Politics

Sales tax review sparks clash

As a Senate panel looks at repealing exemptions, leaders disagree.

By Associated press
Published January 11, 2008

TALLAHASSEE - A Senate committee's review of sales tax exemptions began Thursday with a partisan philosophical clash and a flashback to an ill-fated attempt at taxing largely excluded services two decades ago.

The Finance and Tax Committee's Republican chairman, Sen. Mike Haridopolos, and its Democratic vice chairman, Sen. Ted Deutch, disagreed on what to do with money the state would gain from repealing exemptions or exclusions.

Florida exempts $12.3-billion in potential sales tax revenue every year on items ranging from such essentials as food and medicine to nonessentials like horse and dog track admissions, Super Bowl tickets, collectible coins, fill dirt, cattle growth enhancers and alcoholic beverages used by businesses for tasting. The state also excludes another $23-billion on most services including advertising, haircutting, lawyering, accounting and printing.

Haridopolos of Indialantic said that if any exemptions or exclusions are repealed, the money should be used to lower other taxes - meaning no net increase in state revenue.

Deutch of Boca Raton said it should be used to avoid impending budget cuts to schools, health care and other public services due to a shortfall in tax revenues.

The advantage goes to Haridopolos because Republicans hold majorities in both houses.

Former Sen. Curt Kiser, board chairman of the nonpartisan LeRoy Collins Institute, a think tank at Florida State University, urged the panel to consider taxing services but not the way the Legislature did it in 1987 when he was a Republican lawmaker.

"The biggest mistake we made was we implemented it too fast," Kiser said.

The tax went into effect about two weeks after then-Gov. Bob Martinez, also a Republican, signed it into law. That created chaos because providers had too little time to prepare, Kiser said.

Service providers protested so vociferously that the Legislature repealed it a few months later.

[Last modified January 10, 2008, 23:01:01]