Governor Today May Decide Cutting Rent Tax

Todays News

BY JACOB OGLES SRQ DAILY MONDAY BUSINESS EDITION MONDAY APR 19, 2021

A proposal to require collection of online sales tax and slash Florida’s commercial rent tax sits on Gov. Ron DeSantis’ desk. There’s a deadline today for the governor to sign the bill into law, veto it, or let it become law without his explicit signature of support.

Sen. Joe Gruters, R-Sarasota, has pressed three years for the “e-fairness” measure. Florida is one of two states charging sales tax but not requiring e-commerce retailers to collect the tax. State revenue estimators collecting the money will bring in about a billion a year in tax revenue to the state.

“I would never support a tax increase,” Gruters said, but he noted Florida residents by law are supposed to track their online purchases each year and pay sales tax directly to the Department of Revenue. Most don’t unless they get audited, at which point they frequently have to pay penalties and interest.

A Supreme Court ruling in 2018 made clear states could require collection of sales tax for e-commerce, but the House has been reluctant to take the matter up. This year, leadership struck a deal to replenish the state unemployment trust, which was depleted in 2020 thanks to a rush of claims during the pandemic. The House also amended the legislation to require, once the trust has more than $2 billion in it again, to cut Florida’s commercial rent tax from 5.5% to 2%.

Gruters supports that, and had proposed a similar approach when he first filed e-fairness legislation in 2019.

“It will basically make this revenue neutral forever,” he said. Florida is the only state in the union to charge a commercial rent tax, and cutting the state rate by more than half will essentially serve as a $1 billion annual tax cut itself.

The bill still has critics on the right and the left. A number of Democrats, including many supportive of collecting the online sales tax, voted against the measure because it directs revenue from a tax on consumers to cut taxes on businesses. And some Republicans, voted against the bill, considering it a de facto tax increase because most individuals don’t pay sales tax for online commerce now.

Where DeSantis falls remains a question. He did not include the sales tax in his own budget and when asked has said he does not support tax hikes. But he has not addressed the bill since measures were attached cutting the rent tax. Restoring the unemployment trust will also avoid an automatic increase in unemployment taxes for business, many of whom had to deal with an automatic hike in January at a time when they were still dealing with economic fallout from the pandemic.

Image from Pixabay

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