The $500 Million Tax Cut Goal
This year the Governor has asked the Legislature to cut $500 million in taxes and fees for Floridians. The legislature has to decide what should be cut and how much. A number of current taxes and fees have been proposed. Here’s some of them, as well as their current financial impact on Floridians:
- Communications Services Tax – This tax applies to every communications device you have, cable, home phone, internet, cell phone. On cable and phone service the combo of two taxes is 9.17% but on satellite service it is 13.32%. This tax collected $1.4 billion in 2012-13.
- Fees on Vehicle Registrations & Drivers Licenses - These fees were increased in 2009 to help cover the budget shortfall the state was facing. There have been multiple proposals to roll it back to the pre-2009 rates. These fees collected $225 million in 2012-13.
- Sales Tax on Commercial Leases - Florida is the only state that levees a tax on commercial leases, bringing in $2 billion in 2012-13. This year a bill has already been filed that would decrease the current 6% tax by 1% per year, providing $200 million in savings to Florida’s businesses.
- Premium Tax on Health Insurance Policies – The National Federation of Independent Business (NFIB) has proposed a reduction or elimination of this tax, pointing out the the state could lessen the burden on employers created by increased taxes on health insurance policies caused by the President’s Healthcare Law. Currently there is a 1.75% premium tax on insurance policies that brings in $100 million a year for the state – a tax the NFIB rightly points out is charged to insurance companies but directly passed on to consumers.
- Supplemental Corporate Fee - The NFIB has also proposed that this fee, created in 1992 for the sole purpose of collecting revenue, be eliminated. It costs Florida businesses $66 million a year.
- Sales Tax Holidays - This is a popular legislative proposal and on that will surely gain traction this year, since nearly half of the expected surplus this year will be non-recurring (revenue that will not be expected again next year). Sales Tax Holidays allow the legislature to issue a one-time tax break rather than cutting a reoccurring tax that would impact state revenue collections in future years. Unfortunately, Sales Tax Holidays are just a political gimmick and only serve to avoid broader tax cuts. Read our Need to Know on Sales Tax Holidays here.