Hurricane Exemptions Successful; Sponsors Plan Expansion in 2006

Although Florida’s sales tax exemptions on hurricane supplies ended with no guarantees of reoccurring next year, they were so popular that legislators responsible for the event have pledged to increase tax-exempt items in 2006 to include plywood and hurricane shutters.

Florida retailers, including Lowe’s Home Improvement Warehouse and Home Depot, reported record sales during the tax holiday. Lowe’s spokeswoman Jennifer Smith said it sold more than 28,000 generators.

Dave Bruns, a spokesman for the Florida Department of Revenue, which administers the state’s sales tax, said the agency won’t receive sales tax data from June until at least mid-July. He said the agency will bring some consumer complaints about the tax holiday to legislators’ attention next year. Some of the issues raised by consumers include a shortage of portable generators at hardware stores and why shutters and plywood weren’t on the tax-exempt list.

State Sens. Walter “Skip” Campbell Jr., D-Tamarac, and Carey Baker, R-Eustis, co-sponsors of the Senate bill that created the holiday, told the Tampa Tribune that so many people took advantage of the tax exemption that they expect the Legislature to quickly pass it again next year.

Baker would have preferred more items on the tax-exempt list. However, there was debate about how much the tax holiday cost the state and local governments in lost tax revenue. Legislators tried to limit the financial hit by limiting the list of items. This year’s tax holiday is expected to cost the state and local governments about $10 million in lost sales taxes.

Campbell said legislators left plywood off the tax-exempt list because of concerns that building contractors might buy up loads of plywood for new construction, rather than for hurricane preparations. Placing a cap on how much plywood a single person could buy tax-free would prevent such abuse, but this year retailers didn’t have a good system for implementing a cap, Campbell said.

Next year, Campbell hopes plywood will be added to the tax-exempt list, along with other items such as extension cords and hurricane shutters, both installed by professionals and by do-it-yourselfers. The cost of having shutters professionally installed costs $2,500 to $3,000 for an average home, according to a representative of Gator Shutters Hurricane Protection Systems in Tampa.

In a related story, after seeing how successful Florida was with its tax holiday, Georgia legislators have also been considering the implementation of a similar program they hope will pass as soon as possible.