Florida’s newest surprising sales tax holiday idea — Wacky Tax Wednesday

Florida has developed a taste for unusual sales tax holidays in recent years, but the state’s latest proposal may take the cake. Senate Bill 352 and House Bill 369 would establish a virtual currency sales tax holiday.

If either bill becomes law, Florida sales tax wouldn’t apply to normally taxable retail sales of tangible personal property or services from June 1, 2025, through July 31, 2025, provided:

  1. Payment is made in virtual currency, and
  2. The sale is made by any of the following establishments in Florida: 

- A bar or nightclub 

- A barbershop, spa, qualifying cosmetology salon, or specialty salon

- A qualifying food service establishment

- A convenience store

- A grocery store

- A retail service station that sells motor fuels or special fuels to the public and is classified under the North American Industry Classification System (NAICS) code 45712

SB 352 and HB 369 spark questions: Why offer a virtual currency sales tax holiday in the first place? Why temporarily exempt only sales by the businesses listed above? Why were those lucky ducks selected over others?

Why offer a virtual currency sales tax holiday?

To understand why Florida would create a virtual currency sales tax holiday, it helps to review why states offer sales tax holidays at all.

Sales tax holidays tend to be popular with constituents, so they’re politically popular. Consumers like them because they don’t have to pay sales tax, and what’s not to like about that? Affected businesses like them because they get people shopping. (Whether sales tax holidays actually increase sales is a matter of debate; they may simply shift the date of a purchase.)

In addition to spreading political goodwill, there are often other motives behind sales tax holidays. New York created what the National Conference of State Legislatures calls “the first modern sales tax holiday for clothing” in 1997 to compete with neighboring New Jersey, where most clothing is always sales tax exempt. Connecticut enacted its first sales tax holiday in 2000 as part of a larger tax reduction package. 

States prone to hurricanes and other extreme weather, like Alabama, Florida, and Texas, often provide disaster preparedness tax-free weekends to encourage taxpayers to purchase items that can help them weather a natural disaster. Qualifying products typically include batteries, ice chests, and tarps.

Maryland, Missouri, and Texas are among the states that provide Energy Star and/or WaterSense sales tax holidays to incentivize taxpayers to replace older appliances with newer, more efficient appliances. And Louisiana and Mississippi offer an annual Second Amendment sales tax holiday for guns and hunting supplies, likely as a show of political support. 

During and after the worst of the COVID-19 lockdowns, some states established sales tax holidays to support businesses hit hard by the pandemic. For instance, Tennessee created a tax-free weekend for restaurant food and drink in 2020.

And the pandemic may have contributed to Florida’s recent infatuation with sales tax holidays. Florida only offered back-to-school and disaster preparedness sales tax holidays in 2019 and 2020. Starting in 2021, Florida added temporary exemptions for a range of other transactions, such as:

  • Admissions 
  • Diapers, baby clothes, and footwear
  • Gas ranges and cooktops
  • Impact-resistant doors, windows, and garage doors
  • Outdoor activity products and suppliesTools

If any state were going to propose a virtual currency sales tax holiday, it would be Florida. 

Neither SB 352 nor HB 369 explain why such a temporary sales tax exemption is needed, but it’s clear it would encourage the use of virtual currency and therefore support the virtual currency industry.

This is in step with Florida’s stance on cryptocurrency. Governor Ron DeSantis wants the Sunshine State to be a “destination for crypto investment.” Miami Mayor Francis Suarez has vowed to make Miami the capital of crypto (and seems undaunted by the collapse and bankruptcy of Miami-based FTX). His support of the industry has reportedly won him campaign donations.

Of course, that doesn’t explain why the proposed virtual currency sales tax holiday would only apply to the sales specified.

Why temporarily exempt only sales by certain businesses?

Sales tax holidays usually apply only to certain transactions. And unlike what these two bills propose, the temporary sales tax exemptions typically apply to specific products or services, no matter where they’re sold.

So, during the Texas back-to-school sales tax holiday, a qualifying shirt would be exempt whether purchased online, at a gas station, or at a box store. (One exception: Florida’s sales tax holidays typically don’t extend to otherwise qualifying sales made at airports and amusement parks.)

What SB 352 and HB 369 propose is unusual. It seems that whatever is sold by a qualifying business would be exempt so long as the purchase is made with virtual currency.

Does that include both food and drinks sold by a bar, nightclub, or restaurant, as well as any nonconsumable swag they may sell? Would it apply to everything sold at convenience and grocery stores, including beer, wine, and spirits? Would it apply to motor fuels or special fuels, or simply anything else sold by a qualifying retail service station? To all services offered by a barbershop, spa, qualifying cosmetology salon, or specialty salon?

Why were these businesses selected but not others?

It’s a mystery, and unless more details are provided, it will likely remain one. 

The exemption for services at barbershops, spas, qualifying cosmetology salons, or specialty salons is particularly puzzling because “barber and beauty shops are not required to collect the tax on the receipts from their services.” Charges to use a tanning bed are also already exempt.

There’s no guarantee either of these bills will make it to law. In the meantime, I can’t wait to see what new sales tax holidays Florida comes up with next.

See our 2023 sales tax holidays blog post for more information about the tax-free periods offered in 2023.

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