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Judge rejects Hillsborough sales tax refund plan

The ruling sets the stage for state lawmakers to distribute the money for transportation projects.
Mailers promoted a one-cent sales tax for Hillsborough County residents to fund transportation projects. On Friday, a circuit judge rejected a county plan for refunding the tax.
Mailers promoted a one-cent sales tax for Hillsborough County residents to fund transportation projects. On Friday, a circuit judge rejected a county plan for refunding the tax. [ Times (2018) ]
Published Mar. 25|Updated Mar. 25

TAMPA — A circuit court judge Friday rejected Hillsborough County’s pitch to refund $562 million collected from a transportation sales tax voided by the Florida Supreme Court.

Circuit Judge Rex M. Barbas denied the county’s motion to set up a panel of three retired judges to oversee public applications for refunds, saying “there is no clear legal basis from which to fashion a remedy for the collection of the invalidated sales tax.”

The voter-approved 1 percent sales tax was in effect for 26 months before the state Supreme Court ruled it unconstitutional more than a year ago. The proceeds have been escrowed, and Hillsborough Circuit Court Clerk Cindy Stuart said this week the total had reached $562 million, including $80 million collected after the state Supreme Court ruling in February 2021.

“While the government parties’ efforts to fashion a distribution method for the unlawfully collected surtax funds is appreciated, the court finds that this is not the appropriate forum for determining and managing such a remedy,” the ruling stated.

Barbas heard arguments on the case in June 2021 and acknowledged then that he was “not really satisfied with what I’ve seen with the (refund) mechanism.” One of the other suggestions had been a Hillsborough-specific, temporary sales tax holiday. That idea, however, required legislation in Tallahassee that never materialized.

The Florida Legislature did, however, add a provision to the upcoming state budget forwarding the money to a legislative budget conference for disbursement toward transportation projects.

Barbas’ ruling said the Legislature “is likely in the best position to address the issue.” Essentially, it means elected lawmakers, not the courts, will oversee how the money is spent.

Related: Hillsborough's disputed sales tax refund inches toward compromise

Still to be determined is the effect of a second lawsuit over the refund process filed in Leon Circuit Court.

Barbas’ ruling came on a motion from the county related to Hillsborough Commissioner Stacy White’s original challenge to the sales tax. White argued the tax was unconstitutional because spending allocations were determined by referendum language rather than by elected county commissioners. After the state Supreme Court agreed and voided the tax, the county, the Hillsborough Area Regional Transit Authority, and the cities of Tampa and Plant City asked Barbas for so-called “post judgment supplemental relief” to address the question of refunds.

White had criticized the county refund plan as a money grab that would leave more money for transportation spending because of the complicated application process. He had suggested the since-discarded local sales tax holiday.

White declined comment Friday afternoon, saying he wanted to be sure of all the ruling’s implications before addressing it.

All for Transportation, the citizens group that advocated for the sales tax referendum, credited the Legislature for stepping into the fray.

“Given today’s ruling from Judge Barbas, we are grateful for the Legislature’s foresight in crafting a fair and reasonable remedy to the lawsuit. Transportation remains a critical issue for our community and closing this chapter is a step in the right direction,” Christina Barker, co-founder of All for Transportation, said in a text message.

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