The Florida Department of Revenue (FLDOR) recently issued TIP 24A01-15, notifying Florida businesses of a temporary sales tax reduction in Hillsborough County. Effective January 1, 2025, the total tax rate will decrease by 1%, adjusting the rates as follows:
- 6.5% for sales of tangible personal property (TPP) and taxable services
- 2.5% for commercial leases
Why the Change?
This temporary tax adjustment is designed to reimburse taxpayers for the unconstitutional 1% transportation sales tax increase implemented between January 1, 2019, and March 15, 2021. The tax was invalidated by the Florida Supreme Court in Robert Emerson, et al. v. Hillsborough County, Florida, etc. et al., No. SC2019-1250, which ruled that the increase violated constitutional spending provisions.
The court’s decision has prompted efforts to rectify the over-collected funds, and this rate reduction is part of those measures.
What Businesses Need to Know
Businesses operating in Hillsborough County must prepare to adjust their tax systems to reflect the new rates starting January 1, 2025. This includes:
- Updating point-of-sale (POS) systems to apply the correct rates for TPP, taxable services, and commercial leases.
- Informing accounting teams and service providers about the changes to ensure accurate reporting and remittance.
- Reviewing any pre-existing contracts to account for the updated tax rate in pricing.
Implications for Consumers
Residents and businesses in Hillsborough County will benefit from lower costs on purchases and leases during the temporary rate reduction.
For more details, you can refer to the FLDOR’s official announcement or the Florida Supreme Court case here.
Do you need help navigating these changes? Hancock Askew is here to assist. Reach out to Brandon McCafferty, our State and Local Tax Senior Manager, for guidance on compliance and financial planning related to these tax adjustments.
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