Florida House proposes sales tax cut, ends 16-year tradition of tax holidays
For the first time in 16 years, the state wouldn't offer
sales-tax "holidays
" under a House proposal that calls for an overall cut in sales taxes.
The House Ways & Means Committee on Wednesday unanimously approved a $5.43 billion package dominated by House Speaker Daniel Perez' proposal to lower the state's sales-tax rate from 6 percent to 5.25 percent.
The package, which will be a key issue in upcoming budget negotiations between the House and Senate, also would reduce a commercial-lease tax from 2 percent to 1.25 percent, along with sales taxes on mobile home sales, electricity and games such as pinball machines.
Gov. Ron DeSantis
is pushing to reduce
property taxes
instead of sales taxes. But Ways & Means Chairman Wyman Duggan, R-Jacksonville, said the House proposal (PCB WMC 25-01) would have the broadest effect.
"Homestead property-tax relief targets or benefits only Floridians at this point, but not all Floridians," Duggan said. "Sales tax relief benefits all Floridians, plus some other people."
House leaders say their proposal would cut taxes by about $5 billion, which would be offset by potential reductions in state spending. But DeSantis wants to offer a one-time property tax break for homesteaded properties and ask voters in 2026 to pass a constitutional amendment to reduce or eliminate property taxes.
The Senate has not gotten behind either proposal. In a memo issued Monday, Senate President Ben Albritton, R-Wauchula, said it would be prudent for any tax package this year to make mostly one-time cuts, with more time spent studying potential longer-term cuts.
Cutting taxes now does little good if they have to be raised two years from now to address budget shortfalls," Albritton wrote.
The House and the Senate will negotiate a budget and a tax package for the 2025-2026 fiscal year, which will start July
As part of a $115.6 billion budget proposal he released in February, DeSantis called for a series of sales-tax holidays. He proposed holding holiday periods to allow shoppers to avoid paying sales taxes on school supplies and clothes in August; on disaster supplies at the start and the peak of the hurricane season; and on recreational purchases throughout July.
DeSantis also proposed a "Second Amendment Summer" sales-tax holiday between Memorial Day and the Fourth of July that would temporarily remove sales taxes on ammunition, firearms and related items.
First created in 1998, back-to-school holidays have been held annually since 2010. They were not held in 2008 and 2009 as the state struggled with budget problems during the recession.
Florida has offered holidays on hurricane supplies each year since 2014, after first offering the discount period in 2006.
While tax holidays have been popular with shoppers and retailers, Perez hasn't embraced them. When the legislative session opened on March 4, he directed House budget leaders to "dive into the budget and find real savings in recurring revenue."
"We spend every new dime of recurring revenue while congratulating ourselves for giving easy-to-fund non-recurring sales tax holidays," Perez said at the time.
In announcing the sales-tax proposal last week, Perez said it "will not be a temporary measure; a stunt or a tax holiday."
As the House pursues cutting the overall sales-tax rate, Rep. Anna Eskamani, D-Orlando, called the proposal "quite historic."
Lawmakers debate regressive tax structure and economic relief for Floridians
"Florida has a very regressive tax structure, partially because we are so reliant on sales tax," Eskamani said.
"For our Floridians that make less (money), they pay more of their income into taxation than those that make more," Eskamani added. "And part of that is because we don't tax income in our state, which is why folks love coming to our state."
The House package would also cut the sales-tax rate on electricity from 4.35 percent to 3.6 percent, the rate on sales of new mobile homes from 3 percent to 2.25 percent, and the rate on coin-operated amusement machines, such as pinball machines, from 4 percent to 3.25 percent.
"Floridians are struggling. I think this will make a difference in everyone's pocketbook when they go to the store and purchase items," Rep. Robin Bartleman, D-Weston, said.
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