Gov. Rick Scott wants to expand the state’s popular sales-tax holiday to three times its current length, covering two weekends, as part of his $500 million tax cut proposal.
Scott called for lawmakers to approve the extended 10-day sales tax holiday for this coming August. The lengthened holiday is the latest of the governor’s election-year budget plan in advance of the 2014 legislative session.
“We’ve done this before, but this is a 10 day one, so it’s longer,” Scott said at Friday’s Florida Chamber of Commerce Insurance Summit held in Orlando.
A longer sales tax holiday will reduce state revenue by as much as $60 million, reports Jim Turner of the News Service of Florida.
Shoppers will not have to pay state or local sales taxes on select items — clothing under $100, school accessories like pens and notebooks costing less than $15, and computers and other electronic equipment priced under $750.
Since its inception in 1998, the school tax holiday ranged from three to nine days. The Legislature cancelled the break during recession years of 2008 and 2009, but returned it for three-days in each of the past four years.
Facing both a budget surplus of nearly $1 billion and re-election, Scott is pushing $500 million in tax and fee cuts, a majority coming from rolling back a GOP-sponsored hike in vehicle registration fees legislators approved in 2009.
Commercial groups have praised Scott’s proposal.
“An opportunity economy will allow people to keep more of their money and families will have more money to invest in their future,” said David Hart, Executive Vice President of the Florida Chamber of Commerce Executive.
Florida Retail Federation spokesperson John Fleming said the group wants permanent tax holidays instead of annual legislative authorization.
Shoppers use savings for additional purchases not covered in the exemptions, balancing out the people who wait to make purchases until the tax holiday begins, Fleming told the News Service.
“There might some shifting of spending, but it really does increase sales overall,” he added
The retail association also supports SB 362, a hurricane-holiday measure to lift sales tax on certain storm-related gear at the start of hurricane season, as well as the proposed tax break sponsored by Agriculture Commissioner Adam Putnam’s on Energy Star appliances costing under $1,500.
Scott’s tax proposals are seen as a blow to Democratic candidate Charlie Crist, who as Florida’s Republican governor signed the rate hike of 54 percent into law, to close a budget gap in 2009.
Scott is hoping the fee cuts add up to savings of $401 million. Republican Senate Appropriations Chair Joe Negron proposed SB 156 a pared-back version of the measure. Negron’s plan could produce average savings of $12 per vehicle, about half the 2009 fee hike, equating to savings of about $185 million for the upcoming budget year and up to $236.7 million the following year, Turner writes.