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Florida Cities and Counties Fighting Over Sales Tax

Palm Coast City and Flagler County Florida share the revenue from a 1% local sales tax. But now that share is coming into question. Of the 1% local sales tax, “…half a cent goes to the school board, the other half is split between county government and the cities.”

Palm Coast City has historically shared a split with Flagler County as follows:

Over the 10 years, the city collected $23.4 million from the $40 million generated. So the city has received just over 50% of the portion of the sales tax allotted to be split between the county and city.

The 1% sales tax that was approved by voters 10 years ago expires later this year. The voters will need to determine whether to extend the sales tax another 10 years or put a halt to it. Unfortunately discord on how the sales tax would be used or split up is making the sales tax a complex issue.

“The city believes it is being short-changed…and wants the formula reworked and its share of the money increased.” However, the county “…is proposing to decrease Palm Coasts’s share over the 10 years.” Arguments of who should get the bigger share may be premature, but the sales tax being extended may be inevitable.

If voters approve a Florida constitutional amendment in November, it would reduce the capability of local governments to gain revenue through property taxes, which leaves them to rely on income and sales taxes or other taxes such as utility and excise taxes to gain the revenue they need to support improvements and services.

Both sides are expressing a greater need for money for the following reasons:

  • Palm Coast: improvements to infrastructure, especially storm water systems
  • Flagler County: to provide public safety for all county residents

Flagler County is quick on the draw saying that “..the jail expansion is driven mostly by Palm Coast suspects….” Palm Coast is suggesting that a utility franchise fee or “…another form of utility tax, which can be imposed unilaterally by the council, without voter approval, on electric bills…” provides a much greater revenue potential than sales tax and “…all the money remains in Palm Coast for the Palm Coast City Council to use as it chooses.”

The complex choices and political ramifications have both sides citing reasons “…why the city should not opt out of the sales tax and … citing reasons why it should. Either way, it won’t eliminate either government’s needs.”

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Sales tax rates, rules, and regulations change frequently. Although we hope you'll find this information helpful, this blog is for informational purposes only and does not provide legal or tax advice.
Avalara Author
Susan McLain
Avalara Author Susan McLain
Susan McLain began her career as a technical writer in technology industries such as satellite networking and medical devices. Her skills encompass technical and marketing writing, usability engineering, verification and validation testing and protocol writing, requirements development, business analysis, technical illustration/graphic design and marketing. She has owned her own business providing service to small to medium sized business and in other positions, she has been in project management, documentation and marketing. She is currently the content specialist for Avalara helping to “make sales tax less taxing.”