the Governor its $112.1 billion budget proposal for the 2022-23 fiscal year.

Meanwhile, as the state forgives $1.1 billion in taxes, the corporate tax rate will increase by 1 percentage point, resetting the rate at 5.5% after a pandemic-era tax break for businesses.

DeSantis has until May 20 to sign this year’s tax relief package.

House Speaker Chris Sprowls called it the “largest middle-class tax relief package” in Florida history.

“A bill like this has never been more needed than it is right now,” Sprowls said in a statement. “Reckless federal spending sent inflation rates spiraling higher than we’ve seen in generations, and Floridians are feeling the impacts. From tools to diapers to books for summer reading, this billion-dollar tax package includes something for every Floridian, and that’s what I’m most proud of.”

Sprowls also thanked Payne and Senate President Wilton Simpson.

“There are so many provisions in this bill that will make a real difference in people’s lives — from a permanent reduction in sales taxes on new mobile homes to an exemption for farm trailers and fencing used in agriculture, there is something for every Floridian,” Payne said. “Giving people more control over their hard-earned money is the kind of work that makes me proud to serve in the Florida House and under the leadership of Speaker Sprowls.”

Scott Shalley, president and CEO of the Florida Retail Federation, thanked DeSantis and the Legislature for supporting residents, families and trade workers.

“Florida’s tax-free holidays cut costs for Floridians and allow them to invest in home protection, save on family fun, stock up for school and pursue trade opportunities,” Shalley said.

In a statement, Agriculture Commissioner Nikki Fried, a Democrat running for Governor, credited Biden and Congress’ American Rescue Plan for infusing Florida with $10 billion over two years.

“Unfortunately, the package also includes billions in corporate giveaways Republicans included at the expense of Florida taxpayers, but thanks to the American Rescue Plan and the advocacy of Democrats in the Florida Legislature, many working class Floridians will thankfully benefit from some tax breaks as well,” Fried said.