State gives sales tax holiday a holiday
For only the third time in more than a decade, the Florida Legislature this year failed to provide a Sales Tax Holiday relief period for back-to-school supplies during its regular legislative session.
Neither was there any successful movement to assist state residents with the sales tax suspension relative to hurricane preparedness.
Although House Bill 815 was introduced and would have provided for this measure, it was not passed, largely as a result of the prevailing economic climate in the state.
"I think everyone acknowledges that it's a good thing," State Representative Greg Every stated, "but we didn't have the funds to do it this year. Having a sales tax holiday would have meant that we would have had to reduce funding in other areas."
The last Hurricane Preparedness Sales Tax Holiday enjoyed was June 1 through June 12, 2007. It was the third such annual holiday and was estimated to save Floridians almost $25 million in sales taxes. The Hurricane Sales Tax Holiday was hailed by Governor Crist during its last investiture as a measure that would give Floridians "...the opportunity to be prepared for any possibility" and included such tangible items as flashlights and other self-powered light sources, tarps, and batteries, among others, within price established guidelines.
The Back-to-school sales tax holiday is the past has established a period during which clothing, footwear, wallets, and bags that cost $50 or less, and school supplies that cost $10 or less were exempt from the state sales tax and county discretionary sales surtaxes (commonly called local option sales taxes.) Certain other restrictions applied as to where it was to take place.
According to the House of Representatives staff analysis, last year's enactment reduced state revenues by $23.4 million and local revenues by $5.2 million in FY 08-09.
Since 1998, the Legislature has enacted eight similar temporary exemptions from the state sales tax and county discretionary sales taxes. The 1998 sales tax holiday exempted clothing and footwear that cost $50 or less from taxation for seven days.
From 1999-2001 and 2004-2006, each sales tax holiday has lasted for nine days. The 2007 holiday lasted for 10 days.
Beginning in 1999, in addition to exempting clothing and footwear from taxation, each sales tax holiday has also exempted wallets and bags. Except for 1999 and 2000 the holiday has been limited to clothing, footwear, wallets, and bags that cost $50 or less. During that same period the Legislature increased the exemption to $100 or less.
For each sales tax holiday, the Legislature has provided the Department of Revenue with an appropriation ranging from $2000,000 to $224,110 to administer the sales tax holiday.
Last year the sales tax exemption period was designated a seven-day period of August 2-8, 2008.
The direct economic impact on the private sector is minimal, according to Legislative staff reports. Due to the timing of the sales tax holidays, families were able to save money on books, clothing, footwear, wallets, bags, and school supplies before the beginning of the school year. In addition, the tax exemptions likely increased the sales of exempt items during the holidays.
Although retail sellers may have incurred costs in reprogramming cash registers and accounting systems, the costs likely were mitigated by the use of existing procedures developed for previous sales tax holidays.
This year's failed measure would have lasted from August 1, 2009 through midnight, August 7, 2009. It would have complemented the Santa Rosa County School calendar which indicates that students begin classes August 24, 2009.
Rep. Evers' office indicated that the Hurricane Preparedness Sales Tax Exemption most likely suffered for the same reasons as the back-to-school sales tax holidays' failure to survive: The economy.
(Thanks to Rep. Evers' Legislative Aide Timothy Parson for his assistance in the preparation of this article.)
