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Review Of Sales Tax Exemptions Sought

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By CATHERINE DOLINSKI, The Tampa Tribune

Published: February 13, 2008

TALLAHASSEE - After years of avoiding the task, lawmakers may have to review and vote on whether to keep special-interest sales tax exemptions on the state books.

A subgroup of the Florida Taxation and Budget Reform Commission approved a pair of proposals Tuesday that would require lawmakers to form a committee to review the 246 state sales tax exemptions and vote on whether to toss out those the committee deems unnecessary.

The only way to get lawmakers to reconsider sales tax exemptions, many of which benefit powerful lobbying interests, is to force them to do it, said Commissioner John McKay, a member of the commission's Finance and Tax Committee and former Senate President. "There are more studies than any of us can count that have told the Legislature to review these sales tax exemptions, and they haven't done it."

The mandatory review is a proposed constitutional amendment and needs approval from 17 members of the 25-member commission to reach the November ballot. The portion of the proposal establishing the joint committee is a statutory recommendation to the Legislature and will require a majority of commission votes. Both move to another committee.

Tuesday's panel postponed voting on two more wide-reaching plans that would use sales tax dollars to pay for property tax relief.

One proposal, from McKay, would cut property taxes by about one-quarter by eliminating the portion that pays for public schools. Lawmakers would have to offset that $8 billion loss by eliminating sales tax exemptions, applying the sales tax to at least some services, levying a sales tax increase of up to one penny, or some combination of those.

But McKay's plan ran into trouble when economists who work for the commission forecast that the plan would cost the state 53,000 jobs over 10 years.

The committee delayed voting on the plan until another economist, who was called away at the last minute Tuesday, can speak to the committee.

Commissioner and former House member Carlos Lacasa's plan also was shelved until later. His proposal would provide a 25 percent exemption for all properties and a 5 percent cap on annual assessment increases for nonhomesteaded properties. Lacasa seeks to pay for his plan with a three-year, one-cent sales tax increase, which lawmakers would decide thereafter to continue or eliminate.

Committee members delayed voting until Lacasa can produce more information on the fiscal impact, which he said he will bring to the next meeting Feb. 25.

Reporter Catherine Dolinski can be reached at (850)222-8382 or cdolinski@tampatrib.com.

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