Tax Holidays start rolling in the Florida Senate

by | Nov 12, 2019

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Tax breaks on hurricane and back-to-school supplies, expected to be in the mix for any tax package lawmakers cook up during the 2020 legislative session, drew initial support Tuesday in the Florida Senate.

The Commerce and Tourism Committee unanimously backed separate measures that would offer a 10-day sales tax “holiday” on school supplies (SB 542) and an 18-day “disaster preparedness” holiday for items ranging from battery packages and weather-band radios to impact-resistant windows and food storage coolers (SB 524).

Committee Chairman Joe Gruters, a Sarasota Republican who is sponsoring the disaster-preparedness measure, intends to continue advancing proposals as separate bills before they are ultimately combined in a tax package.

“As people are coming and talking of various tax things, I’m going to try to run some of these items as individual bills rather than having all be one bill,” Gruters, who also is chairman of the Republican Party of Florida, said after the meeting. “We’ll have a lot of different tax bills, but the final determination of who runs the tax package … we’ll have to wait until later on and see what transpires.”

During the 2019 session, lawmakers compromised on a $121 million tax package that included a seven-day tax holiday ahead of the hurricane season and a five-day school tax holiday on clothes, supplies and computers.

The package also reduced a sales tax on commercial leases from 5.7 percent to 5.5 percent and directed local governments to include charter schools when asking voters to use property tax dollars for public education.

The 2020 session will start Jan. 14.

As in the past, the House Ways and Means Committee is expected to put together a wide range of proposals, likely to include the sales-tax holidays. A final package likely will be negotiated as budget talks accelerate near the end of the 60-day session.

Along with the tax holidays, lawmakers have proposed measures such as eliminating sales taxes on diapers and incontinence products (SB 54 and HB 87); on products that assist in independent living (HB 93 and SB 192); on industrial machinery parts and accessories (HB 527); and on hurricane shutters and impact-resistant windows (HB 555, SB 844).

So far, the House doesn’t have a version of the back-to-school proposal, filed in the Senate by Gainesville Republican Keith Perry. But such proposals have been popular in the past with the House, business lobbyists and shoppers.

“Some people have asked how much this is going to cost the state, I’d just likely reframe that as how much it saves families,” Perry said.

Under Perry’s proposal, shoppers would be able to avoid paying sales taxes from July 31 through Aug. 9 on clothing costing $60 or less, school supplies costing $15 or less and personal computers and accessories costing $1,000 or less.

The shorter back-to-school holiday approved during the 2019 session on clothes, school supplies and personal computers was projected to save shoppers $41.7 million in state and local taxes. The disaster-preparedness holiday carried a projected $5.5 million savings for shoppers.

Sen. Victor Torres, D-Orlando, asked if the tax breaks could be made available only to Floridians, requiring people to show identification at the time of purchase.

Perry said he wasn’t sure how that could be implemented constitutionally. Also, Sen. Linda Stewart, D-Orlando, said the state may generate more revenue as the discounts attract people living north of the state line to shop in Florida. Those shoppers might buy other types of goods.

“What it ends up doing is providing us with like three times as much income because they’re paying here in Florida,” Stewart said.

The proposed tax holiday on disaster-preparedness supplies would run from May 29 to June 15, a period that includes the June 1 start of the hurricane season.

In addition to the tax holidays, the committee supported a Gruters proposal (SB 576) to increase the annual limit for research and development tax credits on corporate income taxes — from $9 million to $50 million — for companies in the “cleantech” industry.

“It’s about energy, efficiency and environment and companies that are focused on that,” Gruters said. “Not utility companies, but energy companies overall.”

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