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$121 million in tax breaks: Shopping holidays, Hurricane Michael expenses, commercial leases

Controversial giveaways involving charter schools and hospitals were stripped out of a tax package set for a vote today.
The remains of destroyed structures continue to littler the beach side of US Hwy 98 in Mexico Beach, five months after Hurricane Michael made landfall in the small coastal community. (DOUGLAS R. CLIFFORD | Times) [DOUGLAS R. CLIFFORD | Tampa Bay Times]
Published May 3
Updated Oct. 9

Refunds on farm repairs and fuel used in hauling debris from Hurricane Michael have replaced controversial proposals involving charter schools and hospitals in a tax-relief package ready for Senate approval.

The amended package, which also would need House approval before the legislative session ends this week, includes popular sales-tax “holidays” on back-to-school items and for hurricane preparation, along with a business-backed reduction in a sales tax on commercial leases.

The Senate on Thursday amended a House tax package (HB 7123), stripping a proposal that would have changed guidelines for hospitals to qualify for a charitable tax exemption, a proposal that hospital officials contended would result in “devastating funding losses.”

Also, the Senate stripped a controversial House proposal that would have included charter schools in the distribution of increased property-tax money raised through local referendums. Such referendums have been approved in about 20 counties, and critics of the House proposal argued that some of the local referendums were designed to help traditional public schools, not charter schools.

Sen. Kelli Stargel, a Lakeland Republican who has led Senate efforts on the tax package, said she supported the House’s charter school proposal. However, she said Senate eliminated it because Democrats had raised “strong” objections.

“I think we run into uncharted territory when we start letting local governments pick and choose referendums of public dollars to pick and choose public entities and how they get them,” Stargel said after a morning Senate session. “Where does that end when you start opening up that door? That was my concern overall, and the position I originally took. But we had members that were in strong opposition.”

Stargel said she hadn’t discussed the change with House leaders.

The Senate is expected to vote Friday on the package, which Stargel said is now valued at $121 million. Legislative budget leaders had earlier said the tax package would total $90 million. The House proposed $102.4 million in cuts.

The Senate proposal includes tax changes stemming from Hurricane Michael, which caused massive damage in October in Northwest Florida.

The proposal would provide refunds on taxes paid for fuel used between Oct. 10, 2018 and June 30, 2019 for agricultural shipments and to haul debris created by Hurricane Michael in Okaloosa, Walton, Holmes, Washington, Bay, Jackson, Calhoun, Gulf, Gadsden, Liberty, Franklin, Leon and Wakulla counties. Farmers could also get refunds on taxes for repairs made to farm buildings and fencing damaged by the storm.

Like the House, the Senate supports providing a seven-day holiday at the start of this year’s hurricane season to allow residents to avoid paying sales taxes on supplies ranging from batteries and tarps to self-powered radios and generators. The holiday would be held from May 31 through June 6, as hurricane season starts June 1.

Meanwhile, the Senate would offer a five-day sales tax holiday to help families prepare for next school year. The House had proposed a three-day back-to-school holiday.

The Senate’s proposed holiday would last from Aug. 2 through Aug. 6 and would provide a sales-tax exemption on clothes costing $60 or less, school supplies costing $15 or less and personal computers costing $1,000 or less.

Business groups, meanwhile, have long lobbied to reduce the sales tax on commercial leases. The Senate proposal would lower the lease-tax rate from 5.7 percent to 5.5 percent. The House has wanted to reduce it to 5.35 percent.

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