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$62 million collected so far: What happens if Hillsborough's transportation tax is revoked?

Two receipts show the current Hillsborough County sales tax, which includes a 1 percent sales tax for transportation that went into effect on Jan. 1. [CHRIS URSO | Times]
Published Jun. 13

TAMPA — What if they collected a tax and never got a chance to spend it?

Who would get the money? Where would they keep it in the meantime? Are there laws about all this?

These and other questions are swirling around a ruling expected any day now on whether the one-cent transportation tax approved by Hillsborough County voters in November is valid.

That decision from Circuit Judge Rex Barbas could go a number of different ways: He could uphold the tax, or strike parts of it, or invalidate the whole thing.

His ruling will determine what happens with the $62 million and counting that's been collected in Hillsborough since residents and visitors started paying the tax on Jan. 1. The future of that money, which was intended for transportation projects throughout the county, could be in limbo if the judge decides to overturn the tax.

Barbas' decision will decide a lawsuit filed in December by County Commissioner Stacy White, who argues that the tax is inconsistent with state law and usurps power from the County Commission. Lawyers representing White and the 11 defendants — including the county, its bus agency and the cities of Tampa, Temple Terrace and Plant City — spent two days arguing the case in court last month. Barbas said May 31 that he expected to issue a ruling within two weeks.

If the losing side appeals, the case could jump to the Florida Supreme Court, where it wouldn't be heard until August at the earliest.

PREVIOUS COVERAGE:

Will Hillsborough County get to use its new transportation tax? A judge will rule soon.

Court fight starts over Hillsborough's transportation tax. The end is not in sight.

Stacy White sues Hillsborough, cities to stop voter-approved transportation tax

But for the past five-and-a-half months, every time someone in Hillsborough makes a taxable purchase — tires, cleaning supplies, clothes or the myriad other things we buy — an additional one cent on the dollar is added to that bill.

The state collects that money and sends it to the Hillsborough County Clerk of Court, who makes sure the right amount of money goes to the right agency at the right time, clerk spokesman Tom Scherberger said. The money is divided between the various agencies based on percentages outlined in the county charter amendment voters approved.

The county's transit agency receives the most money, with 45 percent being sent to the Hillsborough Area Regional Transit Authority. As of the most recent tally on May 29, the agency had received nearly $28 million.

Each entity receiving the tax money can choose how to manage its share of the revenue. The transit authority keeps all money raised from the tax in a separate account from the rest of the budget, spokesman Frank Wyszynski said. It's in an interest-bearing account with the State Board of Administration, an agency best known for managing things like the state employees pension fund and Florida's hurricane catastrophe fund.

The interest remains with the tax proceeds to ensure full accountability, Wyszynski said.

Hillsborough has received close to $25 million, the city of Tampa about $7.5 million, Plant City about $768,000 and Temple Terrace about $177,000. The county's Metropolitan Planning Organization, which oversees transportation, has received about $620,000.

That money will not be spent until next year after an independent oversight committee verifies that the suggested purchases fall within areas outlined in the charter amendment.

But if White's suit is successful and the tax is overturned, then it will be up to Barbas, the circuit court judge, to decide what happens with the money.

"I don't know how you take it and disburse it back to people who bought their groceries or whatever," said Hillsborough Deputy Comptroller Tim Simon. "It seems like, logistically, that would be impossible."

In situations like this, the money is usually placed in the registry of the court, which would determine if and how the funds are dispersed, said Tampa City Attorney Salvatore Territo.

"It is difficult, if not impossible, to determine who paid the tax, and how much they paid," Territo wrote in an email to the Times.

But lawyer Ron Weaver, who closely monitors transportation issues in Tampa Bay, said there is a way — and it would involve people filling out sworn affidavits at every store where they made a purchase since Jan. 1.

Each store would have an affidavit available for customers to fill out saying that they made a purchase of a certain value in 2019. That affidavit could include receipts or credit card records, or not. It could be notarized, or not. It would be up to a reviewer with the state to evaluate "whether the affidavits were fishy, valid or just someone trying to make 100 bucks," Weaver said.

Anyone seeking a refund would have to fill out a different affidavit for every store they bought items from this year.

Such a refund scenario would be highly unlikely, Weaver said, and would only happen in "the extraordinary situation" where the court determines the only appropriate outcome is a refund. The process has been used in similar situations where the distribution of already collected tax money is in question.

"It would be quite a nightmare, but if the court insisted on that remedy, then it wouldn't mind if it was a bureaucratic nightmare or not," Weaver said.

Money that isn't claimed in the process would either default to the state or be kept within Hillsborough County. That decision is up to the judge, who could determine that the money be spent on transportation projects within the county, as was the original intent.

"You're talking about millions of people and millions of transactions," said lawyer Brian Willis, a member of All For Transportation, the advocacy group that put the tax on the ballot. "Any tax collected needs to be spent on transportation since refunds are not practical."

RELATED: Sales tax snafu means $624,000 is headed to Pasco County

Pasco County provided an example just earlier this year of a perhaps more likely scenario for the money. The state sent $624,000 to the county in March after 33 businesses were incorrectly logged as being in Hillsborough and charged the wrong sales tax as a result.

Instead of refunding individual people, the state sent the money directly to the county.

Contact Caitlin Johnston at cjohnston@tampabay.com or (727) 893-8779. Follow @cljohnst.

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