House passes tax package as negotiations loom

by | Mar 6, 2020

Readying for negotiations with the Senate, the Florida House approved a tax package Friday that some Democrats decried as being too focused on giving breaks to special interests.

The House voted 97-16 to pass the package (HB 7097), which would cut revenue by an estimated $115 million next fiscal year.

House Ways & Means Chairman Bryan Avila, a Miami Springs Republican sponsoring the bill, dismissed charges that it would be a corporate giveaway. He said 60 percent of the package is for households, 25 percent is for small businesses and families and 15 percent is for corporations.

Avila pointed to a “difference in philosophy” on the issue.

“We don’t want to penalize our businesses, again whether large and small, because our residents depend upon those businesses for jobs,” he said.

The House package would provide sales-tax “holidays” before hurricane season and the new school year. It also would trim sales taxes on commercial leases by 0.1 percentage point, to 5.4 percent, and reduce the communications services tax, collected on things such as cell phones and cable and satellite television, by 0.5 percentage point.

The communications services tax cut is projected as a $24.9 million savings next fiscal year, growing to $59.7 million a year.

Among other things in the package is an increased refund on aviation-fuel taxes, the elimination of an unused pool of money for professional sports stadiums and the addition of water infrastructure projects to a list of allowed uses for local tourist-development dollars.

Several Democrats criticized the package for failing to end a 2019 corporate income-tax refund. Also, Democrats questioned portions of the proposal such as the aviation-fuel tax cut and a one-time $2 million tax credit for rental car companies.

Rep. Carlos Guillermo Smith, D-Orlando, said tax packages have evolved over the years from being mostly for working families to benefiting corporations.

“The reason the (state) budget is tight is because we’ve refunded hundreds of millions of dollars to the top 1 percent of corporations who made so much money last year that they owed us corporate income taxes,” Smith said. “Did you know that only 1 percent of Florida businesses actually pay corporate income tax? And we’re going to be refunding them $543 million.”

The car-rental tax credit would offset increases in corporate income taxes that arose from a 2017 federal tax overhaul, which eliminated a tax break that allowed car rental companies to put off paying taxes on income from selling vehicles.

Rep. Joe Geller, D-Aventura, said he supported the package’s tax “holidays” but blasted the cut in the communications services tax, which he said would translate to little savings for families

But not all Democrats opposed the package.

Rep. Al Jacquet, D-Riviera Beach, said the savings might not be enough for low-income families, but “there are some” savings, such as part of the back-to-school tax holiday that would allow people to avoid paying sales taxes on up to $1,000 of the cost of personal computers.

“There is enough in here for everyone, even though I do feel those families could get more,” Jacquet said.

The three-day back-to-school tax holiday” would also allow shoppers to avoid paying sales taxes on clothes that cost $60 or less and school supplies that cost $15 or less. The proposal is projected to save shoppers $41.8 million.

A seven-day disaster-relief tax “holiday” at the end of May would allow people to avoid sales taxes when buying items ranging from batteries to portable generators, totaling a projected $5.6 million tax reduction. The timing is geared to the June 1 start of hurricane season.

The Senate has not proposed a tax package but advanced a series of individual tax bills, including measures that would provide an 18-day disaster-preparedness tax holiday before hurricane season (SB 524) and a 10-day back-to-school tax holiday in July (SB 542).

House and Senate leaders will have to work out the tax differences as they negotiate a budget in the coming week.


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