Florida House pushes tax cuts for utilities, dialed-back relief for average Floridians

Florida House Republicans are proposing cutting taxes for utilities and businesses. But they’re pitching fewer tax breaks this year for everyday consumers, including for Floridians experiencing sky-high property insurance premiums.

Under a proposed tax package released this week, House leaders are considering allowing utilities that build solar, often in in rural counties, to avoid paying some taxes — an idea long sought by Florida Power & Light. They also want to cut the business rent tax from 2% to 1.5%, saving companies an estimated $339 million.

With legislative leaders warning about federal pandemic money drying up, they’re proposing fewer sales tax holidays and not renewing tax breaks on gas stoves and Energy Star appliances. And they’re not supporting Gov. Ron DeSantis’ idea to cut Floridians’ homeowners insurance taxes and assessments, which could have saved Floridians up to a couple hundred dollars each.

Overall, it’s a slate of tax breaks about half the size of last year’s, when lawmakers passed a record $1.3 billion package.

Republican leaders in the House and Senate have been warning that they would be tightening the belt on tax breaks and local appropriations.

“We need to start pulling back,” House Speaker Paul Renner, R-Palm Coast, said last week.

But House Minority Leader Fentrice Driskell, D-Tampa, called the tax breaks “one-sided.”

“Neglecting to provide tax relief to Florida consumers while freely giving such relief to large corporations is a missed opportunity to help families and small businesses who are also struggling,” she said in a statement.

A tax break for utilities

Lawmakers are considering passing a tax break that power companies have been trying to get since 2020.

It started in 2019, when Florida Power & Light disputed paying a tax bill on its equipment at a new natural gas-fueled plant in Okeechobee County. The company started up the plant but didn’t officially put it online. Okeechobee County Property Appraiser Mickey Bandi said the disputed tax bill was between $14 and $15 million.

The Okeechobee County Property Appraiser pointed to state law that construction work is subject to ad valorem taxation when it is “substantially completed” and connected with a “preexisting, taxable, operational system or facility.”

Florida Power & Light, a powerful political operator in Tallahassee, went to the Legislature to “clarify” the law, but lawmakers didn’t take up the changes. This year, House lawmakers want to change the definition of “substantially completed” to when “all permits or approvals required for commercial operation have been received or approved.”

The change would apply retroactively to projects completed in 2024. At least seven major solar projects are scheduled to be finished this year.

The cost to county governments is an estimated $3 million each year. Most of that burden would fall on poorer rural counties, where the solar projects are being built.

Mike Twitty, the Pinellas County property appraiser who’s also the legislative chairperson for the Property Appraisers’ Association of Florida, said that electric utilities already receive an 80% exemption on equipment for renewable energy projects, and this carveout will give them additional benefits not available to other companies.

He said that under this proposal, if a utility company doesn’t have every local, state or federal permit it needs by Jan. 1, “then they would basically escape taxation for that entire year.”

Tax holidays, but no insurance break

House Republicans are still proposing two sales tax holidays for disaster supplies and one for tools, but others from last year would be scaled back or eliminated.

There would be just one back-to-school sales tax holiday instead of two. Instead of a three-month “freedom summer” tax break on outdoor supplies, this year’s break would last a month. The fuel tax holiday during October last year would not be renewed, and neither would yearlong breaks on gas stoves and Energy Star appliances.

Notably, they’re proposing a new tax break of up to $10,000 for corporations that hire people with disabilities.

The House also didn’t include DeSantis’ idea to cut the 1.75% premium tax and other charges and assessments on homeowners and flood insurance premiums.

DeSantis’ proposed cuts are modest, but a homeowner paying the state’s average $6,000 homeowners insurance premium would save $231, according to Mark Friedlander, spokesperson for the Insurance Information Institute, which is backed by insurance companies. Someone paying the $985 average flood premium would save $17.23.

“Any savings is good, but it’s minimal,” Friedlander said. “And to be honest, most likely you’re going to see rate increases higher than the potential savings.”

The Senate has not yet released its tax package, and both sides will negotiate to come up with a final product.

Senate President Kathleen Passidomo said last week that she supported cutting the insurance taxes.

“Every little bit helps,” she said.

A previous version of this story incorrectly stated the type of Florida Power & Light plant in Okeechobee County and the size of its disputed tax bill.

This story was originally published February 13, 2024 at 4:03 PM.