Families, businesses pay most of Florida's sales tax, state analysis shows
A 2021-2022 breakdown shows Florida households accounted for nearly two-thirds of sales tax revenue. (Screenshot via Office of Economic & Demographic Research)
Roughly two-thirds of Florida's sales tax proceeds comes from households in the state, the latest analysis prepared by state economists shows, while tourists account for about 16% of the revenue collected.
The annual analysis was posted last week by Office of Economic and Demographic Research and comes amid debate over whether to cut sales taxes c or look for ways to cut property taxes paid by homeowners. Florida levies a 6% sales tax on retail, admissions, transient lodgings, and commercial real estate rentals, unless expressly exempted. A House legislative analysis shows that sales tax is projected to account for nearly 74% of the states general revenue in state fiscal year 2024-25.
Gov. Ron DeSantis wants to cut property taxes first and has cited the payment of sales taxes by 'tourists' and 'Canadians' as one justification. House Republicans, meanwhile, have touted their proposal to cut more than $5 billion in sales taxes as something that could take effect much sooner. House Speaker Danny Perez wants to trim back the sales tax from 6% to 5.25%.
EDR, which reports to the Legislature, estimates the source of sales tax revenue on an annual basis, but because state economists rely on data available from the federal Bureau of Labor Statistics there is a lag, said Amy Baker, coordinator of the office.
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The latest report, which is based on 2021-'22 information, calculates that households paid 65.8% of sales tax collections while businesses were responsible for slightly more than 18%. Tourists accounted for 16.1%.
Florida has a very regressive tax structure partly because we are so reliant on sales tax. For Floridians who make less they pay more of their income to taxation. … Any effort to address that imbalance is a positive one in my book.'
– Rep. Anna Eskamani
These numbers have fluctuated somewhat, and previous reports show that tourists accounted for roughly 13% of sales tax collections in 2016 and 2017. The number of tourists has been on the upswing in recent years, according to Visit Florida, the state's tourism marketing arm. EDR's 2019-20 report estimated that more than 76% of sales taxes collected in that fiscal year came from households compared to 11.9% from tourists.
When discussing his own plan to lower property taxes, DeSantis argued that a cut in sales taxes would allow 'relief for foreigners. It allows relief for visitors and part-time residents. I think that tax relief needs to be focused on Floridians.'
The governor wants legislators to give an estimated 5.1 million residents who have a homestead exemption on their property taxes a rebate averaging $1,000 in December. That would be followed by a 2026 ballot proposal to enact a permanent tax cut.
The House, however, is moving ahead with its sales tax plan. The bill cleared its first committee unanimously on Wednesday with both Democrats and Republicans on the Ways and Means Committee praising the idea.
'Florida has a very regressive tax structure partly because we are so reliant on sales tax,' said Rep. Anna Eskamani, a Democrat from Orlando. 'For Floridians who make less they pay more of their income to taxation. … Any effort to address that imbalance is a positive one in my book.'
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