Florida House backs sales tax 'holidays' and tax cut for leases
TALLAHASSEE, Fla. – A pair of sales-tax “holidays” for storm preparation and back-to-school shopping and a tax cut on commercial leases dominated a package that advanced Thursday out of a key House committee.
But Democrats raised questions about part of the proposal dealing with charter schools and money raised by school districts through local referendums.
The $102.4 million package (PCB WMC 19-02) was approved 14-2 by the Ways & Means Committee. The package is being set up for conference talks with the Senate, which has been rolling out potential tax-reduction measures in individual bills.
Committee Chairman Bryan Avila, a Miami Springs Republican who said he was given a “certain allocation” from House leaders for the tax package, said the proposal remains a “work in progress.” But he added it will provide “much needed relief for our residents.”
However, several Democrats, including some who voted for the measure, expressed concern that the package goes beyond tax reductions. The measure includes language that would seek to ensure charter schools receive a portion of tax dollars from voter-approved referendums.
The proposal is intended to address recent levies in Indian River and Palm Beach counties. Rep. Blaise Ingoglia, R-Spring Hill, said school districts have been writing referendums to “skirt Florida law” regarding charter schools.
“They know deep down that what they attempted to do with cutting out these charter schools was absolutely wrong,” Ingoglia said.
In voting against the overall proposal, Rep. Anna Eskamani, D-Orlando, said she agreed with the tax holidays and the reduction in the commercial lease tax, but she opposed the charter school language.
“I’m a firm believer in school choice, but I believe in also supporting parents that choose traditional public education,” Eskamani said.
The package includes a back-to-school holiday period in early August that would provide an estimated $33 million in savings for shoppers. During the period, shoppers would avoid paying sales taxes on clothing priced at $60 or less, school supplies at $15 or less and on the first $1,000 on personal computers.
The other tax holiday --- providing discounts on such supplies as batteries, tarpaulins, portable generators and even reusable ice --- would be timed around the June 1 start of the annual hurricane season.
The biggest feature of the House proposal is a business-backed reduction of the sales-tax rate on commercial leases, which is currently 5.7 percent. The tax was reduced from 5.8 percent last year.
Under the new proposal, the House would reduce the rate from 5.7 percent to 5.35 percent. That would produce a savings of $47.9 million in 2020, when it would only be in place half of the fiscal year. The savings would grow to an estimated $99.9 million on a full-year basis.
Rep. Dianne Hart, D-Tampa, said if the lease tax had been lowered years earlier, she could have used the savings to expand her small business.
“I know that had I had that for 35 years I could have employed that many more people with those dollars that I spent, because I never owned the actual building,” Hart said.
While the House has put its tax proposals in a single package, the Senate Finance and Tax Committee has approved a number of separate proposals during the past two weeks, including a back-to-school tax holiday (SB 576); a disaster-preparedness tax holiday (SB 1412); and a sales-tax exemptions for diapers and incontinence products. Details of the tax holidays also differ from the House proposal.
Rep. Amy Mercado, D-Orlando, unsuccessfully sought to make several changes Thursday to the House package. Among her proposals was language similar to the Senate’s diaper-exemption bill and an effort to make the tax holidays permanent, rather than being considered for approval each year.
Avila said making the holidays permanent could hinder future lawmakers when the economy again goes sour.
“We will have a downturn at some point,” Avila said. “So, certainly we don’t want to restrict ourselves in terms of the decisions that we have to make going forward.”
Last year, lawmakers approved a $171 million tax package that offered a three-day back-to-school tax holiday; a seven-day disaster-preparation tax holiday; and property-tax breaks stemming from such things as damage from hurricanes and tropical storms.
Also included in the package was a 9 percent reduction in traffic fines for motorists who attend driver-improvement courses.
News Service of Florida