TAXATION
LEGISLATION THAT PASSED
Tax Package (HB 7031E) – Due to the stalemate on the state budget, the Legislature did not finish the new tax package during the regular session either. The House and Senate each had their own tax relief bill, relatively modest ones when compared to recent years. The Senate proposed only $80 million in relief, the House package came in at a little over $300 million. They shared a few provisions and were also similar in that most of the tax relief was non-recurring and most of revenue impact was on local government. Both bills also had several property tax and tax administration provisions. The bills were placed in conference, to be finalized in a special session along with the budget.
The result was a $203 million tax package, which retained most of the characteristics mentioned above. Much of the tax savings are non-recurring, including four that will last two or three years. Only about half is recurring. And most of that is local ($74.9 million). (See Total Tax Savings table below).
The largest tax cut is a property tax assessment cap (3 percent, the same as Save Our Homes) for mobile homes in long-term parks, which will save $65.2 million annually. The two largest state tax cuts are a sales tax exemption for home hardening products ($45.3 million state and $12.7 million local) and a four-month sales tax holiday for hunting, fishing, and camping supplies ($32.2 million state and $9.1 local). Other cuts include a sales tax exemption for tickets to certain tennis tournaments (Miami Open) and reduction in the tax on slot machines and cardrooms.
Several of the provisions in the original House and Senate tax packages did not make it into the final bill, including a tax discount for domestic beer, sales and property tax exemptions for Space Florida, and an exemption for surplus lines flood insurance.
For all the provisions in final tax package, and what did not make it, see this analysis.
Interest Accrual on Refunds (HB 7031E) – There are also some good tax administration provisions in the tax package, the best of which is a long overdue improvement in the Department of Revenue’s process for paying interest on refunds. This provision requires interest to begin accruing on overpayments of taxes on the 91st day after the refund application was postmarked or electronically submitted. It also removes the requirement that the application must be “complete,” something many taxpayers perceived as a tool used by the Department to delay the start of interest accruing. Florida TaxWatch has worked for years to bring fairness to the Department of Revenue’s process for paying interest on refunds, which makes it difficult for many taxpayers to recover interest. It is likely that the estimate below is quite understated.
Corporate Income Tax Piggyback – One tax issue that the House and Senate agreed on in the regular session is that the many federal corporate income tax cuts in the One Big, Beautiful Bill Act (OBBBA) will not extend to Florida companies’ state tax returns. Each year, the Legislature passes a CIT “piggyback” bill to adopt the latest federal tax code, conforming Florida law to federal law. Federal taxable income is the starting point for Florida corporations to calculate their state tax liability. This makes administration and compliance easier for both the taxpayer and the taxman. Sometimes, the bill will “decouple” with specific federal changes that would have a large impact on state revenue. The federal One Big Beautiful Bill Act (OBBBA), passed into law in July 2025, contains several provisions that reduce corporate income taxes. These include making 100 percent bonus depreciation permanent, allowing immediate expensing of research and development costs, and providing a more generous limitation for interest deductions. Adopting all of the changes this year would cost Florida $3.5 billion. Instead, both the House (HB 7031) and the Senate (SB 7048) are proposing to decouple from everything, but the Senate was going to let taxpayers spread the benefit of some provisions over seven years. The Senate passed a delete-all amendment to the House tax package (HB 7031), replacing its language with only the piggyback language. The House and Senate were aligned, meaning a total decoupling from all provisions and Florida companies will receive no state level benefit from the OBBBA. The House accepted the Senate amendment and passed HB 7031, keeping this issue out of conference.
Special Assessments on RV Parks – SB 118 prohibits levying a non-ad valorem special assessment at a recreational vehicle (RV) park levy against the portion of each parking space or campsite that exceeds the maximum square footage of specified RV-type units. Local governments levying the assessment must consider the occupancy rates of the RV park to ensure fair and reasonable apportionment of the special assessment among the RV spaces receiving the special benefit. The House amended the Senate bill with language that was identical to the original Senate bill. The Senate concurred.
LEGISLATION THAT DID NOT PASS
Space Florida Tax Exemptions – HB 1177 originally proposed creating a sales tax exemption for tangible personal property, including machinery and equipment, that is leased by Space Florida to private entities. The bill also included defense or aerospace use under the definition of “governmental purpose” for property tax exemptions, covering private lessees operating through Space Florida. In Week 6, the sales and property tax exemptions were amended out, and other provisions were added (see Economic Development section). However, the House tax package (HB 7031) included the tax exemptions for Space Florida. Florida TaxWatch released a report detailing how under Space Florida’s leadership, Florida’s Space Coast has transitioned from a government complex to a vibrant commercial, market driven enterprise that can also support federal government missions. The report concludes that Florida’s Space Coast is well-positioned to dominate the future of the aerospace industry. However, these exemptions were left out of the final tax package.
Tax Credits for Contributions to Assist Homebuyers – SB 1672 and HB 311 would have created a new tax credit for employers who contribute to their employees’ homebuying expenses. The bills allow a 100% tax credit against corporate income or insurance premium taxes for employer contributions to down payment or closing costs, capped at $5,000 per employee. SB 1672 also allows credits for contributions to state-approved down payment programs. HB 311 made it to second reading. In addition, House tax package (HB 7031) also contained the exemption, but this provision did make the final bill.
Taxation of Electronic Vehicle Charging Stations – SB 680 would have exempted the sale of electricity from a utility to an electric vehicle charging from both sales tax and gross receipts tax, including electricity used for supporting equipment and infrastructure. The sale of electricity from an electric vehicle charging station to an electric vehicle consumer remains taxable under the bill. SB 680 died in the Appropriations Committee, but a similar provision regarding charging station taxes was in the original Senate tax package. See this Florida TaxWatch report on the growing impact of electric vehicles on Florida’s transportation funding model.
Local Business Tax Repeal – HB 103 and SB 122 would have repealed the authority for cities and counties to levy local business taxes, which is a tax on the privilege of operating a business in a government’s jurisdiction. These taxes currently provide $189 million annually to local governments. Both bills would have allowed local governments that continue to levy a business tax on gross receipts to continue doing so. Only Panama City and Panama City Beach have such a tax. HB 103 was approved by the full House. SB 122 passed one committee.
Research & Development Tax Credit – HB 847 and SB 1076 would have increased the cap on the total annual amount of Research and Development Tax Credits from $9 million to $50 million. Florida TaxWatch has long supported increasing the cap. There have been some past increases, but they have only been temporary. This session, SB 1076 was approved by the Commerce and Tourism Committee. Similar legislation last session also cleared a committee but then stalled.
Sales Tax Exemption for Vertiports – HB 1093 promotes advanced air mobility–aircraft that are highly automated, electrically powered, and have vertical take-off and landing capability. HB 1093 and SB 1362 originally provided a sales tax exemption for the aircraft, batteries, training devices, and electricity used for training. Both bills were pared down considerably, including removing the exemption. HB 1093, with provisions to promote vertiports, but with no tax exemption, did pass (see Transportation section).
Food Wholesalers M&E Sales Tax Exemption – HB 723, the House rural development bill (see Economic Development section) contains a sales tax exemption for industrial machinery and equipment used by food wholesalers in fiscally constrained counties. This bill was not heard, and the House did not take up the Senate rural development bill.
Heated Tobacco Products – SB 754 and HB 377 would exempt these products from tobacco taxes. This type of tobacco, used with an electronic device, does not burn or combust, so it does not produce smoke. While it produces fewer toxins, it is not without its own health concerns. Both bills passed one committee.
Tourist Development Taxes – Florida TaxWatch has warned of the “slippery slope” created when the Legislature adds additional authorized uses for this local sales tax surcharge revenue, diverting revenue from its original intended purpose—tourism promotion. Several recent sessions have resulted in expanding the uses of TDT revenue, including last year’s legislation that allows all coastal counties to use them for beach lifeguards and fiscally constrained coastal counties to use them for capital improvements to public buildings. This session, bills have been filed to reduce the percentage of TDT revenue required to be spent on tourism promotion from 40 percent to 20 percent (SB 458), eliminate any required promotion spending (SB 454/HB 6007), and add public safety and affordable/workforce housing (SB 456)and commuter rail (SB 976) to the allowable uses. None of these bills were heard in committee.
