Florida's Sales Tax Holiday: Back Again

Tomorrow marks the beginning of Florida's latest "sales tax holiday." This time around, purchases of various "storm-related" items will be sales-tax-free for the next 12 days.
Items that are temporarily tax-exempt include batteries, generators, tarps, storm shutters, and carbon monoxide detectors.

Lawmakers wanted to make it easier for Floridians (and, in fact, non-Floridians who happen to wander through a Florida Home Depot anytime for the next two weeks) to purchase storm supplies-- but they clearly didn't want them to go overboard. That's why the temporary exemption for flashlights, for example, specifies that flashlights costing more than $20 aren't exempt. Similarly, if you want your portable radio to be tax exempt, it better cost $75 or less. The bill that enables all this, HB 211 of 2007, is here.

The direct cost to the state from lost state sales tax revenue is estimated at $20 million. In addition, administering this 12-day tax break will cost the state about $290,000.

We've written before about the shortcomings of sales tax holidays as a tax policy tool. They reward consumers who have the flexibility to make their purchases during this two-week period. They make tax administration more difficulty by forcing retailers to work with two sets of rules governing sales tax exemptions: those in force for the next 12 days, and those in force the rest of the year. And above all, they allow lawmakers to bask in the P.R. glow of having enacted a tax cut (and one that probably benefits low-income families most, as a share of their income), without actually adding up to any real savings for these families-- and without doing a thing to mitigate the overall unfairness of the Florida tax system. In sum, it's a "sound and fury" tax break-- all hat and no cattle. Read ITEP's policy brief on sales tax holidays here to find out more.

The Florida Department of Revenue has more information on the holiday here.