Florida Legislature has tax breaks for homeowners, shoppers on its mind
BY MARY ELLEN KLAS
Herald/Times Tallahassee Bureau
TALLAHASSEE -- On a day most taxpayers dread, Florida lawmakers spent April 15 pushing bills to provide tax relief.
But don't start spending yet -- they also made headway on repealing some sales-tax exemptions, such as on magazine subscriptions and ostrich feed, that would have some taxpayers paying more.
A Senate committee easily approved a constitutional amendment Wednesday to give first-time homebuyers a tax break on their new homes for five years. The measure, approved by the Senate Finance and Tax Committee, would be placed on the November 2010 ballot and would take effect in 2011.
It would be a blessing for ''young couples who may want to get a first home . . . or even for someone like me who never bought a home,'' Gov. Charlie Crist said during a surprise appearance before the committee. ``And I'd like to buy my first home.''
If approved by voters, the proposed amendment is seen as a way to shrink Florida's inventory of 300,000 unsold homes by creating a new homestead exemption for first-time buyers that would be added to the existing homestead exemption all homeowners receive. The exemption would be equal to 25 percent of a home's market value, up to $100,000, and would phase out until it disappeared after the fifth year.
The House version of the bill is more generous. It creates a 50 percent tax break on a home's value of up to $250,000, phased out over five years. This version is expected to be approved by the House next week.
HOUSES AT ODDS
In the House, the Finance and Tax Council used tax day to overcome years of opposition to repealing sales-tax breaks. It proposes eliminating $29 million in exemptions in exchange for two sales-tax holidays.
Exemptions that would be repealed include fitness clubs owned by hospitals, skybox rentals for college and high school games, ostrich feed, charter fishing boats, private charter-jet services, and newspapers and magazines delivered by mail. Coin-operated arcade machines would see their tax rate rise from 4 to 6 cents.
In return, the state would hold two sales-tax holidays: June 5-7 for hurricane supplies and Aug. 8-10 for back-to-school purchases.
The sales-tax holidays would only be for one year, but the sales-tax repeals would be permanent.
'It's important when we're up here talking about big-picture issues that we talk about how [consumers] are going to get their kids' shoes and prepare for hurricane season,'' said Rep. Ellyn Bogdanoff, the Fort Lauderdale Republican who chairs the House Finance and Tax Council. The committee will vote on the bill Thursday.
But Senate leaders are not as enthusiastic about the House tax swap and prefer to focus on eliminating corporate and real-estate tax loopholes to fill the state budget hole.
Senate Finance and Tax Committee chairman Thad Altman, a Melbourne Republican, said the Senate had ''bigger fish to fry'' than to spend precious time on political fights over tax exemptions. And, he suggested, the sales-tax holiday was a questionable pursuit.
''We don't really know if these tax savings are truly being passed on to the taxpayer,'' Altman said.
Overshadowing both the House and Senate tax debates is the state's crushing $3 billion budget deficit and two vastly different approaches to fixing it before the session ends May 1.
''We're polarized,'' Bogdanoff observed. ``We've got to come together at some point.''
Both the House and Senate committees are in agreement on one constitutional amendment, however: a measure to make it easier for property-tax payers to challenge their property assessments by requiring appraisers to justify how they arrived at the value.
FURTHER LEGISLATION
In other tax-related legislation on Wednesday:
The Senate Finance and Tax Committee took up a bill eliminating the advantage given to online travel services, such as Orbitz and Travelocity, which are allowed to charge consumers for sales and bed taxes they don't return to the state.
The measure is being pushed by local governments and hotel associations but is being blocked in the House by supporters of the online travel service companies.
Meanwhile, the Senate Tourism and Economic Development Appropriations Committee attached a $2 rental-car tax to fund local transit projects, such as Tri-Rail, to a bill creating a transit line in Central Florida for CSX Rail lines.
The tax, called a ''surcharge,'' was inserted in the bill so that Democratic Fort Lauderdale Sen. Chris Smith would support the legislation.
''We need a commuter system. And this is a way of getting it. This is a tax that hasn't risen since 1991,'' Smith said.
Alex Leary, Marc Caputo and Steve Bousquet of the Herald/Times Tallahassee Bureau contributed to this report. Mary Ellen Klas can be reached at meklas@Miami
Herald.com
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