Tax cuts on diapers, toothpaste and trigger locks. And tax breaks for homebuilders, power companies and home-alarm firms.
The Florida House and Senate just rolled out $1 billion-plus packages of tax cuts. Let's see what's in 'em.
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One proposed tax break could save $300,000 a year for ADT Inc., the home-security company based in Boca Raton.
Another could save $2 million or more for homebuilding giant Lennar Corp.
A third was written by lobbyists for energy firm Chesapeake Utilities Corp.
And all three are among the dozens of different tax breaks stuffed inside sweeping new tax packages that have been rolled out over the last few days by both the Florida House of Representatives and the Florida Senate.
The competing proposals — each of which tops $1 billion in total cuts — include some big breaks that should genuinely help everyday Floridians. But they also include some special-interest giveaways and gimmicks that won’t do much good for anyone.
The two chambers will spend the next two-and-half-weeks negotiating a single, unified package to send to Gov. Ron DeSantis. More will be added at the last-minute: DeSantis said today that the final tax package could ultimately top $2 billion by the time all is said and done.
So let’s take a closer look at what’s inside right now.
The highlights
Both the House and Senate plans (House Bill 7063 and Senate Bill 7062) would permanently eliminate sales taxes on diapers and adult incontinence products; baby and toddler supplies, like cribs, strollers, breast pumps and baby wipes; and oral hygiene products, including toothpaste, toothbrushes, floss and mouthwash.
Both bills would also exempt energy-efficient household appliances from sales tax for a second year in a row. They would stop state taxes from being charged on federal small business loans. And they would expand property tax breaks for disabled veterans and for surviving spouses of military members killed in combat or law enforcement officers killed in the line of duty.
The Senate has proposed cutting sales taxes on gun-safety equipment, like gun safes and trigger locks. The House has one provision that would let a small county in the Florida Panhandle continue using hotel taxes to pay for lifeguards, and another that would ensure “All Pro Dads,” a non-profit co-founded by former Tampa Bay Bucs Coach Tony Dungy, can qualify for a state tax break meant to support children’s charities.
And both chambers avoid a gigantic corporate tax break that big companies like Anheuser-Busch have been lobbying for.
The lowlights
The House and Senate plans both have sales-tax breaks for companies that produce so-called “renewable natural gas” — which is a methane-based fuel that comes from sources like cow manure, sewage plants, and landfill gas.
Records show this particular tax break — which would save RNG companies nearly $1 million a year — was initially written by lobbyists for Chesapeake Utilities Corp., which is building an RNG plant at a dairy cattle operation in North Florida. Environmentalists detest this tax break because it would subsidize methane, which is a powerful greenhouse gas.
Both chambers also want to give corporate tax breaks to homebuilders and developers who install “graywater” water-recycling systems in the homes they build. Records show this tax break comes from a company backed by Lennar Corp., the nation’s No. 2 homebuilder — and one of the few developers big enough to benefit from a corporate tax break.
The House version is slightly better: It would at least cap this tax break at $2 million per homebuilder. And it would end the tax break entirely after five years (which is important because economists have warned that it could get very expensive, very fast). The Senate doesn’t have either of those guardrails in its proposal. .
The Senate plan also includes a break that records show was written by lobbyists for ADT Inc. That tax break would create a tax exemption for loans that ADT uses to finance the installation of home-alarm systems. ADT lobbyists have told staffers that the company expects to save around $300,000 a year; the tax break is expect to save all home-alarm companies — but cost the state — about $1.5 million a year.
What’s more, the Senate plan also has more than $60 million in tax-and-spending provisions to subsidize the thoroughbred-racing industry. The provisions include $55 million that would be given to Gulfstream Park — the Stronach Group-owned track in Hallandale Beach — Tampa Bay Downs, and the Florida Thoroughbred Breeders’ & Owners’ Association.
Both chambers — and Florida Gov. Ron DeSantis — also want to delay the start of a new tax on natural gas used to fuel vehicles. That would be a boon for a handful of companies that have natural gas-powered vehicles in their fleets, including garbage-hauler Waste Management Inc. and some large beer distributors.
The somewhere-in-betweens
One of the biggest tax breaks in either plan is a House proposal to slash the tax businesses pay when they rent property.
That tax, which business lobbyists have dubbed the “Business Rent Tax,” is already scheduled to fall from 5.5 percent to 2 percent in two years. That’s thanks to Senate Bill 50, which DeSantis and the Legislature enacted in 2021. It included a couple of mammoth tax breaks for businesses — which were paid for by forcing Florida consumers to pay more sales taxes.
But the House wants to give businesses an extra gift, by cutting the business rent tax from to 4.5 percent next year. That would save businesses an extra $400 million. One of the biggest beneficiaries would be Publix Super Markets Inc., which spends hundreds of millions of dollars a year on leases — although any business that rents property would likely benefit, too. (Or, at least their landlords would.)
But it’s a question of priorities. For instance, instead of giving an extra $400 million to businesses, you could use that money to eliminate sales tax for one year on household supplies like paper towels and toilet paper and and on children’s toys. (Those are both ideas that DeSantis proposed before the session began.)
The Senate plan doesn’t have the business rent tax break. But it does include a different business tax break — one that DeSantis has proposed — that would increase the amount of sales tax that stores get to keep for themselves as compensation for collecting the tax.
Right now, stores get to keep 2.5 percent of the first $1,200 of tax they collect every month — up to $30. The Senate plan would let stores keep the first $45 they collect each month.
Now, changing the formula would be great for very small stores, who might not have enough sales every month to get the full $30 “collection allowance.” But raising the cap from $30 to $45 would be a windfall for big chain retailers with lots of stores, because they get an allowance at each store they own.
Meanwhile, the House and Senate each have different tax breaks for the agriculture industry. The House has a small break that would cut taxes on cattle fencing. The Senate has a significantly larger break that would exempt agricultural land from special property taxes charged by local governments — like assessments used to pay for fire protection or garbage collection.
The Senate wants to plow a bunch of money into tax breaks for developers who redevelop polluted “brownfield” sites or historic properties. The House wants to hand tax breaks to companies that manufacture breast milk fortifier and to people who hire small private investigation firms.
And both chambers would prevent local governments around Florida from increasing their communications services taxes — a tax charged on cable and cell phone plans — for the next three years.
That could be good — because the CST is a pretty terrible tax. But the Legislature, urged on by telecom lobbyists, has made the CST so opaque that it’s hard to know whether savings from CST tax cuts actually make it to consumers or whether the savings just get gobbled up by companies like Comcast and Charter.
The just-plain-dumbs
Look, sales-tax holidays may sound good. But they are terrible policy.
Experts on both the right and the left agree that short-term tax holidays don’t actually save much money for consumers. That’s because stores often raise prices during them — or do less discounting than they other would.
There’s a reason that it’s always lobbyists for retailers like Target, Walmart and Home Depot urging lawmakers to hold tax holidays.
But politicians love tax holidays, because they sound good and they get a bunch of free publicity on local TV stations every time they happen.
So the House and Senate tax plans are both once again larded up with tax holidays: Two for back-to-school supplies (one in August, another in January), plus more for hurricane supplies, professional tools, and recreational supplies and public events. Nearly $500 million of the tax cuts in these tax packages are going to tax holidays.
Both chambers also included Gov. Ron DeSantis’ trollish tax break on gas stoves, which would exempt the sale of gas-fueled ranges and cooktops from sales tax for one year.
Which might be fine except that — unlike the sales tax break for energy efficient appliances — this tax break would not be limited only to household stoves. So we’re going to give tax breaks to big homebuilders and restaurant chains, just for the lols.
What to watch out for
Just before finalizing last year’s tax package, lawmakers slipped a few final special-interest goodies into the bill — like a tax break on Daytona 500 tickets sought by NASCAR.
You can probably bet that we’ll see more of that late in this year’s session, too.
What might surface?
Well, airlines like JetBlue and Southwest are lobbying to eliminate taxes on aviation fuel. Airplane manufacturers like Embraer and Bombardier want to cut taxes on the sales of new planes. Comcast and Charter are lobbying for an expensive tax break on telecom equipment. Rental-car giant Avis wants $2 million.
Somebody’s drafted a tax break for massive batteries — the kind used as backups by power companies and data centers. Someone else is shopping a sales-tax holiday on stuff purchased with virtual currency. And a big tax break for timeshare owners and developers is still lumbering around the Capitol, too.
More Floridians are in despair.