After nearly 10 months of hard work, members of the Coalition to Protect Florida’s Economy, composed of the FICPA and other business groups, have succeeded in stopping an ill-considered plan by outgoing Florida Senate President John McKay to do away with potentially hundreds of sales tax exemptions, including those on accounting, real estate, legal and other services.

McKay’s bid to have voters force the Legislature to take on his version of tax reform ended on Friday, Sept. 20, when the Florida Supreme Court refused to overturn a ruling from the First District Court of Appeal in Tallahassee that struck the measure from the November ballot.

In a 5-0 order, the Supreme Court let stand a Sept. 18 ruling by the appeals court that McKay’s proposed constitutional amendment had a misleading ballot summary, and that the amendment itself flouted basic principles of democratic government by concentrating power in the hands of a few elected representatives.

“Since the inception of this idea by Senate President John McKay, this proposal has been flawed. The Florida Legislature was brought to a screeching halt and called back to Tallahassee for two special sessions totaling 20 days over this issue,” said Lloyd “Buddy” Turman, FICPA CEO-Executive Director. “We have consistently argued that this proposed constitutional amendment is not the way to make substantive tax law changes.”

The proposed constitutional amendment would have created a group of 12 lawmakers charged with reviewing all $23 billion of the current Florida sales tax exemptions. A majority of the group – just seven members – would have had the authority to repeal any exemption. The full Legislature then would have had two years to vote to override the group’s decision, or it would become permanent. The governor would have no veto power over any decision made by the 12-member committee.

FICPA President Winston Howell also expressed his pleasure that the tax-review amendment has been taken off the ballot. “Our position consistently was to oppose the concept of seven members of the Legislature making substantive tax law changes with no real oversight,” Howell said. “Floridians should be given the opportunity to see the votes of all 160 members of the Legislature.”

McKay wielded his power in his final regular legislative session to pass the controversial measure, over the intense objections of business leaders and fellow Republicans Gov. Jeb Bush and House Speaker Tom Feeney.

But the ballot measure was a compromise.

McKay had originally proposed a state law that would have required lawmakers to repeal several billion dollars’ worth of exemptions, including those on accounting services, and then lower the overall sales tax rate from 6 percent to 4.5 percent. Though taxes would be paid on more things, the state would collect the same amount of revenue, at least for the first year, McKay said.

But the FICPA and other business groups, which banded together to challenge McKay’s compromise plan in court this summer, argued that based on the confusing ballot summary voters would not be voting on what they thought.

“Decisions on changes to Florida’s tax structure should be made by the full Legislature and a governor duly elected by the voters of Florida – not seven people,” Turman said. “We are very pleased the court has recognized these concerns and others, and are relieved to have this issue behind us.”

For more information, please e-mail the FICPA’s Governmental Affairs Department at govaffairs@ficpa.org, or call (850) 224-2727, Ext. 201.

To read previous items regarding the Amendment 5 court case, please click on the following links:

Senate Files Motions on Amendment 5

First District Court of Appeal Strikes Tax Exemption Amendment from November Ballot

Update on Challenge to Proposed Constitutional Amendment 5 (To Create a 12-Member Panel To Review All Florida Sales Tax Exemptions)