This article is part three of a three-part article on Florida’s 2024 sales and use tax law changes. Parts one and two discussed some changes and some continuations to prior year exemptions. The below article wraps up the series to review some renewals of exemptions allowed for prior years. It is important for business owners to read all three articles to know exactly what to expect for the upcoming year.
Once again, the “back to school” sales tax holiday has been renewed. Different from previously, the holiday is back to just one time in the summer instead of another exemption period in December/January. If purchased from July 29, 2024, through August 11, 2024, the following will be exempt:
- Clothing, wallets, or bags, including handbags, backpacks, fanny packs, and diaper bags, but excluding briefcases, suitcases, and other garment bags, having a sales price of $100 or less per item. "Clothing" means:
- Any article of wearing apparel intended to be worn on or about the human body, excluding watches, watchbands, jewelry, umbrellas, and handkerchiefs; and
- All footwear, excluding skis, swim fins, roller blades, and skates.
- School supplies having a sales price of $50 or less per item. “School supplies" means pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, binders, lunch boxes, construction paper, markers, folders, poster board, composition books, poster paper, scissors, cellophane tape, glue or paste, rulers, computer disks, staplers and staples used to secure paper products, protractors, and compasses.
- Learning aids and jigsaw puzzles having a sales price of $30 or less. As used in this paragraph, the term "learning aids" means flashcards or other learning cards, matching or other memory games, puzzle books and search-and-find books, interactive or electronic books and toys intended to teach reading or math skills, and stacking or nesting blocks or sets.
- Personal computers or personal computer-related accessories purchased for noncommercial home or personal use having a sales price of $1,500 or less.
- "Personal computers" includes electronic book readers, calculators, laptops, desktops, handhelds, tablets, or tower computers. The term does not include cellular telephones, video game consoles, digital media receivers, or devices that are not primarily designed to process data.
- "Personal computer-related accessories" includes keyboards, mice, personal digital assistants, monitors, other peripheral devices, modems, routers, and nonrecreational software, regardless of whether the accessories are used in association with a personal computer base unit. The term does not include furniture or systems, devices, software, monitors with a television tuner, or peripherals that are designed or intended primarily for recreational use.
As before, sales of these items in a theme park or entertainment complex, public lodging establishment, or airport do not qualify for the exemption. Additionally, sellers will have the ability to “opt out” of providing this exemption. If less than 5 percent of the seller’s gross sales of tangible personal property in the prior calendar year consisted of items that would be exempt under this exemption, the seller may choose not to participate in the tax holiday. To “opt out,” the seller must notify the Department of Revenue in writing of its election to collect sales tax during the holiday by July 15, 2024. Moreover, the seller must post a copy of a notice of non-participation in a conspicuous location at its place of business.
The “Tool Time” sales tax holiday is back! From September 1, 2024, through September 7, 2024, the sales of certain items will be exempt from sales tax in Florida. Like the other temporary sales tax exemptions, sales in a theme park or entertainment complex, public lodging establishment, or airport will not qualify to be exempt. Below is a list of exempt tools.
- Hand tools with a sales price of $50 or less per item.
- Power tools with a sales price of $300 or less per item.
- Power tool batteries with a sales price of $150 or less per item.
- Work gloves with a sales price of $25 or less per pair.
- Safety glasses with a sales price of $50 or less per pair, or the equivalent if sold in sets of more than one pair.
- Protective coveralls with a sales price of $50 or less per item.
- Work boots with a sales price of $175 or less per pair.
- Tool belts with a sales price of $100 or less per item.
- Duffle bags or tote bags with a sales price of $50 or less per item.
- Tool boxes with a sales price of $75 or less per item.
- Tool boxes for vehicles with a sales price of $300 or less per item.
- Industry textbooks and code books with a sales price of $125 or less per item.
- Electrical voltage and testing equipment with a sales price of $100 or less per item.
- LED flashlights with a sales price of $50 or less per item.
- Shop lights with a sales price of $100 or less per item.
- Handheld pipe cutters, drain opening tools, and plumbing inspection equipment with a sales price of $150 or less per item.
- Shovels with a sales price of $50 or less.
- Rakes with a sales price of $50 or less.
- Hard hats and other head protection with a sales price of $100 or less.
- Hearing protection items with a sales price of $75 or less.
- Ladders with a sales price of $250 or less.
- Fuel cans with a sales price of $50 or less.
- High visibility safety vests with a sales price of $30 or less.
Last but not least, there is a change to the state sales tax rate on commercial rentals. Based on a 2021 law, the sales tax rate for real property commercial rentals was set to change from five and one-half percent (5.5%) to two percent (2.0%). Effective June 1, 2024, the state sales tax rate has officially changed. Of important note, the county sales tax rate still remains in effect.
In conclusion, there have been a decent amount of changes to Florida sales and use tax law that business owners must be aware of. For vessels and aircraft, there was a change to the nonresident purchaser exemption form requirements. Motor vehicles also saw a change in what could possibly be exempt. Boats and trailers are now considered a “single item” for county surtax purposes. How invalidated county surtaxes are dealt with and could be refunded was also discussed. An automated ten-day extension to file sales and use tax returns can occur, if certain criteria are met. There is the new childcare credit, which requires careful examination to determine whether said business qualifies. The Florida Department of Revenue can now consider requests to settle a liability or refund claim when the business misses the deadline to fight it, but only in limited circumstances. Disaster preparedness, Freedom Month, Back to School, and the Tool Time sales tax holidays have all been renewed for another year. Keeping all of this in mind will be critical for businesses to be able to know what to do, when to do it, and sometimes how to do it. If not, then the business could find it is charging sales tax on items its competitors are legally not charging sales tax on, which leaves the business at a competitive disadvantage. What the next legislative session will bring is anyone’s guess. However, it is safe to say what we have in front of us now is more than enough to deal with for the time being.
About the author: David Brennan is partner with Moffa, Sutton, & Donnini, P.A. His primary practice area is multistate tax controversy. David received a B.S. in Accounting and Finance, with a minor in Computer Science, from Florida State University. He worked as an accountant for a CPA firm before attending law school at Regent University. He received his Juris Doctor in 2013 and was licensed to practice law in Florida in the same year. In 2015, David earned his Masters of Laws in Taxation from Boston University. While working for the Florida Department of Revenue as a Senior Attorney, David focused on various sales and use tax issues. You can read his BIO HERE.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Contact us for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
AUTHORITY
Chapter 2024-158; House Bill 7073
ADDITIONAL RESOURCES
2024 FLORIDA SALES TAX UPDATE PART II, published June 18, 2024, by David J. Brennan, Jr., Esq.
2024 FLORIDA SALES TAX UPDATE PART I, published June 13, 2024, by David J. Brennan, Jr., Esq.
2023 FLORIDA SALES TAX UPDATE PART II, published August 14, 2023, by David J. Brennan, Jr., Esq.
2023 FLORIDA SALES TAX UPDATE PART I, published July 5, 2023, by David J. Brennan, Jr., Esq.
FLORIDA SALES TAX AUDITS PROCESS AND TRAPS, published March 4, 2023, by David J. Brennan, Jr., Esq.
2023 FLORIDA SALES TAX RATE ON COMMERCIAL RENT, published January 23, 2023, by James Sutton, CPA, Esq.
PHONE CALL FROM FLORIDA DEPARTMENT OF REVENUE: SALES TAX, published October 15, 2022, by Jeanette Moffa, Esq.
FLORIDA SALES TAX INFORMAL WRITTEN PROTEST, published November 17, 2018, by James Sutton, C.P.A., Esq.
FLORIDA SALES TAX - VOLUNTARY DISCLOSURE PROGRAM, published April 9, 2018, by Jeanette Moffa, Esq.