Jacob Ogles
Legislative budget leaders unrolled a final tax relief package that eliminates the business rent tax and sets a back-to-school sales tax holiday. In total, proposed tax cuts add up to $1.29 billion in cuts.
But after arguments about sales and property tax cuts pushed lawmakers into an extended Session, the bulk of savings came chiefly in savings to businesses.
Nearly $905 million in general revenue cuts come from completely repealing Florida’s business rent tax, a levy charged by no other state. Lawmakers in recent years steadily rolled back that rate, last year setting the charge at just 2%. Still, the tax accounted for nearly a billion in revenue.
Rep. Lawrence McClure, House Budget Committee Chair, defended the tax as a benefit to families and businesses.
“The notion that businesses don’t employ people that are part of families is nonsense,” the Dover Republican said, predicting the tax cut will trickle down to business workers.
“It’s intended to do that,” agreed Sen. Ed Hooper, Senate Appropriations Chair. “Now, we can’t make them go spend the money that they just don’t now have to spend.”
But McClure said any economic growth in Florida that comes from eliminating a tax no other state charged will indirectly benefit everyone in the state.
Jeff Scala, a lobbyist with the Florida Association of Counties, took some issue with the Legislature imposing the consequence of killing that tax on local governments as well. He said county governments have supported eliminating the tax, but wanted to retain local sales taxes, most of which were approved by voter referenda, on business rents. The Legislature’s tax relief plan limits local governments’ ability to collect that.
But Rep. Wyman Duggan, a Jacksonville Republican, stressed that the proposal doesn’t completely eliminate local sales taxes. It just means the levy cannot apply on business rents. “We’re only addressing the local government’s use of sales tax on commercial leases, on commercial spaces,” he said.
The final tax relief package also puts in place a permanent back-to-school sales tax holiday, something Senate President Ben Albritton strongly advocated for. The final negotiated package calls for a tax-free period to take place each August.
That comes with a cost too, and nearly $168 million in recurring general revenue.
A series of other sales tax exemptions also made the final cut, including some that raised eyebrows like an elimination of sales taxes on tickets to NASCAR races. Budget leaders said that will ultimately cost a negligible amount of money, and deliver less than a $1 million hit to general revenue.
More costly, the state will exempt certain types of batteries from any sales tax, delivering a $58.5 million hit to state revenues each year. An elimination of sales tax on waterproof tarps will cost Florida $14.4 million a year, while killing taxes on ground anchors, tie-down kits and gas cans will deliver a recurring $22.3 million hit. All those tax cuts come in the name of hurricane preparedness.
Another sales tax holiday, on hunting, fishing and camping supplies between Sept. 8 and Dec. 31 this year, will have a $34.6-million impact on state revenues. That wasn’t proposed as a permanent sales tax holiday so this is a one-time hit to the state’s coffers.
The budget also includes a Home Away From Home Tax Credit, providing credit to a business that makes a monetary contribution to an eligible charitable organization.”
