Despite vastly divergent approaches with the House on tax cuts amid global economic uncertainty, a Senate leader Tuesday said he remains optimistic an agreement can be reached before the end of the legislative session.
The Senate Finance and Tax Committee on Tuesday voted 3-1 to advance a wide-ranging proposal (SPB 7034) that would reduce state and local government tax revenue by $1.83 billion next fiscal year.
“The important part is us being in conferencing (formal negotiations with the House) and sharing ideas and really just having those discussions and going over each of the individual points,” Finance and Tax Chairman Sen. Bryan Avila, R-Miami Springs, said after the meeting. “I think that also by the time we get there we're going to have probably a little bit more clarity as it relates to the federal picture.”
Lawmakers are working on a new state budget and a tax package amid broader economic uncertainty, at least in part fueled by President Donald Trump’s decisions to impose tariffs. The legislative session is scheduled to end May 2.
The Senate proposal calls for permanently eliminating sales taxes on clothes and shoes that cost $75 or less. It also would provide a one-time credit on annual vehicle registration fees and offer a series of sales-tax “holidays,” including a new one on hunting equipment.
The House has proposed a $5.43 billion package that is built on cutting the state sales-tax rate from 6 percent to 5.25 percent. The House also would shave a commercial-lease tax from 2 percent to 1.25 percent.
Gov. Ron DeSantis has pushed to reduce or eliminate property taxes. The Senate bill would require a study on the options and potential impacts of cutting property taxes.
But in voting against the Senate bill, Sen. Mack Bernard, D-West Palm Beach, joined a group of Florida State University students in expressing concerns about the hunting-related tax holiday, which would run from mid-September until the end of the year. During the period, shoppers could buy such things as guns and ammunition without paying sales taxes.
The students raised issues about the hunting holiday being about politics, while Bernard said it was, in part, “too long.”
The House proposal does not include sales-tax holidays. In addition to the hunting-related holiday, the Senate bill includes holidays that would last for a little more than two weeks in May on disaster-preparedness supplies; for all of June and July on recreational items and activities; for 10 days in August on back-to-school supplies; and a little more than a week on tools around Labor Day.
House Speaker Daniel Perez, R-Miami, has been critical of tax holidays. When he announced his proposal for an overall cut in the sales-tax rate, for example, he said it “will not be a temporary measure; a stunt or a tax holiday.”
The House package also calls for the sales-tax rate on electricity to be reduced from 4.35 percent to 3.6 percent, the tax rate on sales of new mobile homes to go from 3 percent to 2.25 percent and the rate on coin-operated amusement machines, such as pinball machines, to fall from 4 percent to 3.25 percent.
The House Ways & Means Committee on Wednesday will consider an additional bill (PCB WMC 25-02) that would make $37.9 million in cuts next year.
That proposal would match part of the Senate tax package by extending until Jan. 1, 2023, a freeze on cell-phone and cable-TV tax rates that are set to expire at the end of this year and expand a sales-tax exemption on gold, silver and platinum transactions.
The state already provides tax exemptions on such transactions topping $500. The Senate proposal would also provide exemptions when sales are $500 or lower.
The House Ways & Means proposal also includes reducing a tax rate on pari-mutuel cardroom operators from 10 percent to 8 percent and redirecting $5 million from a trust fund to promote the horse industry. Instead of the money going to the Florida Thoroughbred Breeders’ Association, $1 million would go to Tampa Bay Downs and $4 million to Gulfstream Park Racing Association.
