TALLAHASSEE, Fla. – Jan. 18, 2008 – A committee of the Florida Taxation and Budget Reform Commission on Thursday gave first approval to a plan (CP 0002) that would mandate taxation of goods and services to buy down school property taxes, despite strong opposition from business groups concerned the measure would jeopardize Florida’s ability to compete for new business and industry.
Sponsored by Commission member and former Senate President John McKay, this proposed constitutional amendment would require the Florida Legislature to tax enough goods and services to generate $8 billion in sales taxes to fund schools, and thus reduce property taxes for schools. Under the plan, lawmakers likely would have to close some sales tax exemptions and tax some services that are now tax-free, which could include dry-cleaning, attorney services or Realtors’ commissions.
2007 FAR president Nancy Riley, also a member of the Commission, held firm in opposition to the proposal, citing concern that it could result in both higher sales taxes and little or no permanent property tax relief. Even three members of the governmental procedures and structure committee who voted yes expressed reservations about parts of the plan.
Numerous business representatives testified in opposition, arguing that the proposal mandated increasing sales taxes by $8 billion without identifying the goods or services to be taxed. The business community further objected to the lack of any provision to ensure that property taxes were actually reduced by $8 billion after the first year.
What’s next? The Commission’s finance and taxation committee will debate the proposal at a hearing in Tallahassee on Feb. 11. If it’s approved, the measure then will go before the full 25-member Florida Tax and Budget Reform Commission. Two-thirds of the commission’s members must vote yes in order for the proposal to be on the November ballot.
In other Commission business, its governmental procedures and structure committee approved two proposed constitutional amendments: CP 0015, which would exempt land used for conservation purposes from property tax; and CP 0016, which would authorize such land to be taxed based upon its actual use.
Meanwhile, the finance and taxation committee approved two additional proposals, one statutory (SR 0017) and one constitutional (CP 0018), which would require Florida to fully participate in the Streamlined Sales Tax Project designed to enhance collection of use taxes due on remote (catalog or internet) sales.
For more information, go to www.floridatbrc.org.
© 2008 FLORIDA ASSOCIATION OF REALTORS
