Phone, TV industry urge tax cut for Fla.
Published: Friday, January 12, 2007 at 6:01 a.m.
Last Modified: Thursday, January 11, 2007 at 11:17 p.m.
TALLAHASSEE — Florida lawmakers should lower taxes on telephone, cable television and other telecommunications services because they are among the nation's highest, industry officials said Thursday.
The House Utilities and Telecommunications Committee held a workshop on the issue, but no legislation yet has been introduced. But Associated Industries of Florida lobbyist Frank Meiners said a bill will be filed for a $167 million annual reduction in the sales tax part of the state's communications services tax.
The reduction would apply to all telecommunications except residential landline telephone service, which already is exempt from sales tax. Consumers would save, for example, 58 cents on a $50 monthly cell phone or cable TV bill, a reduction from $4.58 to $4.
The proposal would reduce the communications services tax from 9.17 percent to 8 percent. The current charge consists of a 6.8 percent sales tax and a 2.37 percent gross receipts tax. The latter, used to pay for school construction, would be unaffected.
"We just decided to take one little bite," Meiners told the committee.
He noted that reducing the tax is one of 100 ideas for legislative action compiled by House Speaker Marco Rubio, R-Coral Gables.
Gov. Charlie Crist, while running for election last year, advocated cutting the sales tax part of the communications services charge to 3 percent over three years, which he said would save Floridians $458 million.
Local telecommunications taxes, which are capped at 6.1 percent, would be unaffected by the legislation.
Florida's combined maximum state and local tax rate of 15.27 percent is third highest in the nation behind Nebraska and Washington state, cell phone industry economist Scott Mackey told the committee. Florida's maximum of 8.47 percent on residential wire telephone service ranks 14th.
Mackey said the industry's goal in Florida and other states is to get telecommunication taxes reduced to the same level as other goods and services. The general state sales tax is 6 percent. Local sales taxes range up to 1.5 percent.
That big of a cut, though, would cost state and local governments more than $1.2 billion a year.
Cutting telecommunications taxes would benefit consumers and businesses alike, Mackey said. He said the tax is regressive because low- and middle-income people pay a greater percentage of their incomes for telecommunications than wealthier consumers.
Telecommunications companies also would benefit because they should be able to increase their sales if they can offer lower rates, Mackey said.
Florida Association of Counties lobbyist Sarah Bleakley said her organization doesn't oppose the anticipated rate reduction legislation but that this is difficult year to seek tax cuts. State economists recently reduced their revenue estimate for the budget year beginning July 1.
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