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Tax breaks teed up for shoppers, businesses

Photo by Alberto Bigoni on Unsplash

By Jim Turner

News Service of Florida

May 4, 2023

TALLAHASSEE --- Florida lawmakers have negotiated a nearly $1.3 billion tax package for next fiscal year that includes expanding popular shopping sales-tax “holidays,” trimming a commercial lease tax and cutting costs of diapers for babies and adults.

The House and Senate are expected Friday to pass the package (HB 7063) and a record $117 billion budget (SB 2500) before ending the annual legislative session.

Senate Finance and Tax Chairman Blaise Ingoglia, R-Spring Hill, said in a memo that the package “offers broad-based tax relief totaling just less than $1.3 billion." While many of the tax breaks would be provided for limited periods, $303 million would recur each year in the future.

The package, in part, includes a series of bulked-up tax holidays.

That includes holding two back-to-school tax holidays, after holding one holiday in past years. The bill would allow shoppers to avoid paying sales taxes on clothes costing $100 or less, school supplies priced at $50 or less and personal computers that cost $1,500 or less. The holidays would be held from July 24 to Aug. 6 and from Jan. 1 through Jan. 14 and are projected to save $160.6 million for shoppers.

To help people prepare for the hurricane season, the bill would provide sales-tax exemptions on certain storm supplies, a variety of household goods, pet food and pet medication. The breaks would be offered around the start of hurricane season, from May 27 to June 9, and again near the traditional peak of the season, from Aug. 26 through Sept. 8.

Meanwhile, the bill would expand an effort from the past couple of years aimed at providing sales-tax exemptions around the July 4 holiday. The bill includes what is dubbed “Freedom Summer” from Memorial Day through Labor Day. Exemptions during the period would be provided on such things as tickets to movies, live musicals and sporting events, entry to state parks, children’s athletic equipment and supplies for home pools, boating, camping and fishing. That part of the package would reduce state and local taxes of $229.9 million.

A fourth tax holiday would provide exemptions on power tools and work gear over the Labor Day weekend.

The biggest-ticket item for businesses would lower a commercial-lease tax from 5.5 percent to 4.5 percent starting in December. That proposal is expected to save businesses $256 million.

In 2021, the Legislature directed the commercial-lease tax to be cut 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 House staff analysis projected the trust fund would be made whole in May 2024. That would lead to reducing the commercial-lease tax to 2 percent starting Aug. 1, 2024.

The bill also would permanently provide tax exemptions for diapers and incontinence products, baby and toddler items, oral hygiene products, renewable natural-gas equipment, cattle fencing and firearm storage devices.

An exemption would be provided for one year on Energy Star appliances and gas stoves.

The plan also would provide a credit against pari-mutuel taxes and fees paid by thoroughbred horse 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 $5.5 million would go to Tampa Bay Downs and $17 million would go to the Gulfstream Park Racing Association. Some of the money would be used for race purses.

The package also included a Senate request for $25 million in tax credits on brownfield site-cleanup projects.

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