Lawmakers raise questions, concerns about high Communications Services Tax rates

Lawmakers voiced concerns with the current Communications Services Tax (CST) rate during a workshop in the House Ways & Means Committee.

Florida’s CST rate is the 12th-highest in the nation, largely due to local governments levying additional tax increases on top of the state CST rate.

The CST is a charge added on any cell, landline, cable and satellite television; or video and music streaming service bill.

Last Session, lawmakers took a first step to rein in the CST by including in the tax package a moratorium on local governments from increasing their portion of the CST rates for the next three years. Now, lawmakers are considering how they can further reduce this tax burden on Floridians.

Nearly 500 city and county governments in Florida currently levy a local CST, ranging from 0.3% to 7.7% on top of the state rate of 7.44%. In the last 5 years, 113 of the 481 local jurisdictions have increased their local CST rates a combined 134 times.

Vice Chair James Buchanan questioned why local CST rates are so high and if anything is being done at a national level to address the issue. Rep. Spencer Roach expressed concerns with how local CST revenue is being spent and questioned whether there should be guardrails on how local governments allocate the tax revenues.

The pause on local CST rate increases included in the 2023 tax cut bill was supported by several business groups as well as the cable industry association Florida Internet & Television.

Lawmakers originally sought to set the state’s CST rate at 6% — the same rate as the statewide sales tax — but the provision that made it into the package was scaled back. According to staff analysis of last Session’s bill, that 1.44% reduction would have saved Floridians $168.75 million in aggregate.

The committee’s CST presentation is available here.