How’s that Hillsborough sales tax refund coming? Dueling plans exist

A sales tax cut for everybody or just for those with receipts? Business leaders still want money for transportation.
Mailers promoted the 2018 1% sales tax for Hillsborough County transportation that voters approved but the Florida Supreme Court later voided. How to refund the nearly $570 million escrowed from the tax is being debated in Tallahassee. TIMES (2018)
Mailers promoted the 2018 1% sales tax for Hillsborough County transportation that voters approved but the Florida Supreme Court later voided. How to refund the nearly $570 million escrowed from the tax is being debated in Tallahassee. TIMES (2018)
Published April 20|Updated April 20

The fate of nearly $570 million from a voided Hillsborough County transportation sales tax remains uncertain amid competing legislative proposals to refund the money to the public.

The Florida House of Representatives is considering a tax-cut package, HB 7063, that includes a Hillsborough-only sales tax holiday. The bill, approved unanimously last week by the House Ways and Means Committee, calls for the 7.5% sales tax rate charged by businesses in the county to be reduced 1% until the savings reach $570 million.

The Florida Senate did not include a county sales tax rebate in its tax-cut package, but its version of the state budget, SB 2500, called for a refund plan mirroring the one pitched in Gov. Ron DeSantis’ proposed budget.

The Senate plan instructs the state Department of Revenue to handle refund requests through Feb. 29, 2024, with the remainder of the unclaimed money earmarked for “transportation infrastructure projects for the county road system or the city street system within Hillsborough County.”

The differences are likely to be hashed out behind closed doors in a legislative conference committee. The Legislature is scheduled to adjourn May 5.

The Tampa Bay Partnership, a coalition of regional business leaders whose aim is improving Tampa Bay’s quality of life through research and advocacy, has its own idea: Spend the money on transportation.

“We know the power that these dollars can have in Hillsborough County, and believe that the distribution of the $570 million collected from the 2018 Hillsborough tax referendum needs to be in alignment with the wishes of the voters,” said Bemetra Simmons, CEO of the Tampa Bay Partnership.

The group sent a letter, signed by 75 top business leaders, to DeSantis on Wednesday to emphasize the same point.

“With a $13 billion backlog in transportation projects in Hillsborough County, we ardently advocate that the funds collected through the 2018 transportation referendum tax be applied in the same spirit under which they were collected: to improve transportation infrastructure in Hillsborough County,” the letter stated.

It also raises concerns about the proposed sales tax holiday, noting beneficiaries would include people from outside the state “while they use the transportation infrastructure the revenue was meant to fund.”

Some transportation tax opponents, including New Tampa resident Jim Davison of Fix Our Roads First, back the sales tax holiday.

“This is an easy way to do it. It’s a fair way to do it for the taxpayers,” said Hillsborough County Commissioner Michael Owen, who previously stumped to allocate the unspent money on widening Lithia-Pinecrest Road in his east Hillsborough commission district. “This is technically really the only reasonable way to get it back to the taxpayers.”

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The county collected the voter-approved 1% sales tax from Jan. 1, 2019, until the Florida Supreme Court ruled it illegal in February 2021 after a challenge from then-Hillsborough Commissioner Stacy White.

After the state Supreme Court decision, the commission voted to refund the escrowed proceeds. However, a circuit court judge rejected the county’s plan to allow a panel of three retired judges to review and administer the payments. Instead, Circuit Court Judge Rex M. Barbas said the Legislature should decide the fate of the unspent money.

The Tampa Bay Partnership letter cited Barbas’ ruling, saying spending the majority of the money on transportation complied with state law and his court order.

If a Legislature-approved sales tax holiday moved forward, does that mean one of the intended administrators of the 2018 transportation tax — the Hillsborough transit system, Hillsborough County, city of Tampa and two other municipalities — could have a legal case to try to recoup lost transportation dollars?

“It’s a great question. I wouldn’t advise the county to do that,” said Owen, an attorney. “I just think it’s going to be a hard mountain to climb to open up more lawsuits about this $570 million once the Legislature makes its final determination.”

The city of Tampa was non-committal.

“We expect that the funds will be distributed in compliance with the judicial order,” said Adam Smith, spokesperson for Mayor Jane Castor.

The Senate bill, specifying the money be spent on county roads and city streets, also appears to eliminate the potential for spending unclaimed money on the state highway system within Hillsborough County. That could ease earlier concerns that local officials would have no say in how the money is spent.

“We’ll just wait to be told if we have a part in that or not,” David Gwynn, Florida’s regional transportation secretary, told the Tampa Bay Times after the governor proposed his refund plan.