DeSantis wants Hillsborough to refund sales taxes. How would that work?

There is a rhetorical question being posed around Gov. Ron DeSantis’ plan for public refunds of the $570 million collected from Hillsborough County’s transportation sales tax that later was ruled unconstitutional.

Who keeps receipts?

It’s been stated in Leon County Circuit Court where, last month, a judge dismissed a class-action lawsuit from Robert Emerson of Apollo Beach that sought a refund of the taxes collected.

Emerson “doesn’t even know how much money he’s owed himself, much less anyone else that was charged this unless they have receipts in hand, which, as we all know, most people don’t have those receipts,” said David Caldevilla, attorney for Hillsborough County Clerk of Court and Comptroller Cindy Stuart, one of the defendants in the lawsuit.

There wasn’t much dispute over Caldevilla’s argument.

“I don’t think anyone would have every sales slip. We’re talking three years ago now,” Emerson acknowledged to the Tampa Bay Times on Thursday.

The question also has been asked at Hillsborough County Center, where commissioners are poised to finalize a list of transportation projects they’d like financed with whatever is left over after a refund is completed in 2024.

“A refund, I think, is difficult. Who keeps receipts?” said Commissioner Joshua Wostal, who owns a UPS store in Carrollwood. “I can tell you I hand out very few receipts to individuals in my small business. ‘You need a receipt?’ “Nope.’”

DeSantis ordered the refund in his proposed state budget for the coming year. If the Legislature agrees, the state Department of Revenue is charged with retaining a third-party administrator to manage the refund process. Requests would be due from people who think they’re owed money by Feb. 29, 2024, and be completed by April 1, 2024. Whatever remains would be earmarked for transportation projects within Hillsborough County.

So how much might be refunded to the public? Nobody seems sure. Hillsborough County Commission chairperson Ken Hagan said the number of $150 million has been kicked around, but he couldn’t verify the accuracy of the estimate.

How might the refund process work? The Department of Revenue isn’t speculating publicly.

The department “administers laws passed by the Legislature and signed by the governor. The department does not comment on potential or pending legislation to the media,” Bethany Wester, the department’s communications director, wrote in an email to the Times.

After the Florida Supreme Court ruled the voter-approved sales tax unconstitutional in February 2021, some immediate speculation centered upon a possible Hillsborough-only sales tax holiday to refund the money collected and escrowed since Jan. 1, 2019. The idea required legislative action in Tallahassee that never materialized.

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“The tax holiday seems like the most holistic way to do it, but does that provide restitution to the individual who had big-purchase items during that time period?” said Wostal.

Hillsborough County’s own proposal to set up a three-judge panel to review refund requests failed to muster support from Hillsborough Circuit Judge Rex Barbas, who heard the initial legal challenge to the tax from then-Commissioner Stacy White.

White said in a text message Thursday that he is “inclined to support a sales tax holiday in Hillsborough County as a way to repay the taxpayers.”

Asking the state for a sales tax refund is not uncommon. For instance, an audit may show overpayment by a business, or a tax-exempt charity may have been charged the sales tax incorrectly. The Department of Revenue includes the appropriate forms and instructions on its website. Last year, the department received 11,441 requests for sales tax adjustments, up from 8,751 in 2021. An important point: Applicants have to provide the documentation that they paid the tax.

The department also allows the public to establish a refund amount by conducting a statistical sample of their records. That method, however, appears to be too complex.

It “is rarely filed, and to our knowledge, the department has not received one for more than a decade,” said Wester.

The largest beneficiaries of a refund could be businesses. Under state law, the 1% local tax was assessed only on the first $5,000 of a single purchase. It means the largest refund to a consumer for an individual purchase is $50. Businesses paying to lease commercial space in Hillsborough, however, were charged the tax for 26 months.

Wostal, for instance, wasn’t aware of the sales tax assessment until he checked his business’s lease records after an inquiry from the Times. He estimated he’s due a refund of several thousand dollars.

“Oh, yeah. It is in there,” said Wostal. “You have raised an excellent point that I hadn’t considered. You’re going to be a popular person for how many business owners you helped with that.”