State representative raises concerns of price gouging during tax holidays

by | Mar 15, 2023

  • During a presentation to the House Ways and Means Committee, Florida Rep. Rick Roth raised concerns about businesses potentially inflating the prices of consumer goods during tax holidays, which are intended to lower costs for consumers.
  • Economists working under the DeSantis administration are hesitant to suggest regulatory changes to prevent price gouging during tax holidays, as it can be difficult to determine if price increases are due to anticipated demand or supply constraints.
  • Gov. Ron DeSantis has proposed nearly $2 billion in tax relief, including multiple tax holidays on items such as school supplies and permanent tax exemptions for baby and toddler items.

During a presentation given to the House Ways and Means Committee on Wednesday regarding Gov. Ron DeSantis‘ tax-cut proposals, Rep. Rick Roth (R) voiced concerns regarding the potential for businesses to increase the costs of consumer goods once a scheduled tax holiday is activated.

Roth elaborated that when a tax exemption is granted, the intended purpose is to lower the price of goods, allowing consumers to save money, but some businesses may take advantage of the temporary tax break by artificially inflating the prices of their goods.

As part of the 2023-24 state budget proposal, DeSantis included provisions for nearly $2 billion in tax relief. The package includes multiple tax holidays on goods like school supplies and permanent tax exemptions for baby and toddler items, along with a year-long tax exemption on various household items. If passed by the Legislature, the initiative is estimated to collectively save Floridians an estimated $656.1 million.

“One of the things I’ve seen happen over the years [is that] you go to a Home Depot and you’re gonna buy something on a tax-free week, and sometimes you seem to notice the price actually went up in anticipation of the tax holiday,” said Roth. “Is there any consideration given to that type of situation where you’re giving a yearly tax exemption and people increase prices in anticipation of that?”

Economists working under the DeSantis administration seemed hesitant to suggest regulatory changes, however, asserting that it would be cumbersome and potentially prohibitive to try to broadly prevent price gouging.

“I’ve heard these allegations before, and some are probably true while others may not be,” said Holger Ciupalo, an economist for the Governor’s Office. “It’s very hard to distinguish whether somebody increased the price based on thinking they’re going to have more customers come in as a result of the holiday or whether they increased the price as a result of supply constraints. I mean, you don’t really know.”

Ciupalo also said that the state is unable to proactively discern when a business increases prices as a part of day-to-day commerce activity compared to an attempt to capitalize on a particular situation, like an item scarcity or time of higher demand.

“You can do it in retrospect,” Ciupalo continued. “Once you see something happening you would go out and investigate and see what is actually happening, but there’s nothing you can do bill-wise.”

Florida officials most recently took action on price gouging following the landfall of Hurricane Ian, allowing residents to report extreme price hikes on key supplies required to prepare for the storm.

Similarly, in 2020, Attorney General Ashley Moody received more than 3,000 complaints of price gouging related to the COVID-19 pandemic. The complaints involved various items, including hand sanitizer, masks, and cleaning supplies. In all of these cases, state officials took action against the businesses involved, including issuing subpoenas and cease and desist orders.


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