The governor of Florida, Ron DeSantis, signed an ambitious package of tax cuts valued at $1.6 billion, which includes both permanent and temporary tax benefits for residents and businesses in the state.
Among the main changes is the elimination of the state tax on commercial leases, as well as sales tax exemptions on school supplies, hurricane preparedness supplies, outdoor activity products, and firearms and ammunition.
"This budget provides over $2 billion in tax relief for families and businesses in Florida, including a permanent sales tax exemption during back-to-school each August, permanent tax exemptions for disaster preparedness items, the elimination of the corporate income tax, and a sales tax exemption protected by the Second Amendment from September 8 to December 31 of this year," DeSantis detailed on X.
"I have granted nearly $10 billion in tax relief to Floridians since I took office," he emphasized.
The new legislation, identified as HB 7031, was approved by the state legislature on June 16 and went into effect on Tuesday.
Main changes included in the package:
Elimination of the 2% tax on commercial rentals starting October 1, a measure long anticipated by small business owners. It is estimated to reduce state and local revenues by more than $1.1 billion over the next fiscal year.
Permanent exemptions from sales tax for hurricane preparedness products such as batteries, tarps, and portable generators.
Permanent tax exemptions for outdoor items such as life jackets, bicycle helmets, sunscreen, and insect repellent.
Tax-free entry to state parks and tickets for select events, such as NASCAR races at Homestead-Miami Speedway.
Exemption from the sales tax on gold, silver, and platinum bullion when the transaction price is less than $500 (it was already exempt for higher amounts).
Special seasons without taxes:
Tax-free school season every August, which will allow avoiding the payment of taxes on:
Clothing, footwear, and backpacks for up to $100
Personal computers up to $1,500
School supplies up to $50
Aid for learning of up to $30: This measure is expected to represent $217 million in savings for Florida families in its first year.
Tax season for outdoor activities from September 8 to December 31, which will apply to hunting, fishing, and camping items, including:
Weapons and ammunition
Bows, arrows, rods, and reels up to $75
Tents up to $200
Sleeping bags and portable stoves. The estimated savings from this measure will be $44.8 million.
Other aspects of the package:
Repeal of the aviation fuel tax
Expansion of the use of tourist taxes to pay for lifeguards at beaches and develop infrastructure in rural counties with fiscal limitations
Reactions
Bill Herrle, executive director of the National Federation of Independent Business in Florida, celebrated the repeal of the commercial rent tax, calling it "the culmination of a 10-year effort."
He stated that this measure will provide "immediate economic relief" to small businesses renting premises in the state.
Fiscal impact
Although the cut represents $1.6 billion in the first year, the recurring effects could exceed $2 billion in subsequent years.
The Senate spokesperson, Katie Betta, indicated that the impact on the state's overall revenue will be approximately $1.3 billion.
The governor signed this package concurrently with the approval of the new state budget for the fiscal year 2025-2026, which also took effect on Tuesday.
Frequently Asked Questions about Tax Cuts in Florida
What tax changes has Ron DeSantis implemented in Florida?
Ron DeSantis has signed a tax cut package worth $1.6 billion, which includes the elimination of the state tax on commercial leases, tax exemptions for school supplies and hurricane preparedness items, and a temporary tax exemption for firearms and ammunition. These changes aim to ease the tax burden for residents and businesses in Florida.
How does the repeal of the commercial lease tax affect small businesses?
The elimination of the 2% tax on commercial leases will provide immediate economic relief to small businesses renting spaces in the state. It is estimated to reduce state and local revenues by over $1.1 billion during the next fiscal year, benefiting entrepreneurs in Florida.
What products are tax-exempt in Florida under this new tax package?
The fiscal package includes permanent sales tax exemptions for hurricane preparation products and outdoor items, such as batteries, tarps, portable generators, life jackets, and bicycle helmets. Additionally, during back-to-school season every August, clothing, footwear, and backpacks costing up to $100, personal computers valued up to $1,500, and school supplies up to $50 are exempt from taxes.
What fiscal impact will this package of cuts have on Florida's budget?
The tax cut package represents a relief of $1.6 billion in the first year. However, the recurring effects could exceed $2 billion in the following years. Senate spokesperson, Katie Betta, stated that the impact on the state's general revenues will be approximately $1.3 billion.
What are the special tax-free seasons in Florida?
Florida has established special tax-free seasons, including the tax-free school season each August and a tax holiday for outdoor activities from September 8 to December 31. These measures allow residents to save on the purchase of essential and recreational items, such as school clothing and camping gear.
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