Panel stalls sales tax on services

TALLAHASSEE, Fla. (AP) – Feb. 13, 2008 – A threat to tax services in Florida, which could have included Realtors’ commissions, faltered yesterday and could be dead after almost unanimous opposition from businesses, including a call-to-action issued by the Florida Association of Realtors ® (FAR) and an economist’s testimony that it would cost 53,000 Florida jobs. A final decision will be made later this month.

The proposed amendment, pushed by Commissioner John McKay, a former Florida Senate president, represents his latest attempt to revisit the taxation of services in Florida. But the Finance and Taxation Committee defeated the proposal 7-2.

In an earlier session, Florida economist Hank Fishkind submitted a letter saying that a services tax, which would replace ad valorem taxes earmarked for schools, would benefit Floridians. But in yesterday’s session, two economists hired by the commission had a different story, suggesting that the plan would create a $3 billion average annual decline in personal income and 1 percentage point increase in the state’s consumer price index, in addition to the job losses.

In describing his reaction to the two economists’ testimony, McKay said “troubled and dumbfounded is an understatement,” and he suggested that he would withdraw the entire proposal if it cost that many jobs. However, he could not believe “you can have these two extremes,” and a final vote on his amendment was postponed until the committee’s Feb. 25 meeting.

However, the committee also approved, by 9-1, a second proposed constitutional amendment that would force the Florida Legislature to take a second look at existing non-service tax exemptions, such as certain stadium skyboxes and ostrich feed, though it keeps exemptions such as food and medicine. That proposal still needs approval from a second committee before going for a vote before the full commission.

© 2008 FLORIDA ASSOCIATION OF REALTORS®

Questions, comments or suggestions on this article? Have a news tip? Send a letter to the editor to: Newseditor@floridarealtors.org.