House pitches nearly $300-million in tax cuts
TALLAHASSEE (NSF) - A wide-ranging $296.8 million tax cut package from the House would eliminate sales taxes on diapers and feminine hygiene products, offer tax "holidays" for purchasing school and hurricane supplies and trim a commercial lease tax.
The package, introduced Wednesday by the House Ways & Means Committee, is smaller than a collection of tax cuts proposed by Gov. Rick Scott. The fate of the proposals will depend on upcoming budget negotiations between the House and Senate.
Ways & Means Chairman Jim Boyd, R-Bradenton Republican, said the House package would provide multi-year relief that could potentially reach $949 million and grow to $2.2 billion when added to a House measure being introduced next week that would ask voters to increase the homestead exemption for property taxes.
A similar homestead-exemption proposal in the Senate (SJR 1774) has been approved by one committee.
Boyd, whose committee will vote on the House tax-cut package and homestead-exemption proposals next week, estimated that, if approved, the homestead change would save property owners $170 a year on average.
Rep. Joe Geller, D-Aventura, called the cuts "targeted" to individuals and small businesses.
"It didn't look to me like there was anything that was a giveaway to people who didn't need it," Geller said.
Last month, Boyd called Scott's proposed $618.4 million tax-cut package "a little ambitious," with other lawmakers saying the governor's proposal favored corporations over individual Floridians.
"I also said I hoped he was right," Boyd said after the House tax package was announced. "As we looked through the math, and figured out where we've been able to cut spending in the House, we've been able to do some other things that allowed us to give more money back to taxpayers. So I'm excited his tax plan was a little ambitious."
Scott's proposal features a reduction in a tax on commercial leases, an increased corporate-income tax exemption and a number of sales-tax holidays for consumers.
The House package, announced as House subcommittees this week rolled out proposed reductions in state spending for the fiscal year that begins July 1, includes a temporary 1.5 percentage-point drop in the commercial rent tax. That tax rate is currently 6 percent.
The reduction wouldn't begin until Jan. 1, 2018, but it quickly drew praise from business lobbying groups Associated Industries of Florida and the Florida Chamber of Commerce. It is projected to save business owners $190.7 million next fiscal year.
The rate would go to 5.5 percent in January 2020, a mark intended to be permanent.
The Senate has proposed (SB 378) reducing the rent tax by 1 percentage point but has linked it with a controversial plan to eliminate an insurance-industry tax credit.
For most Floridians, the biggest impacts from the House proposal would be the tax "holidays" and elimination of sales taxes on baby and adult diapers and feminine hygiene products such as tampons, sanitary napkins and panty liners.
Lifting taxes on diapers and tampons --- which would begin Jan. 1--- is projected to cut revenue by $27.4 million next fiscal year, with the total growing to $65.2 million a year.
Senate committees have backed bills this year that would lift taxes on diapers and tampons.
The tax-holiday proposals include lifting state sales taxes for 10 days in August on school supplies, clothing and the first $1,000 on personal computers and related accessories. Also, a tax holiday would be provided for nine days just before the 2017 hurricane season on self-powered lights, self-powered radios, tarpaulins, first-aid kits, battery packs and generators.
The back-to-school holiday is projected to reduce state sales tax revenues by $70.3 million, while the hurricane shopping period would cut revenue by $6.7 million.
Another holiday, on Veterans Day, would lift sales taxes on clothes and footwear for people who provide proof of being honorably discharged U.S. military veterans. The savings is projected at $1.7 million.
Backing a request from Scott, the House is pitching a one-year tax exemption on college textbooks and instructional materials, which is projected to provide $41.8 million in savings.
The package also includes a numbers of smaller tax changes and reductions.
Last year, Scott sought more than $1 billion in tax cuts, but legislators facing diminishing revenue projections agreed on a package that totaled $129 million, which included a Scott priority to eliminate a sales tax on manufacturing equipment.