TALLAHASSEE — The Florida House Thursday unanimously approved a $1.4 billion tax package that contains a long list of exemptions for consumers and businesses that both Democrats and Republicans praised as a “true tax relief for consumers.”
The bill, which represents $300 million more in exemptions than last year’s tax package, now heads to the Senate to bring the two proposals in line with each other for final passage.
“This year, we hit a home run,” said Rep. Dianne Hart, D-Tampa, a member of the Ways and Means Committee for five years.
She said she was particularly happy to expand the back-to-school tax holiday to two 14-day periods, one in July and August, and another in January for clothing, supplies, learning aids and puzzles, and personal computers.
Economists of all stripes deride tax holidays as popular feel-good measures that provide temporary relief that make politicians look like they are helping their constituents, but studies show they provide little actual relief and are only used by a handful of people.
Only one in five Floridians actually take advantage of the sales tax holiday, one survey reported, while another said 60% of those polled would skip the sales tax holidays altogether.
“In the long run, sales tax holidays leave a regressive tax system unchanged, and the benefits of these holidays for working families are minimal,” said Esteban Leonardo Santis of the Florida Policy Institute.
This year’s package converts several one-off sales tax exemptions permanent, including a tax break on baby and adult diapers, something Rep. Anna Eskamani and Sen. Lauren Book spent years pushing through.
It finally got a “Yes-kamani,” bill sponsor Rep. Stan McClain, R-Ocala, quipped.
It also exempts other baby and toddler products including cribs, breast pumps, strollers, changing tables, car seats and bike seats, baby gates, monitors and clothing.
Eskamani said she was grateful for the bipartisan support of her colleagues to eliminate “this regressive tax on what are essential items that our families need.”
Florida has more than one million children under five years old, with 600 babies born each day, according to Florida Vital Statistics.
The bill provides other permanent exemptions for oral hygiene products, machinery and equipment to produce renewable natural gas, agricultural fencing, and small private investigative agency services.
Rep. Dan Daley, D-Coral Springs, said the package was the result of bipartisan cooperation despite the early Monday and Friday morning committee meetings, and “truly is a pro-consumer effort.”
He also called it an environmentally friendly bill because it provides a one-year sales tax exemption on certain ENERGY STAR certified refrigerators, freezers, water heaters, and washers and dryers.
The bill also provides a one-year exemption for gas ranges and cooktops, a proposal sparked by a federal report that said gas appliances were a “hidden hazard” that could cause respiratory problems in children. A comment by the U.S. Consumer Products Safety Commissioner Richard Trumka that any product that can’t be made safe should be banned caused a panic among mostly conservative politicians, including Gov. Ron DeSantis.
The tax bill also has an estimated 13-month reduction in the business rent tax from 5.5% to 4.5%. Rep. Chip LaMarca, R-Lighthouse Point, praised the Ways and Means Committee for working on lowering the tax, something that is unique to Florida, the only state to charge sales tax on commercial property rentals.
The tax rollback will take effect in August. Legislation approved in 2021 would trigger another drop in the business rental tax to 2% on the first day of the second month after the Unemployment Compensation Trust Fund is restored to pre-pandemic levels.
A legislative staff analysis estimated that could happen by May 2024.
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“I would love to see that 2% down to zero in the future,” La Marca said.
The bill also contains a 14- day “disaster preparedness” holiday in May and June of 2023 for generators and other supplies for families and their pets, and it extends Freedom Week to Freedom Summer from Memorial Day through Labor Day for specific recreational products.
The bill also makes changes to clarify homestead benefits for permanently disabled veterans, first responders and surviving spouses of either, the bill analysis said.
Education buildings with 98-year leases with nominal payments could also qualify for a tax exemption.
Corporations would see tax credits for home builders that buy and install residential gray-water systems, and for companies that purchase machinery and equipment for use in the production of human breast milk fortifiers.
The bill would push back levying natural gas fuel taxes by two years, freeze local communications service tax rates for three years and change a population cap for a tourist development tax provision.
It also would raise the Strong Families Tax Credit to $20 million and revise the qualifications to participate in that program, the staff analysis said.