$200M Florida tax relief package features new ‘Freedom Week’ tax holiday

Before adjourning their 60-day session last week, Florida lawmakers approved a $196 million tax relief package that includes a third week-long tax holiday and new tax credits and exemptions for hiring interns, charitable contributions, cleaning contaminated sites and purchasing items that assist in independent living.

House Bill 7061, assembled by the House Ways & Means Committee, was unanimously approved Friday by the Senate, subsequently endorsed by the House in a 117-1 tally and sent to Gov. Ron DeSantis’ desk. Rep. Omari Hardy, D-Lake Worth, was the only dissenter.

“This legislation provides tax relief for families purchasing supplies for the new school year, which will be great help for those returning to in-person learning, and also provides savings for computers and other supplies that would be helpful for remote learning,” said Senate President Wilton Simpson, R-Trilby. “We also further incentivize affordable housing opportunities by expanding the property tax exemption for property owners who have a long-standing commitment to maintaining their units as affordable housing properties.”

HB 7061, which incorporates measures initially filed as stand-alone bills, does not include the estimated $1 billion tax cut Florida businesses can anticipate with the adoption of Senate Bill 50, which requires online retailers collect and remit state sales taxes.

Under SB 50, which DeSantis has signed, beginning July 1 increased sales tax revenues will be directed into the state’s Unemployment Compensation Trust Fund to keep unemployment taxes from going up after the state’s unemployment tax rate that businesses pay jumped from $7 per employee last year to $49 this year.

Once the unemployment fund is restored to $4 billion, SB 50 stipulates the increased sales tax revenues are to be used to lower the unique-to-Florida business rental tax on commercial leases from 5.5 to 2 percent.

HB 7061’s tax relief measures are about double the package lawmakers approved last year amid the emergence of the COVID-19 pandemic. Among notable components:

• Disaster Preparedness Sales Tax Holiday: This year’s disaster preparedness tax-free holiday is expanded from last year’s seven days to 10, May 28-June 6. Floridians will save a projected $10.1 million in sales taxes during the holiday. Examples of tax-free items include: flashlights and lanterns,$40 or less; radios $50 or less; tarps $100 or less, coolers $60 or less, batteries $50 or less; and, generators $1,000 or less. “We have all been so focused on the pandemic, that it can be easy to forget that hurricane season is right around the corner,” said Sen. Ana Maria Rodriguez, R-Miami, who guided HB 7061’s passage through the Senate. “This bill incentivizes advanced planning with tax breaks on key supplies families and businesses need for disaster preparedness.”
• Freedom Week: This new tax holiday, from July 1-7, apply to admissions to live concerts and sporting events, movies theaters, museums, performing arts, state parks, fairs, festivals, cultural events, gyms and physical fitness facilities. It also exempts purchases of sports/camping, fishing, boating, water activity equipment. Floridians are expected to same $54.7 million in sales taxes during the holiday. “As Florida families prepare for a full return to pre-pandemic life, the bill provides tax relief for a variety of outdoor events and activities individuals and families can enjoy this summer and fall,” Rodriguez said.
• Back-to-School Sales Tax Holiday: This year’s back-to-school tax-free holiday is also expanded from last year’s seven days to 10, July 31-Aug. 9. Tax-free items include clothing, footwear and backpacks costing $60 or less, school supplies costing $15 or less, and the first $1,000 of personal computers or personal computer-related accessories. Floridians are projected to save $69.4 million in sales taxes during the holiday.
• Independent living sales tax exemption: A wide range of items used by the elderly or disabled that help them live independently can be purchased tax-free. Floridians are projected to save about $3.8 million through the new tax exemption. “We know Florida is a retirement dream for so many around the country, and we know our seniors have a much better quality of life when they can stay in their own homes, or with family as long as possible,” Rodriguez said. “This legislation offers a tax break on items Floridians can use to make their homes safer for older Floridians as well as other family members who may face mobility challenges, promoting the independent lifestyle we all value.”
• Affordable Housing tax credit: Florida offers property owners who provide affordable housing a 50% discount for property taxes on those units. To incentivize more property owners to do so, this provision expands the discount to 100% of property taxes. State economists forecast $22.8 million in affordable housing tax credits will be awarded next year.
• Contaminated site rehabilitation tax credit: This is a one-time increase in the annual cap on income tax credits corporations can claim for voluntary cleanup of contaminated sites from $10 million to $27.5 million. Corporations are projected to claim $17.5 million tax credits in utilizing the one-time cap boost.
• Florida Internship Tax Credit Program: This new program grants a corporate income tax credit of $2,000 for each student intern employed, up to a maximum of $10,000, Jan. 1. The total credits available are capped at $2.5 million.
• Flood resistance property tax exemption: This is contingent on Florida voters in November 2022 approving a constitutional amendment, HJR 1377, to authorize the Legislature to prohibit improvements that enhance a property’s resistance to flood damage from being included in that property’s taxable assessed value. If approved, property owners are projected to receive $25.1 million in resilience tax exemptions.

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