TAMPA — The penny on the dollar sales tax for Hillsborough County transportation officially expired Tuesday.
The state Department of Revenue instructed approximately 35,000 Hillsborough businesses to stop collecting the tax in a notice published on its web site Tuesday morning.
It means the sales tax charged on goods and services drops from 8.5 percent — what had been the highest rate in the state — to 7.5 percent.
The Florida Supreme Court declared the tax illegal in a Feb. 25 ruling that became final after nobody asked for a rehearing by the March 12 deadline. Monday afternoon, the court issued its official mandate, finalizing its order and voiding the tax.
The Department of Revenue followed Tuesday with what it calls a Tax Information Publication, telling businesses to cease the sales tax collection.
The revised 7.5 percent rate includes the 6 percent state sales tax plus the one-half percent each for schools, indigent health care and the Community Investment Tax.
“Given that the court has spoken and ruled this levy to be unconstitutional, I agree with the expeditious action of the Florida Department of Revenue ordering that is collection be ceased,” said Hillsborough Commissioner Stacy White.
White was the plaintiff in the legal challenge to the voter-approved sales tax increase. The Florida Supreme Court ruling agreed that the tax was unconstitutional because it left spending allocations up to a group of private citizens instead of elected county commissioners.
At the time of the court’s decision, the tax had generated nearly $503 million since its Jan. 1, 2019, inception. Of that, $226 million had been earmarked for transit, nearly $201 million for Hillsborough County, $60.3 for the city of Tampa, almost $6.2 million for Plant City, $4.2 million for Temple Terrace and $5 million for the Metropolitan Planning Organization for planning and development.
Tax receipts collected by businesses since Feb. 25 still must be remitted to the state for distribution back to Hillsborough County, the Department of Revenue said Tuesday.
Still to be determined is the logistics surrounding a proposed refund of the tax collections. Attorneys for Hillsborough County and the regional transit authority have said the Department of Revenue indicated further court direction may be required.
A second lawsuit that challenged the validity of the tax remains open in Hillsborough Circuit Court. It had been put on hold pending the outcome of Florida Supreme Court action and the county has filed a motion to dismiss the remaining suit.
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The Hillsborough County Commission already has started the process of putting the sales tax issue back on the November 2022 ballot. Voters approved the tax by a 57-43 margin in 2018.