Monday, the Florida Legislature passed a $429-million tax-cut package that among other things will lower cell phone and cable taxes for Florida taxpayers. Though a debate over Medicaid expansion and proposals on higher health care spending resulted in a special budget session, the tax relief package passed the Senate by a vote of 34-2 and the House by a margin of 91-2.
Governor Rick Scott pushed for nearly $700 million in tax cuts this year with his “Keep Florida Working” annual budget, but he applauded the legislature’s smaller plan in a statement yesterday afternoon:
“Florida’s budget had an over $1 billion budget surplus this year because of the hard work of Floridians, and this tax cut package will send more than $400 million back to the people who earned it. I applaud the Florida House and the Florida Senate for their work on this legislation and I look forward to working with them to keep cutting taxes next year and to keep Florida working.”
The largest component of the tax package involved a reduction of the Communications Services Tax (CST). Currently, Florida has the fourth highest CST rate in the country with a total tax bite of 22.38 percent when you consider all levels of government that tax wireless services (including federal).
Communication services like cell phones and satellite television are subjected to a myriad of taxes, including a state tax and gross receipts tax, local communications services taxes, 911 operator fees, and a federal Universal Services Fund tax.
The CST cut passed by the legislature will permanently reduce the state portion of cell phone and satellite taxes by 0.9 percent to 5.75 percent on cell phones and to 9.9 percent on direct-to-home satellite services. It also temporarily reduces both taxes by another 0.9 percent through 2017.
Gov. Scott sought a permanent 3.6 percent CST reduction and the legislature met him half way, at least for two years.
The bill doesn’t only lower a $100 cell phone bill by $1.73 a month; it includes a number of other smaller tax cuts and exemptions as well.
- New 10 day back-to-school sales tax holiday
- Exempts college textbooks from the sales tax for one year
- Adds irrigation equipment to a list of farm supplies that are exempt from sales tax
- Exempts gun club memberships from the sales tax permanently
- Caps boat repair taxes at $60,000
- Exempts food and drinks sold by school support organizations like booster clubs from the sales tax after they’ve been purchased, before resale
- Increases corporate income tax credits for one year for companies who clean up the Brownfields (polluted area of land)
- Corporate income tax credits of up to 10 percent for R&D
- Sales tax exemption for aviation fuel at flight schools and colleges
- Prolongs life of Florida Enterprise Zones, which were set to expire this year, by 3 more years
The governor is expected to sign the $429 million tax relief package this week, bringing the total size of tax cuts signed by Gov. Rick Scott to more than $2.6 billion.