Florida tax relief act includes numerous new tax exemptions, holidays

On May 25, 2023, Gov. Ron DeSantis signed H.B. 7063, providing for $1.3 billion in tax relief to Florida residents. Combined with other legislation passed this session, the overall tax savings could pass $2 billion. Highlights of the newly enacted law include (but are not limited to): 

1. Reducing the sales and use tax rate on commercial (business) leases to 4.5% (from 5.5%) beginning December 2023 (with a further reduction to 2%, passed in the 2021 legislative session, expected to become effective in late 2024).
2. Delaying Florida’s motor fuel tax on natural gas to Jan. 1, 2026 (originally scheduled for Jan. 1, 2024).
3. A permanent sales tax exemption for the purchase of certain machinery and equipment used to produce, store, transport, compress, or blend renewable natural gas.
4. Permanent exemptions for purchases of certain oral hygiene products, firearm safety devices, adult incontinence products, and baby and toddler products such as cribs, playpens, strollers, and diapers.
5. A sales tax exemption from July 1, 2023, through June 30, 2024, on purchases of certain Energy Star-certified appliances, as well as gas ranges and cooktops.
6. Expansive expanded sales tax holidays.

The expanded sales tax holidays include exemptions for specific admissions and outdoor activity supplies from May 29 through Sept. 4, 2023; this three-month holiday is referred to as “Freedom Summer.” Certain purchases of admissions to live music events, sporting events, cultural events, specified performances, movies, museums, state parks, and fitness facilities are exempt from sales and use tax during the tax holiday period. Exempt outdoor activity item purchases (but not the rental of such items) include boating and water activity supplies and children’s athletic equipment and toys, among other defined items. 

Also included are an expanded sales tax holiday for back-to-school supplies and clothes; two sales tax holidays for disaster preparedness supplies; and one sales tax holiday for power tools and equipment commonly used in skilled trades. The first disaster preparedness holiday, which began on May 27 and runs for two weeks through June 9, includes exemptions for cleaning supplies and other household items, as well as pet supplies including pet food and medications.

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