House Speaker Daniel Perez is pushing for a significant state sales tax reduction, aiming to lower the state’s rate from 6% to 5.25%, cutting nearly $5 billion in annual revenue.

Perez, R-Miami, directed Ways & Means Chairman Wyman Duggan, R-Jacksonville, to introduce a bill next week to implement the cut. He emphasized that this is a permanent measure, not a temporary tax break.

“This will not be a stunt or a tax holiday. This will be a permanent, recurring tax reduction,” Perez stated.

The move comes as Perez and Senate President Ben Albritton, R-Wauchula, stress the need to curb spending, particularly as federal COVID-19 relief funds have dried up. Perez linked the tax cut to efforts in reducing state agency expenditures.

“We cannot spend our way out of a spending problem. We must remove the temptation to spend,” he said.

As lawmakers work on the 2025-2026 budget, the House and Senate must negotiate final spending plans. Albritton’s spokesperson, Katie Betta, affirmed that both leaders share concerns over recurring expenditures and are committed to broad-based tax relief.

“The Senate budget prioritizes tax cuts, debt repayment, and reserves while reducing per-capita spending,” Betta noted.

Florida, which lacks a state income tax, relies heavily on sales tax revenue to fund essential services like education, healthcare, and corrections. Many counties impose additional discretionary sales taxes, further affecting local rates.

Perez’s proposal follows calls from Gov. Ron DeSantis and other lawmakers to lower or eliminate property taxes—an idea critics argue could necessitate higher sales taxes to offset lost revenue.

In his budget proposal, DeSantis suggested $2.2 billion in tax cuts, including eliminating the commercial lease tax over two years and reinstating sales tax holidays on school supplies, recreational items, hurricane supplies, and firearms.

House and Senate leaders are expected to negotiate a tax-cut package as part of budget talks. Perez previewed the House’s spending plan, which he said would be lower than the current $116.5 billion budget and DeSantis’ proposed $115.6 billion for 2025-2026.

“For the first time since the Great Recession, we will roll out a budget that spends less than the prior year,” Perez said, dismissing concerns from special interest groups.

Shortly after his announcement, the House unanimously voted to override four of DeSantis’ budget vetoes totaling $4.74 million. It remains unclear whether the Senate will follow suit.

The vetoed projects include:

• $140,000 for the Florida Senior Veterans in Crisis Fund
  
• $2.5 million for a Rockledge water-treatment project
  
• $1 million for an automated staffing system
  
• $1.1 million for a Baldwin sewer and water project
  

Albritton is reviewing whether the Senate will take up these overrides. Last month, the Legislature also overrode DeSantis’ veto of $57 million for legislative support services—the first such action during his tenure.

Following that veto, lawmakers had to tap into reserves to maintain operations and avoid job losses.

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(Image credit: Tax Foundation)

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