Weekly Round-Up: Is Florida Dialing Up a Sales Tax Rate Hike?


Taxpayers in Florida might see an increase in their state sales tax as part of an overhaul of the state’s communications services tax, Marshall Stranburg, Executive Director of the Florida Department of Revenue, told Walt Nagel, Don Griswold, and Jeremy Abrams, all with Crowell and Moring’s state tax team.  Stranburg’s comments were part of a larger interview in which he spoke candidly about current tax issues facing the state, including taxpayer confidentiality and affiliate nexus. [ full text of interview available here ].

The Department of Revenue, according to Stranburg, is part of a working group that is looking at ways to simplify the administration of the communications services tax and also remove any essentially differential treatment among like services but without harming local governments who receive a decent amount of revenue from this tax.

The option unanimously put forward by the group involves taking the communications services tax, eliminating it, moving services back into the sales tax, and then taxing them under the sales tax statutes, Stranburg said.

But in order to make it revenue neutral there would have to be a bump up in the rate on the general sales tax. And our best guess, because the working group asked the Department to try to come up with what they thought that number would be, would raise the sales tax rate by .34 percent. So the state rate would go from 6 percent to 6.34 percent, he said.

According to Stranburg, other legislative initiatives on the horizon also include the elimination of the sales tax on machinery and equipment and also a bump-up in the exemption amount for corporate income tax filers.  The Governor's put forward another bump-up in the exemption amount for corporate income tax filers, Stranburg said. “We started out a few years back at a $5,000 exemption. He bumped it to $25,000, it's gone up to $50,000, and now he's proposing to take it from $50,000 up to $75,000.”

In other developments…

Americans Online Seen Paying States Seeking $23 Billion .

States Push to Get the Most Out of Marijuana Taxes , by the New York Times.

Sutherland issues its SALT Shaker : April 2013 Digest

Morrison & Foerster releases its May 2013 issue of New York Tax Insights .

Compiled by Priya D. Nair
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