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Hillsborough sales tax refund pitched to court

Lawyers suggest the public apply for reimbursements and a three-judge panel would be the arbitrator.
Government lawyers are suggesting a plan to reimburse the public for the penny on the dollar sales tax paid for 27 months before the Florida Supreme Court ruled it unconstitutional.   TIMES (2018)
Government lawyers are suggesting a plan to reimburse the public for the penny on the dollar sales tax paid for 27 months before the Florida Supreme Court ruled it unconstitutional. TIMES (2018)
Published May 10
Updated May 10

TAMPA — People seeking reimbursement of the transportation sales tax collected by Hillsborough County businesses should file written refund applications with the court, with a final determination to be made by a panel of three retired circuit court judges, according to a plan from government lawyers.

The proposal is contained in a motion filed April 29 with Hillsborough Circuit Court Judge Rex Barbas by attorneys representing Hillsborough County, the Hillsborough Area Regional Transit Authority, the cities of Tampa and Plant City, and Clerk of the Circuit Court Cindy Stewart. They are seeking guidance on how to refund the more than $500 million collected by a penny-on-the-dollar sales tax collected for 27 months.

Their plan “will allow refunds to be sought and determined in an effective and expeditious manner, with minimal burden and no cost to taxpayers, as well as the judicial system,” the motion states.

Voters approved the sales tax for transportation in November 2018, and it produced nearly $503 million before the Florida Supreme Court ruled in February that it was unconstitutional. The court decision came in a case from Hillsborough Commissioner Stacy White, who said elected commissioners, not a citizens committee that advocated for the referendum, retained the authority to allocate sales tax proceeds. By mid-April, the unspent sales tax revenue totaled more than $521 million, according to the clerk’s office.

To return the money to those who paid it, the motion asks Barbas to appoint a panel of three retired judges to oversee the disbursement. It specifically asks the court to name former Chief Judge Manuel Menendez, who served from 1984 to 2015, and former Judges William P. Levens and Herbert M. Berkowitz, both of whom served on the bench for 17 years, to comprise the panel. Each has agreed to do the work pro bono, according to the motion.

People wanting a refund would have 120 days to complete a claim application to be considered by the judicial panel. By applying, the motion states, “the taxpayer knowingly, voluntarily, and irrevocably agrees to subject the claim to final and binding determination under the procedure, and releases all causes of action against the governments relating to payment of the tax or a refund, and waives the right to judicial determination of the claim.”

That means people couldn’t dispute the ruling from the judicial panel, nor file suit against the local government agencies if they didn’t like the outcome. The motion makes no mention of what would happen to unclaimed funds.

Related: Hillsborough commission: We'll give back sales tax money

White criticized the proposal.

“This process looks an awful lot like it is designed to return as little of the money to the taxpayers as possible and appears to be an attempt at a money grab by the local agencies,” he said Monday. “Parties in possession of funds that do no belong to them should not be devising a plan for the refund of those funds.”

He suggested the Florida Department of Revenue could handle the process.

Related: Hillsborough judge says he will consider sales tax refund options

If Barbas sets the refund procedures, it could supersede a separate challenge to the sales tax from Apollo Beach resident Robert Emerson. Emerson filed suits, seeking class action status, in both Hillsborough and Leon counties.

At least one Hillsborough commissioner, Kimberly Overman, has expressed concern publicly that a class action suit could enrich the law firms administering the refunds, leaving less for the public who paid the sales tax.

All for Transportation, the citizens group that championed the referendum, offered similar sentiment Monday.

“Hillsborough County is doing the right thing by preparing a fair and expedient refund process,,” said Christina Barker, co-founder of All for Transportation. “This will help prevent a class action lawsuit which would only lead to large payouts to attorneys and zero benefit to the community.“

The unclaimed money, she said, still should be earmarked for transportation.

“We fully expect all unclaimed dollars to be spent as voters intended — funding road, safety and transit improvements throughout the county. There is absolutely no justification for spending them any other way,” Barker said in a text message to the Tampa Bay Times.

Hillsborough commissioners already have started the process of preparing a ballot referendum for November 2022 to allow voters to again consider a sales tax dedicated to transportation.