The tax landscape has changed in the Tampa area.
Effective March 16, 2021, businesses in Hillsborough County, Florida are required to adjust the sales tax rate charged on goods and taxable services to 7.5%. This is a one-percent decrease from the 8.5% that had been in place since January 2019, previously the highest rate in the state of Florida.
The rate reduction is a result of the Florida Supreme Court decision on February 25th that declared the additional 1% tax illegal. The tax, although passed by the voters in 2018, was declared unconstitutional because the spending allocations of the additional tax were not made by the elected Hillsborough County Commissioners, but by a group of private citizens.
Tax receipts collected by businesses since February 25th must still be remitted by taxpayers. The Florida Department of Revenue will handle the distribution of the tax as it always has back to the county.
Going forward, businesses need to correct the rate that they are charging to customers as well as use tax paid directly on certain purchases. This may entail contacting a third-party provider to update the rate calculation in their automated systems.
As for the more than $503 million in illegal sales tax collected since January 1, 2019, it is unclear what the process will be to return that tax to taxpayers. Further guidance and information is expected from the Department of Revenue and Hillsborough County.