PROPOSED AMENDMENT COULD END MOST SALES TAX EXEMPTIONS

March 3 , 2008

ISSUE 1208

PROPOSED AMENDMENT COULD END MOST SALES TAX EXEMPTIONS

The Florida Legislature’s Tax and Budget Reform Commission's Finance and Tax Committee passed Constitutional Proposal 2 (CP0002) Feb. 25. Sponsored by Commissioner John McKay, the proposed amendment would replace $8 billion in property taxes for schools by a combination of raising the sales tax (up to 1 cent), cutting spending or repealing sales tax exemptions. The proposal prohibits the Legislature from taxing services to replace this revenue.

Last week, economists for the Tax and Budget Reform Commission, Tony Villamil and Robert Cruz, testified that McKay's proposal could eliminate 53,000 jobs a year and decrease the personal income of Floridians by $2-billion annually.

Agriculture spoke against CP0002 as did representatives from the Coalition to Protect Florida's Economy, and numerous businesses and business associations. This was the last committee stop for this proposal and it now heads to the full Commission for consideration. The full Commission must approve it before it can be sent to the Secretary of State as a ballot initiative.

“This proposal is being touted as a way to fix the property tax crisis in Florida,” said Butch Calhoun, FFVA’s director of Governmental Affairs. “Unfortunately it will not. Florida's property tax system is both unfair and unsustainable, particularly for the business community,” said Calhoun.

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PROPOSED AMENDMENT COULD END MOST SALES TAX EXEMPTIONS

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