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Senators back wide-ranging tax breaks

By Jim Turner

News Service of Florida

April 18, 2023

TALLAHASSEE --- A Senate committee Tuesday moved forward with a package that would provide $973 million in tax breaks next fiscal year, with proposals ranging from holding tax “holidays” to boosting the thoroughbred horse-racing industry.

The Finance and Tax Committee unanimously backed the package (SPB 7062), which is ready to go to the full Senate. The House has proposed a $1.38 billion package, and legislative leaders will negotiate a final tax plan as part of upcoming budget talks.

The Senate and House packages are the same or similar on a series of issues, such as holding sales-tax holidays on back-to-school items, hurricane-preparedness supplies, summer activities and tools. 

Also, they would lift taxes on items such as adult incontinence products, gas stoves, Energy Star appliances and renewable natural gas equipment.

One difference between the plans is that the Senate bill would provide financial benefits to the thoroughbred industry, drawing questions from Sen. Lori Berman, D-Boca Raton.

“We're supporting one industry over other industries. I think we need to look at how much money we're going to be putting into that,” Berman said, before adding, “But, I'm sure this package will be negotiated and changed.”

Committee Chairman Blaise Ingoglia, R-Spring Hill, said after the meeting the thoroughbred industry is operating at a “strategic disadvantage” because of regulations that include a federal law involving anti-doping and medication-control programs. The industry plays an important role in areas such as Marion County.

“We want to make sure that the equestrian community thrives and continues to be an economic boom for the state,” Ingoglia said.

The Senate plan would provide a credit against pari-mutuel taxes and fees paid by thoroughbred tracks, according to a staff analysis. Meanwhile, $5 million would go to the Florida Thoroughbred Breeders’ Association, Inc., for awards to Florida-bred or Florida-sired horses that participate in races in the state. Another $5 million would go to Tampa Bay Downs and $15 million would go to the Gulfstream Park Racing Association.

Other Senate proposals not in the House plan include providing $32.9 million in tax credits on brownfield site cleanup projects and $4.1 million in tax exemptions on the purchase of firearm-storage devices.

The House proposal, meanwhile, would lower a commercial-lease tax by 1 percentage point next fiscal year, a proposal that drew support Tuesday from Sen. Jim Boyd, R-Bradenton.

“I hope we'll continue to do that,” Boyd said.

Two years ago, the Legislature directed the commercial-lease tax to be reduced to 2 percent when revenue from sales-tax collections on out-of-state retailers replenishes the state’s Unemployment Compensation Trust Fund, which became depleted during the COVID-19 pandemic.

A staff analysis of the House bill projected the trust fund would be made full in May 2024. That would lead to the commercial-lease tax reduction to 2 percent starting Aug. 1, 2024. The House package would reduce the rate from 5.5 percent to 4.5 percent this year, before it would go to 2 percent in 2024.

Ingoglia said the commercial-lease tax will be part of the upcoming negotiations with the House. 

“There's never been an aversion to giving money back to the taxpayer,” Ingoglia said. “So, it's just something we have to work out with the House.”

The House and Senate bills include two 14-day back-to-school tax holidays that would allow shoppers to buy such things as clothes and school supplies without paying sales taxes. Those holidays would be held before the fall and spring terms.

Also, the state would hold a 14-day holiday in May and June to allow people to buy disaster-preparedness supplies without paying sales taxes. That period also would include exemptions on certain household items and supplies for pets.

In addition, the state would hold a “Freedom Summer” tax holiday from Memorial Day through Labor Day that would lift sales taxes on certain recreational gear and outdoor activities, and a seven-day “Tool Time” tax holiday in September for tools and equipment.

The House and Senate plans both would provide a sales-tax exemption on adult incontinence products, which would lead to a projected $25.2 million in savings. Also, they would provide exemptions on baby and toddler products, with the House estimating those savings at $147.9 million and the Senate putting the total at $145.5 million.

In lifting taxes on Energy Star appliances, the Senate projects the discount at $79 million, while the House projects $78.1 million.

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