With Legislature divided on taxes, advocates say Florida should look at corporations

With Americans observing Tax Day on Tuesday, a Florida Democrat joined with a progressive group at the Capitol to call for the Legislature to embrace a form of taxation known as “combined reporting” that they claim would move more than $2 billion into state coffers.

The call came as the House and Senate worked toward a major sales tax cut for Floridians this session, although they remain far apart in terms of the amount and how it would be distributed.

The Senate on Tuesday was poised to pass its $2.1 billion tax cut plan (SPB 7034), which features permanent elimination of taxes on most clothing and shoes priced $75 or less.

The measure also calls for the Office of Economic and Demographic Research to establish a plan to reduce and potentially eliminate property taxes for homesteaded property. The study would conclude later this year and, if legislators are persuaded by it, they would vote during next year’s legislative session to ask the voters to eliminate property taxes via the 2026 ballot.

That’s what Gov. Ron DeSantis began hyping earlier this year. But after House Speaker Daniel Perez announced last month his plan to permanently reduce the sales tax from 6% to 5.25% with an estimated savings of approximately $5 billion, DeSantis said the Legislature should spend that money on a property tax cut this year, giving an estimated 5.1 million residents who have a homestead exemption on their property taxes a rebate averaging $1,000 in December.

But neither the House nor the Senate has responded to that proposal, and it isn’t going anywhere this year. DeSantis has blasted the House proposal, saying he’d rather give a tax cut to Floridians and not to “Canadian tourists,” alluding to the fact that a sales tax would affect everyone who spent on items in Florida, such as tourists (who contributed about 16% of the sales taxes collected in the 2021-2022 fiscal year).

Targeting corporations

Meanwhile, during a press conference held in the Capitol Rotunda, Orlando Democratic Rep. Anna Eskamani and Jackson Oberlink with the group Florida For All called upon the Legislature to link whatever sales tax emerges this year with what is known as “combined reporting.”

Combined reporting is a tax accounting method that states can require multinational corporations to use when calculating how much they owe on their annual profits. It’s in place in 28 states.

“Our taxes should serve working families, not wealthy corporations,” said Oberlink, legislative director for Florida For All. “Right now in Florida, multinational corporations are treating our state like an all-you-can-eat buffet. Combined reporting would close the loopholes that let giant corporations shift profits to tax havens and dodge billions in taxes.”

Eskamani echoed Oberlink, and referenced a report issued Tuesday called “The Cost of Corporate Giveaways 2025: How Florida Lawmakers Are Letting Big Corporations Dodge Taxes and Making Working People Pay the Price.” The report claims that adopting that system of taxing corporations would result in up to $2.4 billion in new revenue for the state without having to raise tax rates.

Eskamani expressed concern about the House plan to cut $5 billion. She recognizes that sales taxes are regressive, she said, but worries about how  the state will make up that lost revenue.

“We have a federal government which is slashing programs left and right, with very little due diligence or oversight,” Eskamani  said.

“For a state like ours, which is very reliant on federal funding, we need to be cautious and careful about permanently cutting opportunities to generate revenue for essential services like Medicaid. Like public education. Like paying our public safety officials, and so forth. And so the solution that I have been mentioned many times as the ranking member of the Ways and Means Committee is combined reporting.”

Eskamani emphasized that supporting combined reporting is not a partisan issue. In fact, former St. Cloud Republican House members Fred Hawkins filed legislation in 2021 to mandate multistate and multinational companies to file single Florida corporate income tax return covering their entire businesses, rather than separate returns for subsidiaries.

If all states that levy a corporate income tax adopted combined reporting, that policy would raise $18.7 billion a year, according to an analysis by the Institute on Taxation and Economic Policy.