Fairness amendment

Florida's sales tax law contains so many loopholes that the number of exempted items has grown over the years.


Published: Friday, January 30, 2004 at 6:01 a.m.
Last Modified: Thursday, January 29, 2004 at 10:50 p.m.
There's another citizens petition going around to amend the state constitution, and, once again, one is circulating because the Florida Legislature is too timid (or too reluctant to offend lobbyists) to do its job.
The proposed amendment addresses the plentiful exemptions the Legislature has added to the sales tax over the years. Some, like those for food and prescription drugs, are understandable and are used almost daily by everyone.
Others were put there because of political pull: Super Bowl tickets are exempt from the sales tax (a $1.1 million revenue loss for the 2001 game), and so are fishing trips taken on a charter boat ($38.5 million), stadium skyboxes ($700,000), dry cleaning ($75 million) and courier services ($157 million).
There are so many loopholes that the sales tax omits more revenue than it produces - $25 billion vs. $18 billion.
"It's just not fair," said John McKay, former president of the Florida Senate, who tried to address the exemptions before he left office in November 2002.
McKay, a Bradenton Republican, has sought to reduce the sales tax from 6 percent to 4 percent, but make up for the lost revenue by eliminating the exemptions special interests had gotten over the years.
Under his earlier proposal, nearly all exemptions, except for food and medicine, would end, and a special committee would recommend to the Legislature which ones should remain. The courts, however, decided that the referendum question addressed too many issues.
McKay's current petition drive takes a simpler approach: The Legislature would be forced to re-examine exemptions periodically, and members would have to go on record as to which ones they support.
Exemptions would remain only if they received a three-fifths vote of the Legislature. New exemptions would face mandatory review when they have been in place for 10 years.
"The outcome of that effort will be to broaden the sales tax base, because there are a lot of exemptions that shouldn't be around anymore," McKay said.
There are more than 400 sales tax exemptions. As a result, the sales tax, which included 72 percent of purchases in 1970, now affects only 57 percent of today's transactions.
Former state Comptroller Bob Milligan, who is helping McKay (along with former state Sen. Jack Latvala), said the state "would be making absolutely no sense if we did not review the tax exemptions," but while everybody can agree with that, "getting them [legislators] to do it is the challenge."
There are still hundreds of thousands of signatures to gather before the issue is approved for the ballot - but enough have been collected to take the next step: a review of the ballot language by the Florida Supreme Court.
Speaking to a symposium in Tallahassee this week, McKay said he's confident the amendment will pass both the court review and the November ballot.
The protectors of the present tax breaks in the Legislature - and there are many - try to portray the attempt to bring some fairness to the sales tax as a back-door way to raising taxes.
McKay points to two glaring inequities with exemptions to put the issue back on track: He notes that exemptions penalize many families while giving a few that are well-off a break.
Cat food for the family pet is taxed, but food for racing animals is not. A fishing rod and reel is taxed, but a charter-fishing trip isn't.
His committee is called "Floridians Against Inequitable Rates," or FAIR.
Too bad most legislators prefer to be unFAIR.

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