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Florida tax updates

23 Jul 2014

Florida has been active in making changes in an attempt to become more competitive in attracting and retaining businesses. Taxand USA takes a look at major tax changes that have become effective during recent months.

Florida legislators have trimmed approximately $135 million in taxes on a recurring and non-recurring basis. Most notably HB 5601 clarified the statutory definition of “prepaid calling arrangement” to provide that certain prepaid mobile communications services are subject to state and local sales taxes instead of communications services taxes. Consequently the sale or recharge of a prepaid calling arrangement will be treated as a sale of tangible personal property subject to sales and use tax. Clarifying the tax treatment of prepaid calling arrangements should provide taxpayers with relief by shifting the imposition of certain prepaid calling arrangement services from the Florida communication services tax to Florida sales tax.

Florida has one of the highest tax rates on communication services in the nation and the tax rate (which can exceed 16% including the local tax) is approximately double the sales tax rate on other retail purchases in Florida. As part of the state commitment to attract and retain business the bill provided tax incentives that allow taxpayers to take a tax credit against the corporate income tax or insurance premium tax or as a refund on sales tax collected.

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Benjamin Diaz
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Also published in Thomson Reuters' Taxnet Pro, 24 July 2014

Taxand's Take

Florida is turning the page and benefiting from a balanced budget. To continue to incentivise growth and maintain current business Florida’s governor and legislators believe that certain changes to Florida’s law should be enacted. It is important to be familiar with the evolving Florida tax law in order to take advantage of these incentives.  

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