Tallahassee, FL - A $102.4 million tax-relief package is ready to go to the House floor, despite Democratic objections Tuesday about part of the plan that would spread local voter-approved tax dollars to charter schools.
Meanwhile, a business-backed tax overhaul had an easier time advancing in the Senate, with the proposal including a move to collect sales taxes on purchases Floridians make from many out-of-state online retailers.
In a party-line, 18-9 vote, the House Appropriations Committee approved the House package (HB 7123), which includes sales-tax “holidays” for storm preparation and back-to-school shopping and a reduction in a commercial lease tax. The bill has cleared its committees and can be taken up on the House floor.
The package is being set up for conference talks with the Senate, where various tax proposals have continued to advance in separate bills, including the overhaul (SB 1112) that drew unanimous support Tuesday from the Finance and Tax Committee.
Part of the Senate bill includes a long-discussed idea about collecting sales taxes on purchases made over the internet from out-of-state retailers. Many of those retailers have not been required to collect sales taxes. Technically, Floridians who buy goods are supposed to the taxes, but few do.
Bill sponsor Joe Gruters, R-Sarasota, said his proposal isn’t about generating additional revenue from taxing the online purchases.
“This bill is about fairness. This bill is about collecting something that is already owed,” Gruters said. “This is not a tax increase. But it will help our overall population in Florida.”
Still, Gruters’ proposal seeks to offset the online sales-tax revenue with a reduction in the commercial lease tax; a tax exemption on the rental of certain heavy equipment; an increase in an affordable housing tax exemption; a sales-tax refund for eligible job-training organizations, and a tax credit for health insurers or health maintenance organization that cover services provided by telehealth.
A reduction in the sales tax on commercial leases from 5.7 percent to 4.2 percent would cut revenue by $205 million during the upcoming fiscal year and eventually grow to $427.9 million a year.
The tax on online sales would be estimated to generate $304.5 million next fiscal year, with the amount growing to $554.4 million a year, according to a Senate staff analysis.
Gruters estimated the revenue could reach $710 million a year.
“There’s so much good that we can do with that,” Gruters said.
Carol Bracy, a lobbyist for giant online retailer Amazon, said company officials support the “general direction and approach” of the proposal, which follows a 2018 U.S. Supreme Court ruling that backed a South Dakota law allowing taxes to be collected from remote sellers with $100,000 of sales or 200 individual transactions into the state.
“They believe this legislation will level the playing field for all retailers,” Bracy said.
In the House package, Democrats said they supported the bulk of the proposal, which is bolstered by a three-day tax holiday for back-to-school shopping, a seven-day tax holiday for disaster preparation and a cut in the sales tax on commercial leases to 5.35 percent. During the holidays, shoppers can buy back-to-school clothes and other needs and disaster-preparation items without paying sales taxes.
The reduction in the commercial leases would produce a savings of $47.9 million in 2020, when it would only be in place half of the fiscal year. The savings would grow to an estimated $99.9 million on a full-year basis.
But Democrats objected to part of the bill requiring school districts to include charter schools in the distribution of increased sales tax money raised through local referendums.
“At least in our county, this was not sold to our people as something that was going to help charter schools,” said Rep. Joe Geller, R-Aventura. “That’s why it passed.”
Bill sponsor Bryan Avila, R-Miami Springs, said the part of the bill addresses a 2017 court ruling that required Indian River County to include charter schools in money raised from a local referendum, recently filed litigation against a Palm Beach County referendum and language in a Miami-Dade referendum.
“This isn’t just a Miami-Dade issue, I just think Miami-Dade is probably one of the most egregious simply because of how they worded their referendum,” Avila said. “It was so vague that it was literally open to whatever interpretation they wanted it to be.”
However, Rep. Barbara Watson, D-Miami Gardens, said she recalls the Miami-Dade referendum didn’t include charter schools.
“There was no misconception, it was clear to our voters what they were actually voting for,” Watson said. “It did not give them the illusion that this was going to be spread amongst others.”
Meanwhile, Rep. Ray Rodrigues, R-Estero, said a recent referendum in Lee County was promoted as assisting all students.
“This amendment will now hold them accountable for the promises they made to the voters that they took at face value when they approved that sales tax,” Rodrigues said.