Florida Gov. Ron DeSantis Signs 2023 Tax Bill into Law

Holland & Knight LLP

Holland & Knight LLP

Florida Gov. Ron DeSantis signed House Bill (HB) 7063 into law on May 25, 2023, providing short-term and long-term tax relief for Florida taxpayers. The legislation provides approximately $1.3 billion in tax breaks to Florida taxpayers. However, when combined with other enacted legislation from this most recent Florida legislative session, DeSantis has signed more than $2 billion in tax relief.

Florida Tax Holidays

The new legislation provides for two short-term tax holidays, the first from July 24 through Aug. 6, 2023, and the second from Jan. 1 through Jan. 14, 2024, for tax relief related to back-to-school shopping. Certain clothing, footwear and school supplies, among other items, will be exempt from Florida sales tax during these periods.

The legislation further provides for two 14-day "disaster preparedness" sales tax holidays, the first of which runs from May 27 through June 9, 2023, and the second taking place from Aug. 26 through Sept. 8, 2023. During these holidays, items such as flashlights, coolers, power banks, batteries and other emergency preparedness items are exempt from Florida sales tax.

There is also a one-year sales tax exemption from July 1, 2023, through June 30, 2024, on the sale of gas ranges and cooktops, and certain energy efficient appliances.

The legislation also provides for a "Freedom Summer" tax holiday that includes a sales tax exemption from May 29 through Sept. 4, 2023. During that time, purchases of tickets to music, sporting and cultural events, among other tickets, are not subject to Florida sales tax, so long as they are for events being held through the end of 2023. Further, some boating and water activity supplies, camping, fishing and outdoor supplies, children's toys, athletic goods and other items will not be subject to Florida sales tax during that time.

Reduction in the Florida Sales Tax Rate on Commercial Leases of Real Property

Florida is one of the few states that assesses sales tax on commercial leases of real property. The current Florida sales tax rate on such leases is 5.5 percent. However, this new legislation cuts the Florida sales tax rate on commercial leases from 5.5 percent to 4.5 percent as of Dec. 1, 2023. It should be noted that previous legislation provided that the commercial sales tax rate would be reduced to 2 percent once the Florida Unemployment Compensation Trust Fund has been replenished to pre-COVID-19 levels.

Permanent Florida Sales Tax Exemptions

Finally, the legislation provides for a permanent Florida sales tax exemption for certain baby and toddler products such as baby cribs, baby monitors, baby clothing and strollers. Furthermore, diapers, oral hygiene products and firearm safety devices are also permanently exempt from Florida sales tax as a result of the legislation.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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