Senate unveils nearly $1B tax cut package

The Senate released its tax cut proposal (SB 7062), a grab-bag of revenue reductions aimed mostly at consumer goods that largely aligns with Gov. Ron DeSantis’ plan he unveiled earlier this year.

The plan, released Monday and scheduled for a vote Tuesday in the Senate Finance and Tax Committee, would save consumers nearly $973 million next year and up to $1.2 billion over two years.

Senate leaders said the plan is aimed at relieving inflation pressures faced by residents who have seen the cost of groceries, gas and other must-have goods grow at rates not seen since the late 1970s and early 1980s.

“Inflation has led to significant increases in costs that are negatively impacting families, especially our most vulnerable,” Senate President Kathleen Passidomo said in a released statement. “However, we are working to ease the pain with broad-based sales tax relief that will be very meaningful for families and seniors.

“This bill creates tax relief opportunities for growing families with new babies, or kids heading back to school, for Floridians looking to prepare their homes for severe weather, and for Floridians, young and old, who want to get out and enjoy all the beautiful natural resources and fun events the free state of Florida has to offer this summer.”

But, like the House tax cut plan released last week (HB 7063), it doesn’t include a piece of DeSantis’ recommendation that would have exempted sales taxes for one year on common household items such as laundry detergent, toilet paper, paper towels and more.

Much of the DeSantis proposal, though, is in the Senate bill. There are two back-to-school sales tax holidays, one from July 24 to Aug. 6 of this year, and another from Jan. 1-14, 2024. Clothing items worth $100 or less, school supplies worth $50 or less and personal computers worth $1,500 or less would be exempted.

Unlike the House proposal, the Senate plan would allow some retailers that have less than 5% of annual sales come from exempted items to opt out of those holidays. The House plan is projected to save consumers $173.3 million over the course of the two sales tax holidays, while consumers would save an estimated $160.6 million under the Senate version.

The Senate is also pitching a permanent sales tax exemption on baby and toddler products, including cribs, strollers, baby gates, monitors, clothes, diapers and more that will save parents $158.7 million per year. Adult diapers would also be exempt.

Oral hygiene products would also get a permanent exemption, saving consumers $39.8 million a year. The exemption for diapers and baby products has been a priority for Democrats for several years, and lawmakers put in a one-year exemption on diapers last year.

“I am proud of our bipartisan work on this year’s Senate tax package which now includes tax relief for baby diapers and incontinence products for Floridians of all ages — because essential health and hygiene items should not be taxed, and Florida families should not be forced to choose between filling up their gas tank, putting food on the table, or buying needed diapers,” Senate Democratic Leader Lauren Book said in a released statement.

Other provisions in DeSantis’ plan are also included in both chambers’ proposals.

Both chambers pitched sales tax exemptions on gas stoves (the House has a permanent exemption and the Senate has a one-year exemption), saving consumers $6.3 million. Both packages also include a “Freedom Summer” sales tax holiday lasting from May 29 (Memorial Day) to Sept. 4 (Labor Day) on tickets to sporting events, movies, museums, concerts, plays and other cultural events, set to save consumers $229.9 million.

Some provisions of the Senate plan that aren’t included in the House plan would save buyers of gun safety devices, such as safes and trigger locks, $4.5 million a year.

Another $27.5 million in tax credits would go toward the promotion of horse races throughout the state, including $5 million to the Florida Thoroughbred Breeders’ Association for purses for Florida-based horses involved in Florida races; $5 million to Tampa Bay Downs track for thoroughbred race purses and maintenance and operations; and $15 million to the Gulfstream Park Racing Association for thoroughbred races and maintenance and operations at its track.

Another difference between the House and Senate plans is how they address the Hillsborough County discretionary sales tax situation.

Hillsborough voters approved a discretionary sales surtax for transportation spending in 2018, but it was ruled unconstitutional by the Florida Supreme Court in 2021. It raised nearly $570 million, and the House wants to give Hillsborough consumers an exemption in the sales tax until the money collected while the surtax was in effect, which is being held by the Department of Revenue, is depleted.

The Senate prefers to set up a program allowing individual Hillsborough County taxpayers to request rebates. That plan is in the Senate’s budget implementing bill (SB 2502) not in the tax cut package.

The House and Senate will likely pass their preferred tax cut plans off the floor before entering formal negotiations to write a final tax cut plan before the Regular Session’s May 5 end date.