Senate gives up on tax exemption repeals
TALLAHASSEE (AP) – The Florida Senate is giving up on trying to repeal sales tax exemptions due to resistance from the House and a desire to focus on other revenue-raising proposals including a cigarette tax increase, the chamber’s finance and tax chairman said Monday.
Exemptions on such necessities as food and medicine are considered untouchable, but lawmakers long have talked about lifting those on a variety of other purchases such as bottled water, charter fishing, Super Bowl tickets and college stadium skyboxes.
Finance and Tax Chairman Thad Altman, R-Viera, told his committee he’s dropping the issue this year. Later, Altman said he wasn’t sure if it would come up next year either because lawmakers might be better off considering less divisive revenue sources.
Every time the matter comes up, business lobbyists line up to defend exemptions on items their clients either sell or purchase.
“We felt that it would be best that we focus on what we may be able to achieve for meeting the state’s needs – financial needs – and not wasting time on something we knew wouldn’t happen,” Altman said, citing the cool reception exemption repeals have gotten in the House.
Both chambers are controlled by tax-averse Republicans, but Senate GOP leaders including Altman have loosened their stance because the state is facing a potential $6 billion revenue shortfall in the next budget year that begins July 1.
Lawmakers are counting on federal stimulus money to fill about half of that gap. Both chambers have included spending cuts and fee increases on everything from driver licenses to court filings in their budget plans, but the Senate also is considering three major revenue enhancements.
The first would increase taxes on cigarettes and small cigars by $1 a pack and $1 per ounce for other tobacco products. The other legislation is designed to close loopholes in corporate and real estate transaction taxes.
That doesn’t leave sufficient time, with the 60-day legislative session half over, to deal with such a complex issue as sales tax exemptions, Altman said.
“They affect a lot of different groups. They potentially could be controversial,” Altman said. “I hope we continue to look, but the vast majority of those are legitimate exemptions.”
The state gives up billions of dollars in potential revenue through the exemptions, but Altman said he’s been able to identify no more than $250 million worth that might be ripe for repeal.
Democrats who generally support repealing some exemptions said Altman’s decision was more a matter of will than time.
“Some people just feel like they might be defeated in the next election if they have any kind of tax proposals on the agenda,” said Senate Democratic Leader Al Lawson of Tallahassee.
“We have been talking about this for years,” said Sen. Nan Rich, D-Weston. “How complicated can it be?”
Former Senate President John McKay, a Republican, has been trying since 2002 to force the Legislature to repeal exemptions that aren’t in the public interest. Lawmakers that year put a proposed state constitutional amendment on the ballot that would have let a committee of 12 lawmakers review exemptions. The Florida Supreme Court removed it, ruling the proposal was an excessive delegation of the Legislature’s power.