House and Senate negotiators have agreed to a variety of tax cuts valued at an estimated $1.3 billion next year, with a heavy emphasis on eliminating sales taxes for select items but also a cut in the business rent tax, something favored by small businesses throughout the state.
The Senate approved an amendment that reflects the deal between the chambers on Thursday and will vote it out on Friday, the scheduled final day of the Regular Session.
The original Senate version of the bill didn’t include a reduction in the commercial rent tax paid by businesses, but the House preferred it, and is part of the final package.
The cut from 5.5% to 4.5%, however, won’t take effect until Dec. 1, or five months after the original House plan. Due to legislation passed in 2021, the tax is projected to be cut to 2% in the summer of 2024, when the unemployment benefits trust fund is replenished to pre-COVID-19 levels. The cut for a few months will save businesses a projected $215.9 million.
Much of the bill (HB 7063) focuses on eliminating sales tax, including permanent sales tax cuts for diapers and incontinence products, which will save consumers an estimated $27.5 million per year; baby and toddler products; worth $158.7 million per year; and oral hygiene products, worth $39.8 million a year.
There are also one-year sales tax exemptions for EnergyStar appliances ($79 million in savings) and gas stoves ($6.3 million in savings). Firearm storage and safety devices, such as safes and locks, will also be exempt, saving buyers $4.5 million per year.
A series of sales tax holidays for short periods throughout the year that have increased in number are also in the bill. There are two different two-week sales tax holidays on back-to-school items, one from July 24-Aug. 6 and another from Jan. 1-14, 2024, worth an estimated $160.6 million to consumers.
Two different sales tax holidays for disaster preparedness items, running from May 27-June 9 and from Aug. 26-Sept. 8, also made it into the bill, saving $143.8 million for consumers.
The deal reflects much of what Gov. Ron DeSantis called for in his tax cut plan but leaves out a sales tax cut on common household items, such as laundry detergent, toilet paper, paper towels, soap and other items. Exemptions for pet food and pet medications that were part of DeSantis’ plan also didn’t make the cut but were included as part of the disaster preparedness sales tax holiday.
One other provision left out of the plan was a move to reduce part of the discretionary sales surtax in Hillsborough County. The House wanted to cut part of that tax as a way of returning $540 million, which was accrued when a surtax approved by Hillsborough voters in 2018 was ruled unconstitutional in 2021. The Senate preferred to set up a rebate program for residents who paid the tax, but the chambers couldn’t reach an agreement and will instead punt the issue to next year.
“This is something we’re going to have to take up next Legislative Session,” said Sen. Blaise Ingoglia, a Spring Hill Republican and Chair of the Senate Finance and Tax Committee. “We’re running out of time in Session.”