Florida Governor's Communications Services Tax Cut Proposal Moving Ahead as Session Begins
Florida Gov. Rick Scott’s legislative proposal to substantially cut the state’s communications services taxes appeared to be well on the road to passage when the Florida Legislature convened Tuesday, with state observers telling us the proposal hasn’t encountered any opposition. The Republican governor proposed the tax cut, which would reduce revenue by $470 million, in late January (see 1501200064). Scott again pushed for the tax cut Tuesday during his state of the state address, saying the cut would save every Florida family around $43 per year if they spent a minimum of $100 per month on wireless and TV services. The tax cut is one of several communications and Internet-related bills the Florida Legislature will consider during this year’s session, which is to run through May 1.
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Scott’s proposal is under consideration in the state Senate as SB 110, which as amended would reduce Florida’s communications services tax on cable TV, cellphone and nonresidential wireline bills by 3.6 percentage points to 3.05 percent. SB-110 would also reduce the state’s tax rate on satellite TV services by 3.6 percentage points to 7.2 percent. The bill would reduce the state’s portion of revenue from the taxes to maintain local governments’ current revenue. The tax cuts would take effect July 1. Changes in the distribution of revenue from the satellite TV tax would take effect Aug. 1, while some changes in distribution of the communications service tax would take effect Sept. 1. Florida’s communications services tax rate now is 9.17 percent when combined with the state’s gross receipts tax, while the satellite TV tax is 13.17 percent when combined with the gross receipts tax. Local governments’ additional 7.12 percent tax rate on cable, wireless and wireline services is unaffected by the bill. The MyWireless industry group ranked Florida’s combined state and local wireless tax rate in July the nation’s fourth highest, behind Washington, Nebraska and New York.
State Sen. Dorothy Hukill, a Republican, officially introduced SB 110 Tuesday, but the bill already had received the backing of the Senate Communications, Energy and Public Utilities Committee. The committee unanimously approved an amended version of the bill Feb. 17, with five of the committee’s six Republicans and two of the committee’s three Democrats voting in favor. Committee Chairwoman Denise Grimsley, a Republican, and State Sen. Joseph Abruzzo, a Democrat, were absent from the meeting. The Florida Senate’s Appropriations and Tax committees also have jurisdiction over SB-110, but neither has considered the bill.
Scott’s proposal is unlikely to encounter major opposition on its merits, but may battle with other proposed tax cuts for priority, said Florida Cable Telecommunications Association General Counsel Charles Dudley. “There’s a limited amount of money available for tax cuts” because of the state’s constitutional mandate to have a balanced budget, so the communications services tax cut would “compete against all the other tax cut ideas out there,” he told us. The FCTA strongly supports the tax cut because it would “give money back” to customers of the group’s member companies, Dudley said.
A smaller version of Scott’s proposed cut is “a pretty good bet,” but enacting the full $470 million in cuts could prove difficult because of the competing cut proposals, said Florida TaxWatch Vice President-Tax Research Kurt Wenner. The legislature is also contending with the potential for a significant decline in federal Medicaid funding to the state because of Scott’s refusal to extend Florida’s Medicaid program to 1 million uninsured residents to comply with the Affordable Care Act, Wenner said. “If that happens, money’s going to be a bit scarcer,” he said. Florida TaxWatch said in February that it supports the tax cut because it would impact the “vast majority of Floridians and businesses.” The cut “also has the potential of attracting more investments in telecommunications infrastructure,” the group said.
The Florida House and Senate are considering identical versions of the True Origin of Digital Goods Act (HB 271 and SB 604), which would require the owner or operator of any website that disseminates “commercial” digital media content to Florida consumers to disclose his legal name, physical address, telephone number or email address. The bills exempt service providers hosting or transmitting third-party content, in line with the Communications Decency Act. The bills also exempt digital material that excerpts less than “substantially all of a recording or audiovisual work.” The House’s Business & Professions Subcommittee was to consider HB 271 late Tuesday. The House Regulatory Affairs Committee and Civil Justice Subcommittee also have jurisdiction over the bill. The state Senate Commerce Committee unanimously approved SB 604 Monday, and the Appropriations and Judiciary subcommittees are also set to consider the bill. The Electronic Frontier Foundation (EFF) criticized the True Origin of Digital Goods Act Monday as a “dangerous anti-anonymity bill” that “raises a serious First Amendment problem.” Police and the entertainment industry have abused similar laws elsewhere, and the bill “could be used to unmask anonymous bloggers, vidders, or musicians who primarily put their own work online if even one recording or video belonging to someone else appears on their site -- or perhaps even a link to someone else’s work,” EFF said.