Sales Tax Cut Appears Dead as House and Senate Leaders Agree to More Limited Exemptions

Nearly a month after leaving the Capitol without passing a budget, House and Senate leaders said Friday night they had reached an agreement that will clear the way for lawmakers to begin hammering out details of a spending plan Tuesday.

House Speaker Daniel Perez, R-Miami, and Senate President Ben Albritton, R-Wauchula, issued memos that indicated they expect to pass a budget for the 2025-2026 fiscal year on June 16. The memos came after weeks of behind-the-scenes talks aimed at trying to kick-start the conference negotiating process.

The memos said the agreement includes a $900 million tax cut through eliminating a tax on commercial leases, a longtime priority of business lobbyists. It also includes what the memos described as $350 million in “permanent sales tax exemptions targeted towards Florida families,” $250 million in debt reduction and $750 million in annual payments into a state rainy-day fund.

“In total, the framework set forth in these allocations provides for a fiscally responsible, balanced budget that reduces state spending, lowers per capita spending, and reduces the growth of state bureaucracy,” Albritton wrote in his memo to senators. “The budget authorizes early payoff of state debt, accounts for significant, broad-based tax relief, and builds on historic state reserves for emergencies.”

Conference committees will start meeting Tuesday to negotiate details of the different parts of the budget, such as education, health care and criminal justice. Unresolved issues will go Thursday to House Budget Chairman Lawrence McClure, R-Dover, and Senate Appropriations Chairman Ed Hooper, R-Trinity, for further negotiations.

The fiscal year will start July 1, which, if a budget passes June 16, will give Gov. Ron DeSantis two weeks to use his line-item veto authority.
The House and Senate were unable to reach agreement on a budget before the scheduled May 2 end of the annual legislative session because of differences about tax cuts and spending levels. Lawmakers extended the session, but House and Senate leaders remained at odds as they worked behind the scenes.

The House in April approved a plan that called for cutting the state sales-tax rate from 6 percent to 5.25 percent, which would have totaled roughly $5 billion. But the Senate did not go along and pitched a plan that included providing a sales-tax exemption on clothes and shoes valued at $75 or less, sales-tax “holidays” and trimming the commercial-lease tax.

DeSantis, meanwhile, called for cutting property taxes and criticized the House’s plan for reducing the sales-tax rate.

Perez and Albritton indicated on May 2 that they had reached a “framework” that would include $2.8 billion in tax cuts, including reducing the sales-tax rate.

But that later blew up, with Perez publicly accusing Albritton of backing out of the deal. But Albritton said senators had raised concerns that a cut in the sales-tax rate would not be “meaningful, felt, or seen by families and seniors when compared with other available options.”

The memos released Friday night did not provide details of the $350 million in sales-tax exemptions that are included in the latest agreement. They also did not mention property-tax cuts.

–Jim Saunders, News Service of Florida