House tax plan would cut Hillsborough County sales tax to resolve nixed surtax funds

TALLAHASSEE, FLA. 12/14/22-Rep. Stan McClain, R-Ocala, during session Wednesday at the Capitol in Tallahassee. COLIN HACKLEY PHOTO

Residents and visitors to Hillsborough County would see a temporary 1% cut in their sales taxes under a tax cut plan approved by a House committee this week.

It’s the way House leaders are seeking to reimburse Hillsborough County taxpayers for the additional 1-cent sales tax they paid from 2019 to 2021, when it was ruled unconstitutional by the Florida Supreme Court.

Under the plan, the surtax would be temporarily suspended starting Oct. 1. The county would be paid the amount they would have otherwise received by the Department of Revenue, which collected $569.8 million while the tax was in effect. The cut in the tax would last until the money is gone, which is expected to be two years, the same amount of time the surtax was in effect.

“The bill essentially uses the money collected in this type of circumstance to create a temporary discretionary sales tax holiday,” said Rep. Stan McClain, an Ocala Republican and Chair of the House Ways and Means Committee, which passed the bill (HB 7063) unanimously on Wednesday.

“The intended recipients of the local option sales tax will still receive funds as if the local option sales tax were operating. It’s just these funds will come from the funds collected by the invalid surtax; when those funds are depleted the local option sales tax holiday will end.”

Sen. Blaise Ingoglia, Chair of the Senate Finance and Tax Committee, didn’t address the Hillsborough County tax issue when discussing his chamber’s “tax concepts” this week. He said the Senate’s tax cut package will be released next week.

Each chamber will pass their preferred tax plan off its floor, but the final plan will be negotiated between the chambers along with the budget in the final three weeks of the Session, which is set to end May 5.

During the 2018 General Election, 57% of Hillsborough voters approved the surtax, which was to be used for transportation improvements. But the court determined the way the charter amendment restricted the use of the funds ran afoul of the state constitution.

“The spending directives are unconstitutional in that they conflict with a state law that gives the county commission the authority to allocate such funds,” Justice Charles Canady wrote in a 4-1 opinion. “Because it cannot reasonably be said that the voters would have approved the tax without the accompanying spending plan, we must strike the charter amendment in its entirety.”