Florida Supreme Court strikes two FAIR amendments
 

TALLAHASSEE, Fla. – March 23, 2007 – Former Florida Senate President John McKay cannot be faulted for a lack of commitment in his attempts to tack a sales tax onto services. But his latest effort, opposed by a coalition of 27 business interests that includes the Florida Association of Realtors® (FAR), ended yesterday in the Florida Supreme Court.

FAIR hopes to expand Florida’s tax base by expanding the current sales tax to services such as lawn service, hair cutting and, possibly, real estate commissions. An earlier push to get a constitutional amendment created through the citizen’s petition process ended when the Supreme Court ruled that the language of the ballot question covered too many topics to be acceptable. Florida has a “single subject” rule for constitutional amendment proposals.

This time, FAIR introduced three individual amendments to correct the problem cited by the Supreme Court; but yesterday, the Court ruled that two of the three amendments were defective. One amendment would have authorized a new tax on most services, while the second would have repealed most currently existing sales tax exemptions. In each case, the Florida Legislature could override the new sales taxes only by taking assertive action to vote on the override.

The third amendment, not challenged by the coalition, sets criteria for granting exemptions. The court approved its language and the amendment question could appear on the ballot if FAIR chooses to continue gathering signatures in the absence of the other two approvals.

The court ruling was based on a technical issue rather than on the amendments’ language. The amendments included dates for execution of the new law, but those dates would have passed by the time voters had a chance to consider the change. However, the court also ruled that the language did not violate the single subject rule, giving FAIR a blueprint for continuing the campaign if it wishes to start the process over again, knowing its renewed effort would likely pass muster with regard to the single subject test. The ruling was 6-1, with Justice Wells dissenting on the question of whether the amendments violated the single subject rule.

It’s unclear whether FAIR will pursue a new campaign, however. McKay says he now will wait to see what this year’s Florida Legislature does with property and sales taxes before making a decision. The House has proposed a 2.5 percent increase in the sales tax, but Department of Children & Families Secretary Bob Butterworth says that might not be necessary if the state taxes the service industry. In addition, a constitutionally created tax commission, which recently held its first meeting, has the power to put amendments before voters, and FAIR will consider that commission’s findings.
 

© 2007 FLORIDA ASSOCIATION OF REALTORS®