2014 Tax Reduction and Economic Development Incentive Package
1. Motor Vehicle License Fees
($0 impact to local governments - Cities and Counties)
Both the Senate and House agreed upon reducing Motor Vehicle License Fees by approximately $395 million. This measure was signed into law by the Governor and can be found in the Laws of Florida, Chapter No. 2014-6. This approved tax cut has no fiscal impact on local governments.
2. Additional Tax Cuts and Economic Development Incentives
(-$20.1 Million recurring impact to local governments - Cities and Counties)
As a part of the budget process, both chambers proposed other tax cuts and economic development incentives to negotiate a final package during the budget conference. HB 5601 was originally passed by the House on April 3, 2014 and represented the chamber’s collective tax cut and economic development incentive package. After passage in the House, the bill was then referred to the Senate Appropriations Committee. On Tuesday, April 22, the Senate Appropriations Committee made its final revisions to HB 5601 and passed the bill unanimously.
The chart below summarizes the adopted measures included within the package that have a fiscal impact on local governments.
SENATE Amended Tax Cut or Economic Development Concept
Local Government Statewide Impact
Non-Recurring (1 Year)
Sales Tax Holidays
3 – Day Back to School Sales Tax Holiday
12 – Day Hurricane Preparedness Sales Tax Holiday
Reduction of tax rate on State CST and Satellite Services
reduces the state communications services tax (CST) rates by 0.52 percent, reducing the general rate from 6.65 percent to 6.13 percent and the rate on direct-to-home satellite from 10.8 percent to 10.28 percent.
Private Label Credit Cards
Provides for refund of sales taxes originally remitted for accounts that are “charged off”
Mobile Prepaid Calling
Modernizes the definition of "prepaid calling arrangement" (Broadens exemption from state and local CST taxes)
Total Fiscal Impact to Local Government
Through the work of the Florida Association of Counties (FAC) and the Florida League of Cities (FLC), local governments were able to reduce the impacts of multiple proposals contained within the latest version of the tax cut and economic development package.
Communications Services Tax Rate Reduction
The original CST rate reduction proposal introduced by the Senate would have impacted local governments with a negative $31 million recurring fiscal impact. The concept included in the April 22, 2014 amended bill reduces the recurring fiscal impact to negative $8.3 million.
Tax Swap on the Sale of Electricity (PECO Funding Plan)
The original proposal introduced by the House would have impacted local governments with a negative $22 million recurring fiscal impact. FAC and FLC were successful in securing amendment language that provides adjustments to city and county revenue sharing formulas to offset any potential fiscal impact from the implementation of this concept. The concept included in the April 22, 2014 amended bill will not impact local government revenues.
HB 5601 will next be considered by the full Senate body and then, if passed, will be referred back to the full House for final consideration or possibly additional
Relating to Tax on Sales, Use, and Other Transactions
(Sales Tax Exemption - Commercial Leases)
SB 176 (Sen. Hukill) and HB 11 (Rep. Steube)
- Summary: SB 176 reduces the sales and use tax rate on commercial leases by 1 cent from the current state rate of 6% to 5%. The effective date of the bill would be January 1, 2015.
- Fiscal Impact: Approximately $17.2 million annually
- HB 11 phases in an incremental repeal of the sales and use tax rate on commercial leases by 1 cent per year, including local options taxes levied by local governments over a six year period. The effective date of the bill would be July 1, 2014.
- Fiscal Impact: $400 million annually after the full repeal
- Status: SB 176 has been referenced to four committees with no hearing yet. HB 11 referred to three committees with no hearing yet.
Relating to Emergency Communication System
HB 175 (Rep. Steube) and SB 294 (Sen. Hays)
- Summary: Among a variety of technical updates to current law the major emphasis of the legislation is to provide a mechanism for collection of the E911 fee on prepaid wireless services by retailers at the point of sale. In conjunction with applying the fee to prepaid wireless services the actual fee is being proposed at a reduced rate equal to creating a revenue neutral impact on the total amount of revenue currently collected.
- Fiscal Impact: It has been determined that a reduction in the fee from 50 cents to 40 cents is necessary to keep the legislation in a revenue neutral posture due to the expanded base including prepaid telecommunications.
- Status: HB 175 was approved unanimously by the entire House membership on 3/27/2014 and will now await senate action. SB 294 has passed all of its committee references and will be considered by the full senate on 4/25/2014.
Relating to Discretionary Sales Surtaxes
(Homelessness Local Option and Use of Funds for Maintaining Transportation Infrastructure)
HB 723 (Rep. Rooney) and SB 786 (Sen. Latvala)
- Summary: (After 3-19-2014 Senate Amendment) The senate version of the legislation authorizes counties to use proceeds & interest of local government infrastructure surtax for maintenance and operation of infrastructure only after the approval of an ordinance adopted via a countywide referendum. The house version of the legislation authorizes counties to use proceeds & interest of local government infrastructure surtax for maintenance and operation of transportation infrastructure only after the approval of an ordinance adopted via a countywide referendum. The Senate version also authorizes counties to levy discretionary sales surtax for homeless services & facilities pursuant to ordinance conditioned to take effect upon approval of referendum. The proposed local option for homelessness services would be included underneath the existing cap on combined local discretionary surtaxes levied by counties.
- Fiscal Impact: The revenue estimating conference has yet to provide an analysis
- Status: HB 723 was approved by the House Finance and Tax Committee on 3/26/2014 and now moves to the House Local and Federal Committee, which is its second of three references. SB 786 has passed two of four committees of reference.
Relating to Entertainment Industry
(Film and Entertainment production incentive program)
HB 983 (Rep. Diaz) and SB 1640 (Commerce and Tourism)
- Summary: Both bills provide technical revisions to the existing incentive programs and provides for appropriation to fund the program over several years. Currently, the House bill provides funding in the amount of $200 million per year for six years. The Senate bill provides funding in the amount of $50 million per year for six years.
- Status: HB 983 has three committees of reference. SB 1640 passed out of its first committee of reference and is scheduled next to be heard in Finance and Tax.
SB 1734 (Sen. Detert)
- Summary: This bill is similar S 1640 with the major exception that applicants receiving film or entertainment tax credits must receive a 10 percent cash match from the county in which the major production will take place.
- Status: SB 1734 was passed by the Senate Commerce and Tourism committee on Monday 4-7-2014, and is referenced to the Senate Appropriations committee.