By Gray Rohrer | News Service of Florida
On Tuesday evening, President Donald Trump during his State of the Union address spoke of how the One Big Beautiful Bill Act he signed last year features tax cuts just now reaping dividends for Americans during tax season
On Wednesday, Florida lawmakers moved forward with a tax cut bill that doesn’t apply the new federal changes to the state’s corporate income tax.
The GOP-led Legislature often links the state’s corporate tax code with changes in the federal tax code each year in what is colloquially known as the “piggyback” bill. Instead, lawmakers will “decouple” from the federal tax law.
State economists projected the “piggyback” bill could cost the state up to $3.5 billion in revenue next year, and with the state estimated to run shortfalls of up to $7 billion in future years, legislative leaders are looking to limit spending, not add billions of dollars in tax cuts.
“Every year we try our best to be kind to the job creators and we’ll continue to do so,” said Senate budget chief Ed Hooper, R-Trinity, noting that lawmakers passed a $1 billion cut for businesses by eliminating the commercial lease tax last year.
“But this was a lift that seemed in an area where the experts say our revenue is slightly declining … it’s not the post-COVID years where we were flush,” Hooper added.
The Florida Chamber of Commerce, an influential business lobby, wants lawmakers to reconsider the move.
“The Chamber, respectfully, does have some concerns with the bill as its currently drafted,” said French Brown, a tax expert and lobbyist for the Chamber. “This isn’t just about tax relief for corporate taxpayers in 2027. It’s also about the choices that are made in this bill, and some in the House proposals, truly provide additional administrative burdens on businesses that Florida just hasn’t done in the past.”
The decoupling bill (SB 7048) passed unanimously through the Senate Finance and Tax Committee on Wednesday, but another bill (SB 7046) with modest tax cuts passed on a 5-2 vote.
That measure contains a grab-bag of cuts and other tax changes, including a priority of Senate President Ben Albritton, R-Wauchula.
The proposal would use sales taxes instead of direct-to-home satellite service taxes, a declining revenue source, to boost funds to rural counties without large property tax bases. In state law they are known as “fiscally constrained counties,” and the bill would provide $50 million for the 29 counties that qualify each year.
It’s part of Albritton’s ‘Rural Renaissance’ bill (SB 250) which passed the Senate in January but hasn’t moved in the House.
Other parts of the bill would exempt hunting, fishing and camping products – including firearms, ammunition and related accessories – from sales taxes from Sept. 7 to Dec. 31, saving consumers an estimated $34.1 million but costing state coffers $26.4 million and depriving local governments of $7.7 million.
Two Democrats, Sens. Shevrin Jones of Miami Gardens and Mack Bernard of West Palm Beach, voted against the measure over a provision that directs school districts to distribute funds from local property tax referendums to more charter schools.
“I can’t stomach the fact that we will be taking money from our neighborhood public schools,” Jones said.
The House version of the tax package (PCB WMC 26-01) was released Tuesday, containing $251 million in cuts, mostly in sales tax exemptions. But it also decouples the state from the federal tax law.
It has the hunting, fishing and camping sales tax holiday, as well as a one-year exemption for firearm accessories, worth an estimated $14.1 million to consumers.
Other provisions include cuts to cardroom and slot machine taxes – slated to cost the state $14.2 million next year - and a three-year exemption on insurance premium taxes for flood policies issued by surplus lines companies, which is projected to cost the state $27.8 million.
The House Ways and Means Committee is scheduled to vote on the bill Thursday.
After each chamber passes their bills, a final tax package will be negotiated between the House and Senate, usually as part of budget talks. The 60-day session is scheduled to end March 13, but House and Senate leaders haven’t yet entered into formal budget negotiations.