September 8, 2000

Tax Policy

Holland & Knight Newsletter
Eddie Williams III

The primary purpose of taxes is to raise revenue to pay for governmental services. The combination of all taxes imposed by a government is its tax structure. Florida has over thirty types of taxes, many of which interact with each other and with federal and local taxes. Together, these state taxes determine the total state tax burden faced by each Florida taxpayer, as well as the amount of revenue available to implement state programs. In order to understand the total tax burden, it is important to evaluate tax structures as well as individual taxes to make sure that they fall under sound tax policy.

Legislative Change:

House Bill 1535 (HB 1535), prefiled 2/25/00, created the State Tax Reform Task Force to examine the state’s tax structure and make recommendations to the Governor and the Legislature on how the state’s tax structure can be improved to ensure a stable revenue base that is adequate to fund the needs of the state. The Senate Fiscal Resource Committee and the House Finance and Tax Committee will provide administrative staff for the task force.

The task force shall examine the state’s tax structure to evaluate whether it is adequate for supporting the continuing needs of the state. The task force shall consider the following in its evaluation: (a) Standard principles of sound tax policy; (b) How other states treat the same or similar tax issues; (c) Whether the base of the tax system is as broad as possible, so that tax rates and burdens are as low as possible; (d) Whether tax exemptions are consistent with state tax policy and the economic impact of each exemption. In addition, the task force shall provide an analysis of alternative tax sources.

By February 1, 2001, the task force shall submit an interim report and by February 1, 2002, shall submit a final report to the Governor, the President of the Senate, and the Speaker of the House of Representatives. Authorization for the task force expires June 30, 2002. These provisions took effect upon June 5, 2000.

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