Tuesday, January 16, 2018

Here are millions in tax cuts that Florida lawmakers are considering. Do any save you money?

TALLAHASSEE —Tax cuts are coming. Again.

For the past two decades, the Florida Legislature has slashed taxes almost every year. The pricey ritual is justified by lawmakers as a way to stimulate the economy.

What remains unclear is how much this year's cuts will cost and who stands to benefit.

"There's a lot of things on the table," said Sen. Kelli Stargel, R-Lakeland, who heads the Senate's tax plan.

Gov. Rick Scott has proposed $618 million in tax cuts. The House proposes $2.2 billion. Although the Senate hasn't unveiled its plan, it has indicated it will offer fewer cuts.

Ultimately, the legislators must agree on one plan and get Scott to sign on.

Here's a glance at what legislators are considering:

Business rent taxes

Florida is the only state that charges this tax, a 6 percent sales tax on businesses when they rent office space. The House has proposed cutting that tax to 4.5 percent for the next two years then moving it back up to 5.5 percent.

The skinny: Politicians get to claim they are cutting taxes on small businesses that are paying rent to commercial property landlords. Sure, the little guys get a break, but the real winners are big chain stores that rent a lot of space, like grocers and box retailers, who will save millions in state taxes. The Florida Chamber of Commerce and Associated Industries of Florida have made this a top priority. This could put future legislators in a bind. If legislators allow the tax to jump back to 5.5 percent in 2020, they could face charges that they favored a giant tax increase. If they keep it at 4.5 percent, they risk the continued loss of revenue, hurting efforts to balance the budget.

Tax revenue loss: $454 million.

Property tax cut

The Florida House has proposed decreasing property tax rates to offset a rise in home values that will cause many homeowners to pay more in taxes.

The skinny: Scott and Senate President Joe Negron have been willing to use those increased revenues in their budget proposals, insisting the increase in home values is not the same as a tax increase. But House Speaker Richard Corcoran has called it a type of tax increase. He has declared "hell no" to using the extra property tax collections to balance the budget and wants it returned as tax cuts.

Tax revenue loss: $510 million annually to local government.

Property tax exemption

The House wants to put an additional $25,000 homestead exemption on the 2018 ballot. The plan would increase the overall exemption up to $75,000 on the first $100,000, but it wouldn't apply to school tax assessments. Hillsborough and Pinellas home­owners would save about $310 a year.

The skinny: Local governments say the Legislature is shifting the tax burden by forcing counties and cities to reduce tax revenues. Either they'll cut services or have to increase tax rates to make up for the deficits. Hillsborough County would lose at least $23 million, Pinellas County $18 million and Pasco $12 million under the plan.

Tax revenue loss: $753 million annually to local governments.

Sales tax shopping holidays

For seven straight years, the Legislature has voted to eliminate the sales tax in limited back-to-school shopping. This year, the House wants to suspend the sales taxes on clothing, footwear and backpacks that are $100 or less for 10 days.

The skinny: Saving families 6 to 7 cents on every dollar for school supplies is small, but politicians love this cut because they can claim it helps middle-class and low-income families pay for school supplies. The Institute on Taxation and Economic Policy, however, calls this type of tax cut "political gimmicks." Wealthier families benefit more because they spend more and are often better positioned to time their purchases to take advantage of the discounts.

Tax revenue loss: $56 million.

Disaster preparedness sales tax holiday

The House has proposed cutting sales taxes for nine days on disaster preparedness equipment, like flashlights, tarps, weather radios and portable generators.

The skinny: Timed for the start of the hurricane season, the tax cut also serves as a reminder to homeowners to stock up.

Tax revenue loss: $5.3 million.

Veterans' tax holiday

Exempts sales taxes on clothing and footwear $60 or less for honorably discharged veterans on Nov. 11 each year.

The skinny: This tax cut would occur every year in the House plan and gives lawmakers a chance to claim they are standing up for veterans.

Tax revenue loss: $1.4 million annually.

Diaper tax

Florida exempts baby formula and baby food from sales taxes, but lawmakers want to exempt baby diapers and adult diapers from the taxes, as well.

The skinny: Another key tax cut to show the Legislature is trying to help families with young children. Lawmakers have argued diapers are a clear necessity that families cannot avoid and that they deserve a break.

Tax revenue loss: $43 million annually.

Feminine hygiene

From 1977 to 1986, Florida did not charge sales taxes on tampons, sanitary napkins, panty liners and menstrual cups. But in 1986, that exemption was repealed. Under House and Senate plans, the state would once again eliminate sales taxes on those products.

The skinny: This proposal follows a class-action lawsuit started by a Tampa Bay area woman who has challenged the fairness of feminine hygiene products being subject to sales taxes when other products like bunion pads, lip balms, wart removers or male pattern baldness treatments are not.

Tax revenue loss: $8.9 million annually.

College textbooks

The state would eliminate sales taxes for college textbooks but only if students show a course syllabus indicating the textbook is required.

The skinny: The Legislature eliminated this tax in 2015, but it was restored in 2016. If it passes this year, it would be good from July 1 until June 30, 2018.

Tax revenue loss: $33 million.

Agriculture-related products

Expands sales tax exemptions to cover more expenses related to agriculture.

The skinny: Florida already exempts dozens of products for the agriculture industry from sales taxes. New exemptions would include hog wire and nylon mesh for protecting farms from predatory animals; barbed wire for beef or cattle farms; compressed or liquefied oxygen for aquaculture operations; and animal health products for livestock and poultry, like vaccines and antiseptics.

Tax revenue loss: $10.9 million annually.

Admissions resales

Eliminates sales taxes charged on donated tickets to amusement parks, concerts and sporting events when given to a nonprofit.

The skinny: Currently, the state charges those venues and resellers sales taxes even when tickets are given as charitable donations through nonprofit groups.

Tax revenue loss: $2.4 million annually.

Corporate income tax cuts

Increases corporate income tax credits for select businesses.

The skinny: Under a House plan, the state would set aside $20 million for research and development tax credits that companies can use to lower their corporate income taxes. The state has a $9 million cap currently. Also, the House proposes increasing credits to companies that clean up contaminated land from $5 million a year to a total of $20 million next year.

Tax revenue loss: $26 million.

Contact Jeremy Wallace at [email protected] Follow @JeremySWallace

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