Florida Releases Historic Tax Plan Impacting Everyone in the State

Florida officials have proposed a new tax plan that would dramatically cut the state's sales tax from 6 percent to 5.25 percent.

Florida House Speaker Daniel Perez called this the "largest tax cut in state history" and said it would save Floridians around $5 billion yearly.

Why It Matters

Florida is deemed one of the most tax friendly states, with no state income tax.

This financial appeal has drawn many Americans to migrate to the Sunshine State. More than 1,200 people moved to Florida per day between July 2021 and July 2022, according to the Tampa Bay Economic Development Council.

What To Know

The Florida House of Representatives has proposed lowering the state's sales tax from 6 to 5.25 percent, according to WUSF, the Tampa Bay area's NPR station.

"We have forgotten a fundamental truth – this money isn't ours. Tax dollars don't belong to the government, they belong to the people," Florida House Speaker Daniel Perez said in a statement to the House Chamber. "Several weeks ago, I challenged our budget subcommittees to really dive into their spreadsheets, to ask the hard questions, and find real savings."

Florida's cost of living has surged in recent years due to the uptick in residents, causing everything from housing to food prices to get higher.

More than half of all Florida households spend over 35 percent of their income on rent, the highest percentage in the country, according to a study from TurboDebt.

Newsweek reached out to the Florida House of Representatives for comment via email.

What People Are Saying

Perez said in a statement: "This will not be a temporary measure; a stunt or a tax holiday. This will be a permanent, recurring tax reduction. This will be the largest state tax cut in the history of Florida. If we are successful, we will become the ONLY state in the history of the United States of America to permanently reduce its sales tax."

Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek: "Florida is facing some economic challenges. After years of seeing continuous growth during and immediately after the pandemic, the state's residents are now facing cost-of-living challenges, from rising insurance rates to property tax increases to other jumps in daily expenses."

Kevin Thompson, a finance expert and the founder and CEO of 9i Capital Group, told Newsweek: "This new tax proposal introduces a significant revenue reduction, which would likely require adjustments to that framework. I would expect state lawmakers to revisit the budget projections to account for the potential drop in revenue."

What Happens Next

While the new tax proposal shows the state government's attempt to lower the Florida cost of living, the state could see its public services impacted by the loss of state revenue.

"The state's government is attempting to be proactive in this regard, attempting to drop the sales tax rate and save taxpayers money on the front end of purchases," Beene said.

"Being a non-income tax state, though, Florida relies on sales tax dollars to fund many public services, and obviously the fear is this tax cut could lead to some services being scaled back. Only time will tell if the tax cut will ultimately produce more or less revenue."