TALLAHASSEE -- Buyers of yachts and private airplanes in Florida would be spared from paying the full 6 percent sales tax on their purchase. But magazine subscribers would now start paying taxes.

Those were among the decisions the House Finance and Tax Council made Monday as it weighed pros and cons of revising Florida's tax system in a wide-ranging bill that creates two sales tax holidays for shoppers and leaves the budget $25 million in the red.

BALANCING ACT

House Republicans who pushed through the tax breaks said it was a balancing act between promoting jobs and raising new revenue. They were confident they would find the needed money by the end of the legislative session on May 1.

''We're going to get there,'' promised Rep. Ellyn Bogdanoff, the Fort Lauderdale Republican who heads the Finance and Tax Council.

Some of decisions in the tax bill were motivated by equity: Since a magazine that arrives in the mail is tax-free but the same magazine is taxed when sold at a convenience store, they argued the tax should apply to both.

Others were motivated by tax avoidance: Florida residents too often skip paying sales taxes on purchases of high-end planes and boats by keeping them out of state for six months. By capping the tax, legislators argued, buyers may keep their boats and planes in Florida.

And sometimes they just couldn't agree, in which case the Republican majority won. A Democratic proposal to require the sales tax be imposed on bottled water in containers one gallon or less was defeated in a party line vote.

UNANIMOUS APPROVAL

In the end, the bill was approved unanimously -- as both Republicans and Democrats admitted the final version was not perfect.

The measure was originally intended to eliminate several sales tax exemptions to finance the two $29 million sales tax holidays -- one for three tax-free days in June for hurricane supplies and another for three tax-free days in August for back-to-school supplies.

But a series of amendments whittled those exemptions down and added new ones. The end result is that the bill will cost the state about $25 million more than it will produce in new revenue.

A measure proposed by Rep. Tom Grady, R-Naples, would cap the sales tax on boats and planes that cost more than $300,000 at $18,000.

An attempt to replace that lost revenue by imposing the sales tax on bottled water of 4 gallons and less was rejected by the committee in a party-line vote of 10 to 4. An amendment to impose the tax on bottled water one gallon or less was also rejected.

Democrats also failed at an attempt to remove a provision from the bill that would tax magazine subscriptions and newspapers that are received by mail, and also failed in an attempt to make the sales tax holiday permanent.

Mary Ellen Klas can be reached at meklas@Miami Herald.com

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