Florida, Massachusetts, and Wisconsin closer to offering 2018 sales tax holidays

Update 3.29.2018: Gov. Scott has signed Florida House Bill 7087. The two sales tax holidays are a go.

Fifteen states are known to be offering sales tax holidays in 2018. Three states — Florida, Massachusetts, and Wisconsin — are considering them.

Florida

Last fall, Florida Governor Rick Scott called for one 10-day back-to-school sales tax holiday and three one-week disaster preparedness sales tax holidays. Senate Bill 686 sought to establish the 10-day back-to-school sales tax holiday but died March 10 in the Appropriations Subcommittee on Finance and Tax.

However, on March 11, the Florida Senate passed House Bill 7087. It establishes two sales tax holidays in 2018: a disaster preparedness sales tax holiday June 1–7, 2018, and a back-to-school sales tax holiday August 3–5, 2018.

The disaster preparedness holiday would exempt numerous items that would help during a disaster, including:

• Certain batteries selling for $30 or less
• Food storage coolers (non-electric) selling for $30 or less
• Gas or diesel fuel tanks selling for $25 or less
• Ground anchor systems or tie-down kits selling for $50 or less
• Portable generators selling for $750 or less
• Portable, self-powered light sources selling for $20 or less
• Portable, self-powered radios, two-way radios, or weather band radios selling for $50 or less
• Reusable ice selling for $10 or less
• Tarpaulin or other flexible waterproof sheeting selling for $50 or less

The back-to-school sales tax holiday would exempt the following:

• Clothing, wallets, or bags selling for $60 or less
• School supplies selling for $15 or less

Participation in the back-to-school holiday would not be mandatory for dealers if less than 5 percent of their gross sales of tangible personal property in the prior year would qualify for the sales tax holiday. Dealers electing not to participate would have to notify the Florida Department of Revenue, in writing, by August 1, 2018, and post a copy of that notice “in a conspicuous location at its place of business.”

The bill also exempts “any equipment to generate emergency electricity at a nursing home facility,” provided it’s purchased between July 1, 2018, and December 31, 2018. Additional details are available in HB 7087.

Massachusetts

The Bay State has offered tax-free periods in the past, but it’s never made them a guaranteed annual event and it didn’t provide one in 2016 or 2017. This year, as last, Governor Charlie Baker is calling for a permanent sales tax holiday. The current proposal is part of An Act Enhancing Opportunities for All (H.4297), which the administration filed March 9.

Administration and Finance Secretary Michael J. Heffernan says, “A permanent sales tax holiday will … foster economic growth for our local businesses in each community across the Commonwealth.” According to a gubernatorial press release, a permanent tax-free period would give more predictability to residents, businesses, and fiscal planners.

In addition to creating a permanent sales tax holiday, the measure requires the Commissioner of Revenue to tell the comptroller “the amount of sales tax forgone” by the end of each year. Additional details are available in H.4297.

Wisconsin

Earlier this year, Governor Scott Walker called for a broad tax-free period that would exempt most retail “off the shelf” goods with a sales price of $100 or less. This was approved by the Assembly on February 22 in Assembly Bill 944.

The Senate then approved a narrower holiday in Senate Bill 799. Under the Senate version, the sales tax exemption would apply only to certain items meeting certain price restrictions:

• Clothing (suitable for general use) and certain accessories and equipment with a sales price of less than $75
• Computers with a sales price of less than $750
• Computer supplies with a sales price of less than $250
• School supplies with a sales price of less than $75

The Assembly must now approve these changes in order for the measure to make it to the governor’s desk.

Learn more about 2018 sales tax holidays and how they can complicate sales tax compliance for businesses here.