Florida Could Reduce Property Tax, Increase Sales Tax
- Sales Tax News
- Oct 12, 2015 | Gail Cole
The Florida House Finance and Tax Committee is considering a measure that would swap property tax for higher sales tax.
The Finance and Tax Committee meeting of October 7, 2105, opened with a reminder that Florida has the lowest per capita state taxes in America and that the legislature is intent on reducing taxes for the state’s poorest families.
The proposed property/sales tax swap would greatly reduce or perhaps even eliminate property taxes. In exchange, it would impose a sales and use tax surtax on all transactions subject to the state tax imposed on sales, use, services, rentals, admissions and other transactions by chapter 12, Florida Statutes.” It would take effect January 1, 2017.
The draft concepts created by the committee read as follows:
“The proceeds of the surtax shall be used solely for the purpose of offsetting the reductions in ad valorem tax revenue experienced by counties, municipalities, school districts and special districts….”
Proponents of a lower property tax say it could lead to reduced rents and even an increase in home ownership. A “super” tax exemption could be imposed on the first $1 million of a property’s value (98% of all residential and business property in the state, according to CBS Miami). To offset such a dramatic reduction in property tax revenue, sales tax would have to increase by 4.93%.
Answering concerns that such a high sales tax rate would be a hardship for lower income people, Rep. Matt Caldwell (R-North Fort Myers) noted that “poor people could avoid taxes since the state fully exempts most foods, rent and medicines from the sales tax.”
Details about the property/sales tax swap are available in the meeting minutes.