Gov. DeSantis kills Department of Revenue tax compliance bill

Gov. Ron DeSantis vetoed legislation Friday that would have introduced a series of changes to Florida’s tax laws.

The bill (SB 1382) would have required taxpayers to produce documents in a timely fashion for audits by the Department of Revenue, a measure aimed at curbing noncompliance with state laws.

DeSantis acknowledged the intention behind the bill but said he could not sign it in its current form. Also, he said President Joe Biden was creating a tough enough fiscal environment.

“I appreciate the Department of Revenue and their efforts to protect the rights of taxpayers, and I understand the problem the bill seeks to address,” DeSantis wrote in a veto message.

“Some of the provisions within the bill are already authorized in law, and I fully expect the Department to faithfully enforce those laws against anyone who would violate our tax code. However, I have concerns that this bill may subject small businesses to additional administrative processes that could prove challenging in a year where the Biden Administration’s policies have led to record inflation and economic turmoil.”

It was sponsored by Sen. Joe Gruters, a Sarasota Republican, and passed with bipartisan support in the House (by a 105-10 vote) and the Senate (passed 33-3). Gruters felt positive about the content of the legislation.

“The bill holds tax cheats accountable and eliminates a cottage law practice niche that hurts people who play by the rules,” Gruters said. “Disappointed it was vetoed but will try to fix whatever issues the Governor has and will refile it next year.”

A number of small business groups raised concerns during the Legislative Session about whether the bill as written would make it harder to correct errors generated by the Department of Revenue itself.

“The bill automatically assumes a business owner acted with willful neglect if their records are incomplete, triggering a 50% fine on top of any tax debt the Florida Department of Revenue had already estimated,” said Bill Herrie, Florida executive director of the National Federation of Independent Business.

Florida TaxWatch leaders thanked DeSantis for vetoing the bill.

“As we warned during the 2022 Legislative Session, many provisions of this bill posed unintended risks to taxpayers and, of particular concern, severe consequences for small businesses,” said Dominic Calabro, President and CEO of TaxWatch.

“Balancing enforcement without infringing on the rights of hard-working Floridians is admittedly a difficult task, and while we appreciate efforts to amend the bill and establish necessary safeguards in the tax audit process, in its final form, it ultimately cast far too wide a net. We commend Governor DeSantis for recognizing this and continuing to be responsive to the needs of small businesses — the backbone of our economy — once again proving the Sunshine State is truly the epicenter of freedom and opportunity in the nation.”

TaxWatch worked with NFIB in lobbying against the bill, and said it would work with the organization and with the Department of Revenue this coming year on legislation that better balances taxpayer accountability with the needs of businesses complying with the law.