Legislative & Advocacy

Tax Relief and Economic Development (Watch)

HB 5601 (House Finance and Tax Subcommittee and Workman) was taken up and significantly amended by Senate Appropriations. The Senate committee removed the House tax relief provisions and substituted its own. HB 5601 now reduces the state communication services tax (CST) rate and the direct-to-home-satellite rate by 0.52 percent. The bill also stipulates that prepaid calling arrangements are subject to sales tax, not the CST; includes a sales tax holiday for “back to school” purchases and hurricane preparedness; permits the Department of Economic Opportunity to certify one motorsports entertainment complex to receive a monthly distribution from state sales tax revenues; allows private label credit cards dealers to apply for a sales tax refund under certain circumstances; and reduces the insurance premium tax on bail bond premiums. The bill also contains a reduction in the sales tax rate charged on commercial electricity and a corresponding increase in the gross receipts tax rate (a.k.a PECO Swap); however, local governments are held harmless from this tax swap. Also, HB 5601 now clarifies that municipalities and counties can reduce or repeal the local business tax. The full fiscal impact of the entire bill has not yet been determined. HB 5601 passed the Senate Appropriations Committee unanimously and is now awaiting action by the full Senate. (Hughes)