Jacob Ogles
Fake flowers, race tickets and collector coins are a few goods often exempted from Florida’s sales tax. And it’s costing the state billions to maintain breaks on certain purchases.
A prominent fiscal watchdog found tax exemptions in need of scrutiny that cost Florida almost $1.4 billion in state revenue.
Florida TaxWatch released a new report, “A Closer Look at Florida’s Tax Exemptions,” itemizing all 281 statutory state sales tax exemptions. Those in total cost the state more than $17.6 billion.
For comparison, Gov. Ron DeSantis last year signed a budget spending almost $110 billion and vetoed more than $3 billion more spending the Legislature had approved. The total money lost in exemptions could boost the final budget by more than 16%.
TaxWatch leaders stressed the vast number of sales tax exemptions in Florida law hold merit. Most of the revenue costs are for life necessities such as groceries, rent and medicine.
But some $1.364 billion worth of exemptions fall into a “miscellaneous” category, including several deemed by TaxWatch as giveaways to certain industries. While some exemptions in that pot may exist for legitimate purposes, the organization said lawmakers interested in closing loopholes should look there.
“The real, ongoing debate centers around whether sales tax exemptions intended to keep taxes on families and businesses low, support the good work of nonprofit organizations, or promote economic development are actually ‘worth’ the revenue they cost,” said Dominic Calabro, TaxWatch founder and CEO.
“With our extensive portfolio of past, current and future research on this issue, we will remain a trusted, easily accessible resource for all involved in this discussion in the months and years ahead.”
What’s on that list?
State law exempts the purchase of film production facilities for private colleges if they plan to use them for a cinematography school. The exemption applies for any post-secondary licensed school that teaches motion picture production and has at least 500 students. The exemption applies to the purchase or lease of materials, equipment and other items used for education or demonstration of the school’s curriculum, including supporting operations.
There has also been an exemption on the books since 2017 for businesses operating municipal golf courses in large counties. Right now, the only place this exemption applies is in Miami-Dade County. There, Gulf Breeze has been fighting in front of the Florida Supreme Court to retain that exemption even though a private company now maintains the city-owned course.
License fees for TV and radio stations right now are tax-exempt as well, as are charges for services rendered from those entities including line charges, talent fees or license fees and charges for films, videotapes and transcriptions used in producing radio or television broadcasts.
Certain items used across a variety of industries enjoy specific tax-exempt status. That includes molds for contact lenses, lithotripters used to break up kidney stones, and fishnets and crab bait used for commercial fishing enterprises.
Tickets for certain major sporting events are tax-exempt if they happen in Florida. That means if the state hosts a Super Bowl or an NBA All-Star game, there’s no sales tax charged by the state to get through the gate. The same goes for the annual Daytona 500 and any qualifying races. If someone buys a skybox at a high school or collegiate sports stadium, that’s also free of sales tax.
Importation fees, registration and a transfer of title for a vehicle previously used overseas is tax-exempt, but only for veterans and their spouses. Veteran organizations also don’t have to pay sales taxes on artificial flowers used for commemoration events.
The state also exempts the sale of gold, silver or platinum bullion worth more than $500. The same goes for collectible coins and currency sold at such high prices, though any sales of coins for prices between face value and $500 will be taxed.
Calabro noted the state for the most part cited justification for tax exemptions when they were first enacted. But a review is always in order.
“Fulfilling our role as the ‘eyes and ears’ of taxpayers, Florida TaxWatch proudly conducts periodic reviews of sales tax exemptions. It’s a complex undertaking, but also a valuable exercise that allows us to share important background and guidance with taxpayers, policymakers or anyone who wants to review the exemptions for themselves,” he said.
