With legislative leaders saying they expect a tighter budget in the coming year, the House Ways & Means Committee on Wednesday will roll out a package of tax cuts that, if left unchanged, would total $647.3 million.
The package (PCB WMC 24-05) would be about half the amount of the $1.3 billion in tax breaks provided during the current fiscal year. House and Senate leaders will finalize tax cuts as they negotiate a budget in the next few weeks for the 2024-2025 fiscal year, which will start July 1.
House Appropriations Chairman Stan McClain, R-Ocala, and Senate Appropriations Chairman Doug Broxson, R-Gulf Breeze, acknowledged last week that the final total would be lower than the tax breaks approved during the 2023 legislative session. Legislative leaders have said 2024-2025 will be a tighter year financially, citing issues such as the end of a flood of pandemic-related cash from the federal government.
As in past years, businesses would be big beneficiaries in the House tax package, including through a one-year additional reduction in a commercial-lease tax that has long been a target of business groups.
The commercial-lease tax rate is set to go down from 4.5 percent to 2 percent in June as part of a 2021 deal that involved a series of issues such as replenishing a pandemic-lowered unemployment compensation trust fund and collecting sales taxes on purchases made by Floridians from out-of-state online retailers. The House proposal would lower the rate further to 1.25 percent starting July 1 for a year.
A House staff analysis projected the reduction would cut state revenues by $268.3 million and local-government revenues by $71.3 million.
Another business-friendly proposal in the package would provide $10,000 in credits against corporate income taxes for companies that employ people with disabilities. The House staff analysis estimated the cut would reduce state revenues by $5 million
For most Floridians, the package is topped by a series of sales-tax “holidays” on school supplies, hurricane gear, tools and recreational activities. But those holidays, which allow people to avoid paying sales taxes on purchases, would not be as generous as during the current fiscal year.
Rather than two 14-day tax holidays for back-to-school items included in the current year’s package, the House proposes a single 14-day period before the start of the school year. Shoppers would be projected to save $97.3 million on purchases such as clothes, school supplies and computers.
In 2023, lawmakers also approved what they called a “Freedom Summer” tax holiday that suspended sales taxes for three months on a long list of recreational items and activities. Under the House proposal, that would be shortened to one month, July, in 2024, with estimated savings to shoppers of $90.4 million.
The House proposal would keep two 14-day disaster-preparedness tax holidays around the June 1 start of hurricane season and around the season’s peak in September. With sales taxes suspended on a wide range of items, from batteries to generators, the disaster-preparedness holidays are projected to save consumers $80.2 million in state and local taxes.
The House also would continue a seven-day tax holiday at the start of September on work supplies such as tools, saving shoppers an estimated $19.8 million.
The House package also includes a series of policy changes, such as allowing Monroe County to use surpluses from tourist-development and tourist-impact taxes to create affordable housing for employees of tourism-related businesses.
In addition to the $647.3 million revenue impact in 2024-2025, the proposal also would have a $28.3 million recurring impact in later years, according to the staff analysis.
