Senate unveils tax plan with insurance tax cut, sales tax holidays

TALLAHASSEE, FLA. 3/7/23-Senate President Kathleen Passidomo, R-Naples, speaks during the first day of the 2023 Florida Legislative Session, Tuesday at the Capitol in Tallahassee. EDITOR’S NOTE: This image is comprised of multiple photos taken at the same moment and stitched together in photoshop to create a panorama. COLIN HACKLEY PHOTO

Senate leaders have released a $900 million tax cut plan, incorporating some proposals from Gov. Ron DeSantis‘ budget recommendations to cut insurance premium taxes and increase an allowance for small businesses remitting sales taxes.

The bill (SB 7074) would exempt flood insurance policies enacted or renewed after July 1 from premium taxes for one year.

Insurance companies would also be required to give policyholders with homes covered for $750,000 or less a 1.75% credit on their rates for one year, starting July 1, that credit would then be applied to their insurance premium tax bill. And assessments for the Florida Insurance Guaranty Association, which pays out claimants of companies that went bankrupt, would be eliminated for one year.

The move is expected to save $363.2 million over the next two years. It’s mostly in line with DeSantis’ insurance tax cut plan, but the Senate bill includes a one-year cut to flood premium taxes, while DeSantis sought a permanent cut. The provision is the largest single piece of the Senate plan, and it sets up a clash with the House, which didn’t include the issue in its tax package (HB 7073).

“We also recognize the cost of property insurance is posing a major affordability problem for many Florida homeowners,” said Senate President Kathleen Passidomo, a Naples Republican, in a prepared statement.

“I believe every little bit helps, and reducing the taxes associated with flood insurance and property insurance premiums is a show of good faith for families who are trying make ends meet as our insurance market strengthens.”

Another difference between the chambers is the business rent tax. The rate is set to drop to 2% in August, but the House plan would reduce it to 1.25% for one year, starting July 1.

The Senate plan addresses business costs in a different way. It increases the amount a business can receive for electronically submitting sales taxes from $30 to $45, saving businesses $47.3 million next fiscal year. DeSantis had proposed an increase to $60.

The chambers, however, are on the same page when it comes to sales tax holidays. The Senate plan matches the House bill in setting up a “Freedom Month,” with sales taxes exempted for event tickets to museums, sporting events, plays, festivals, fairs and more, as well as outdoor items. It will last all of July, but that’s a reduction from the “Freedom Summer” sales tax holiday last year that lasted three summer months.

A two-week holiday on back-to-school items starting July 29 is part of the bill, as is a one-week holiday on tools starting Sept. 1. There are also two separate two-week sales tax holidays for disaster preparedness items, starting June 1 and August 24.

“While the federal government just keeps printing money, here in Florida under the leadership of Gov. DeSantis and the Florida Legislature, we are saving it and living within our means, so we can continue to offer sales tax holidays that are extremely popular and highly utilized, as well as key tax relief on homeowner insurance policies, helping families bridge the gap as our property insurance market grows and stabilizes,” said Senate Finance and Tax Committee Chair Blaise Ingoglia, a Spring Hill Republican, in a released statement.

Ingoglia’s committee will take up the bill Tuesday.