Florida Republicans may shift more taxes from businesses to consumers
The Florida House of Representatives rolled out a package of tax cuts that favors businesses over people and is stuffed with special-interest treats. Plus: Top stories and bills on the move last week.
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The single most anti-consumer law that Florida has enacted since Ron DeSantis became governor was Senate Bill 50.
Passed in 2021, the legislation forced Floridians to pay more than $1 billion a year in extra taxes, by making sure that sales taxes are collected on all Internet purchases.
That change was understandable. Florida, which is the most dependent state in the nation on sales tax, needed to modernize its tax code to reflect the fact that so much shopping now happens online. Enforcing online sales tax collections also made for a fairer playing between Internet giant Amazon and traditional stores.
What made Senate Bill 50 so terrible for consumers was what DeSantis and the Legislature decided to do with all those extra sales taxes Floridians were now paying. Rather than using the money to cut a different tax paid by consumers — or investing it in public services used by everyone — the governor and lawmakers spent all of that new revenue on tax cuts for businesses.
The result: In a single piece of legislation, Florida’s Republican leaders shifted more than $1 billion in taxes off of businesses and on to consumers.
And now, they might do it again.
Last week, the Florida House of Representatives unveiled House Bill 7073, a roughly $700 million package of tax breaks that is badly lopsided in favor of businesses over consumers.
The biggest tax break in the bill is a cut to the sales tax that businesses pay when they lease property, which Chamber of Commerce lobbyists long ago branded as the “business rent tax.”
The business rent tax is already scheduled to plummet from 4.5 percent to 2 percent in a few months. That’s thanks to one of those business-only tax breaks that lawmakers stuffed into Senate Bill 50 back in 2021.
But House Bill 7073 would cut the business rent tax even further — from 2 percent to 1.25 percent for the next fiscal year. That’s far bigger than any of the tax breaks for consumers in the legislation.
But it’s not just that consumers would get less savings than businesses. They would also get less savings than they got last year.
A lot less.
For example: the House tax plan would cut Florida’s back-to-school tax holiday in half. It would give Floridians two weeks of tax-free shopping on items like clothing, computers, and school supplies — compared to four weeks last year.
The House tax plan would also reduce the so-called “Freedom Summer” tax holiday by two-thirds. Floridians would get one month to shop tax-free for things like event tickets and fishing, camping and beach supplies — compared to three months last year.
The House tax plan would even dilute Florida’s disaster-preparedness tax holidays, which are meant to encourage Floridians to stock up on hurricane supplies. It would do this by narrowing the tax holidays to exclude basic-but-important household supplies like paper towels, garbage bags and hand sanitizer — all of which were included in last year’s tax holidays.
In fact, when you add it all up, it sure looks like Republican leaders in the Florida House of Representatives are trying to pay for more tax cuts for businesses on the backs of consumers — just like they did in Senate Bill 50.
Consider this: According to the initial staff estimates, reducing the business rent tax from 2 percent to 1.25 percent would save businesses about $347 million.
That’s almost exactly the same amount of revenue as the state would gain from trimming those tax holidays for consumers. Cutting the back-to-school holiday in half, slashing the Freedom Summer holiday by two-thirds, and carving household supplies out of the disaster-preparedness holidays would collectively save the state something like $342 million.
A special interest buffet
The other thing that stands out about the House tax package is just how larded up it is with special-interest favors. Among them:
Power companies could get a one-year delay before they have to begin paying taxes when they build new facilities, like power plants and solar arrays. This proposal comes from utility giant Florida Power & Light, one of the biggest campaign contributors in the state. The tax break is expected to cost roughly $2.9 million a year in lost revenue — with the financial hit falling hardest on Florida’s rural communities.
The House proposal would also change the way documentary stamp taxes are calculated on a type of reverse mortgage sold to senior citizens. The company lobbying for that tax break is best known as American Advisors Group, one of the largest reverse mortgage lenders in the country. The company is run by California entrepreneur Reza Jahangiri, who state and federal records show has been a substantial donor to Gov. Ron DeSantis. The provision is expected to cost about $5.5 million a year in lost revenue.
There’s also another property tax break for companies that install “renewable natural gas” equipment — machinery that captures methane from sources like cow manure and turns it into pipeline-quality gas that can be mixed with fossil fuel natural gas. One of the companies lobbying for this break is Chesapeake Utilities, a natural gas distributor that is behind several pieces of RNG-related legislation. The tax break is expected to cost roughly $1.3 million a year in lost revenue.
And there’s a spending provision in the bill that would steer $55 million over two years to Florida’s horse-racing industry, to subsidize things like race purses, breeding incentives and track maintenance. Most of the money would go to a pair of tracks — Gulfstream Park in Hallandale Beach and Tampa Bay Downs in Tampa — whose owners are also big political donors.
And this is just the first draft of the Florida Legislature’s tax-cut plan. It’s a good bet that we’ll see a few more special-interest treats surface when the Florida Senate unveils its version of the tax package next week — and even more during the closing days of session.
It doesn’t have to be this way
Before we move on, it’s important to remember that Florida already has the most regressive tax code in the country. The state taxes the poorest 20 percent of families nearly five times as much as it does the top 1 percent of families. Florida also taxes the middle 20 percent more than three times as much as it does the top 1 percent.
A package of tax cuts that disproportionately benefits businesses would make Florida’s tax structure even more unfair.
It doesn’t have to be this way. The governor and the Legislature could instead focus on broad-based tax cuts that directly benefit people — particularly working- and middle-class folks. This is something they have done reasonably well over the past two years, when they chose to eliminate sales taxes on diapers, toothpaste and strollers.
They certainly have plenty of options available to them. They could, for instance, eliminate sales taxes on more basic household supplies that all families buy — if not permanently, then at least for one year. They could pass what advocates call the “Working Floridians Tax Rebate,” which would give more than 2 million lower-income households an average tax cut of $2,400.
And to be clear: Simply restoring those sales-tax holidays wouldn’t be nearly enough. As popular as they are, short-term tax holidays are an inefficient way to save money for consumers. That’s because businesses can step in and swallow some of the savings themselves, by raising prices or doing less discounting than they otherwise would during the tax-free period.
Correction: An earlier version of this story misstated the amount the business rent tax will drop in a few months. It will fall from 4.5 percent to 2 percent. Senate Bill 50 (2021) set in motion a plan to cut the business rent tax from 5.5 percent to 2 percent, which will take effect in June 2024. But the Legislature last year passed an additional, interim cut. So the business rent tax dropped from 5.5 percent to 4.5 percent in December 2023 as a result of that bill, and it will drop again to 2 percent in June 2024 as a result of SB 50.
Billtrack
In honor of the show with the smoothest anchors in television news, here’s a look at some of the bills on the move last week:
House Bill 1: The bill would ban anyone under the age of 16 from having social-media accounts on certain platforms and anyone under the age of 18 from accessing pornography websites. Passed the Senate Fiscal Policy Committee by a 12-5 vote. (Vote sheet)
House Bill 87: The bill would allow people to shoot a Florida black bear if they feel the bear is threatening them, someone else, or their home. Passed the House of Representatives by an 88-29 vote. (Vote sheet)
House Bill 433: The bill would prohibit cities and counties across Florida from passing any local laws that would make businesses pay higher wages, provide any kind of benefits at all, or implement safety precautions for employees working outside in extreme heat. Passed the House State Affairs Committee by a 14-6 vote. (Vote sheet)
Senate Bill 476: The bill would give civil liability rights to a fetus. Passed the Senate Fiscal Policy Committee by a 10-6 vote. (Vote sheet)
Senate Bill 480: The bill would make it easier for power companies to renewable natural gas investment costs off on electricity customers. Passed the Senate Fiscal Policy Committee by 16-0 vote. (Vote sheet)
House Bill 549 and Senate Bill 1222: The bills would set longer prison sentences for shoplifters. HB 549 passed the House Judiciary Committee by a 14-7 vote. SB 1222 passed the Senate Civil and Criminal Justice Appropriations Committee by an 8-1 vote. (House vote sheet, Senate vote sheet)
House Bill 609: The bill would block local governments from raising business taxes. Passed the House State Affairs Committee by a 12-7 vote. (Vote sheet)
Senate Bill 738 and House Bill 789: The bill would make it harder to sue industrial polluters who contaminate lakes, rivers and groundwater. SB 738 passed the Senate Fiscal Policy Committee by a 13-3 vote. HB 789 passed the House Infrastructure Strategies Committee by a 16-7 vote. (Senate vote sheet, House vote sheet)
Senate Bill 886: The bill could lower taxes on timeshare owners and timeshare developers by nearly $200 million a year. Passed the Senate Finance and Tax Committee by a 4-2 vote. (Vote sheet)
House Bill 917: The bill would allow homebuilding companies to use more 16- and 17-year-old teenagers on residential construction sites. Passed the House Education & Employment Committee by a 17-0 vote. (Vote sheet)
Senate Bill 996 and House Bill 1285: The bills would allow the state to create an easier-to-obtain teaching certificate for teachers in classical charter schools. SB 996 passed the Senate Fiscal Policy Committee by an 11-5 vote. HB 1285 passed the House of Representatives by an 84-35 vote. (Senate vote sheet, House vote sheet)
House Bill 1071: The bill would both ban the sale of lab-grown meat and prevent cities and counties from regulating electric-vehicle charging stations. Passed the House Agriculture & Natural Resources Appropriations Subcommittee by a 9-3 vote. (Vote sheet)
Senate Bill 1106: The bill would allow the state-run insurance company, Citizens Property Insurance Corp., to sell policies covering more expensive homes. Passed the Senate Agriculture, Environment and General Government Appropriations Committee by a 10-0 vote. (Vote sheet)
House Bill 1269: The bill restricts the THC levels in marijuana sold for personal use, in anticipation of a proposed constitutional amendment that would allow recreational marijuana in Florida. Passed the House Health & Human Services Committee by a 14-6 vote. (Vote sheet)
House Bill 1277: The bill limits the ability of a city to use revenue generated by a city-owned electric company to fund other city services. Passed the House Commerce Committee by a 15-2 vote. (Vote sheet)
House Bill 1289: The bill would give state officials more reasons to deny unemployment insurance to laid-off Floridians. Passed the House Infrastructure & Tourism Appropriations Subcommittee by an 8-4 vote. (Vote sheet)
House Bill 1347 and Senate Bill 1436: The bills would allow loan companies that target low-income borrowers with poor credit histories to charge much higher interest rates. HB 1347 passed the House Commerce Committee by a 16-0 vote. SB 1436 passed the Senate Agriculture, Environment and General Government Appropriations Committee by an 8-2 vote. (House vote sheet, Senate vote sheet)
House Bill 1349: The bill would require school districts to begin teaching kids about communism as early as kindergarten. Passed the House PreK-12 Appropriations Subcommittee by a 10-2 vote. (Vote sheet)
House Bill 1645: The bill would loosen regulations on natural gas infrastructure, eliminate green-energy programs, and ban offshore wind production. Passed the House Commerce Committee by an 11-4 vote. (Vote sheet)
House Bill 7073: The bill would provide roughly $700 million in tax cuts, mostly to businesses. Passed the House Ways & Means Committee by a 16-6 vote. (Vote sheet)
Reading list
Lobbyist wrote bill to protect Visit Orlando but sought to hide his role (Orlando Sentinel)
Linda Stewart, caught working with tourism lobbyist, is what’s wrong with Florida politics | Commentary (Orlando Sentinel)
Orange County Mayor Demings fires lobbyist over conflict of interest (Orlando Sentinel)
‘There was a lot of anxiety’: Florida’s immigration crackdown is causing patients to skip care (Politico)
Tens of thousands of workers in Florida have just lost their labor unions. More is coming (WLRN)
With Florida seen as solidly Republican red, DeSantis and GOP clamp down on blue cities (Tallahassee Democrat)
Tallahassee bills aim to kill efforts by counties to protect workers from extreme heat (Miami Herald)
Florida values? Put minors to work — and block heat, safety protections | Commentary (Orlando Sentinel)
Bill could boost Florida’s ‘renewable’ fuel industry. Critics say it will cost consumers (Miami Herald)
A bill would allow protected lands to be sold for agriculture (WUSF)
St. Petersburg leaders raise idea to break off from Duke for utilities (Tampa Bay Times)
Federal judge ends Florida’s oversight on wetland development (Tampa Bay Times)
Medicaid Expansion Bill Coming By Monday, Mississippi Lt. Gov. Hosemann Says (Mississippi Free Press)
I wonder if they will be teaching kindergartners this in the GOP's communism class curriculum: “There must be something rotten in the very core of a social system which increases its wealth without diminishing its misery.” — Karl Marx
So glad I moved away.