TALLAHASSEE -- Florida legislators agreed yesterday to repeal as of Jan. 1 an unpopular 5 percent service tax that created an uproar among advertisers, angered voters and politically damaged many state leaders.
The lawmakers also agreed to raise the state sales tax on goods from 5 to 6 percent beginning Feb. 1, adding $1.2 billion a year to state revenues, about the same amount the tax on services would have raised.
State budget chief Glenn Robertson said the additional sales tax would cost the average Florida family $185 a year, compared with a first-year service tax burden of $75.
Gov. Bob Martinez (R), who watched his popularity plummet because of his early support of the levy and a later reversal, is expected to sign the bill today.
The tax was particularly unpopular with major corporations, which waged an advertising boycott and television campaign condemning it. State officials estimated that Florida lost $35 million in convention business and tens of millions of dollars in advertising as a result.
Legislators asserted that the service tax was needed to broaden Florida's revenue base and pay for needed programs. Florida is still considered a tax haven. There is no state income tax; there is a constitutional cap on property taxes, and homeowners enjoy a $25,000 property tax exemption.
The tax on services had been in effect since July 1.