After a protracted debate between the House and Senate over how to cut taxes, the bill signed by Gov. Ron DeSantis on June 30 will more heavily benefit businesses than consumers or homeowners.
The bill (HB 7031) will cut more than $2 billion in taxes – $1.3 billion in state revenues, and $700 million from local governments – but nearly 75% of it will come from eliminating the tax on commercial leases.
Also known as the business rent tax, its elimination has long been a for big business lobbies. Lawmakers have reduced it from 5% to 2% in recent years.
On June 23, DeSantis said that while he supports the cut it won’t directly help many residents.
“Florida is the only state in the country that taxes business rent. It’s bad policy and we eliminated it in this (bill) which I think is good don’t get me wrong, but that probably affects a relatively small number of people,” DeSantis has said.
Other pieces of the measure include permanent exemptions from sales taxes for disaster preparedness items, exemptions on gold bullion and NASCAR tickets and a monthlong back-to-school sales tax holiday.
But the bill could be more notable for what it doesn’t have than what it does. DeSantis is miffed the bill and the budget don’t include his proposal to slash the public schools portion of property taxes.
It also doesn’t contain the overall reduction in the sales tax rate that House Speaker Daniel Perez, R-Miami, wanted. His plan to cut the sales tax from 6% to 5.25% was the main point of contention with the Senate, which led to the session to be extended six weeks past its originally scheduled May 2 end date so the chambers could resolve the dispute.
Senate President Ben Albritton, R-Wauchula, rejected that plan over concerns its $5 billion price tag would leave the state with too few resources to pay for vital services in future years.
Here’s a look at some of the main pieces of the tax cut bill:
Business rent tax gone
Starting Oct. 1, Florida businesses will no longer owe taxes on their rent. State economists expect companies to save $1.53 billion per year, costing the state $904.8 million and local governments $623 million per year.
Permanent back-to-school sales tax holiday in August
Every year since 2001 – with a couple of exceptions during the Great Recession – Florida lawmakers have passed a sales tax holiday on back-to-school items such as clothes, backpacks, pencils and notebooks. Now, they won’t have to anymore.
The bill creates an annual back-to-school sales tax holiday for the entire month of August.
Clothes, wallets and bags worth $100 or less will be exempt from the sales tax. So will pens, pencils, erasers, crayons, notebooks and similar items worth $50 or less. Computers worth $1,500 or less – including laptops, tablets and monitors, but not including cell phones – won’t have sales tax either for that month.
The provision will save consumers an estimated $217 million per year, with $167.7 million coming from the state and $49.3 million from local governments.
Disaster preparedness items
Starting Aug. 1, several items previously included in Florida’s disaster preparedness sales tax holidays, held in conjunction with hurricane season in recent years, will be permanently exempt from sales taxes.
Those items include AA, AAA, C-cell, D-cell, 6-volt and 9-volt batteries; smoke detectors and smoke alarms; carbon monoxide detectors; fire extinguishers; portable generators; gas cans; tarpaulins; ground anchors and tie down kits and life jackets.
State economists estimate the changes will save consumers $148.9 million per year, with $115.3 million coming from the state and $33.6 million coming from local governments.
‘Freedom Summer’
Some staples of summer that were included in ‘Freedom Summer’ sales tax holidays approved by the Legislature in recent years will get permanent sales tax exemptions starting Aug. 1, too.
Sunscreen, insect repellant, bicycle helmets and admission to state parks won’t have any state or local levies attached. That’s projected to save consumers $15.4 million per year, costing the state $11.8 million and local governments $3.5 million.
NASCAR tickets are also exempt starting Oct. 1, but the impact on revenues was deemed “indeterminate” by state economists.
‘Heavy’ metals
Current Florida law exempts the sale of gold, silver and platinum bullion if the purchase is more than $500. The new law removes that threshold, making all sales of those precious metals exempt from sales taxes.
Consumers are expected to save $2.2 million, with $1.6 million coming from the state and $600,000 coming from local governments.
Guns, bait, tents, more
Florida will still have a temporary sales tax holiday this year. From Sept. 8 to Dec. 31, sales taxes won’t be applied to a variety of items related to hunting, fishing and camping.
DeSantis had requested the exemption for guns and ammunition. In addition, items related to firearms will also be exempt: holsters, cleaning kits, pistol grips, sights, stocks, bows and crossbows.
Other exempt items include tents selling for $200 or less, sleeping bags, portable hammocks, camping stoves, camping chairs worth $50 or less, camping lanterns and flashlights worth $30 or less, fishing rods and reels worth $75 or less (or $150 for a set) and tackle boxes worth $30 or less.
Consumers are expected to save $44.8 million, costing the state $34.6 million and local governments $10.2 million.
Gray Rohrer is a reporter with the USA TODAY Network-Florida Capital Bureau. He can be reached at grohrer@gannett.com. Follow him on X: @GrayRohrer.
This article originally appeared on Tallahassee Democrat: Tax cuts in Florida: Here’s a look at the state taxes Gov. DeSantis killed or reduced
Reporting by Gray Rohrer, USA TODAY NETWORK – Florida / Tallahassee Democrat
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