Temporary Suspension of Hillsborough County Discretionary Sales Surtaxes Starting January 1, 2025
Important update for businesses operating in Hillsborough County, Florida: Beginning January 1, 2025, certain discretionary sales surtaxes in Hillsborough County will be temporarily suspended. Here’s what you need to know about this change, including which taxes are affected and what steps businesses should take.
Affected Surtaxes
Dealers in Hillsborough County should stop collecting the following discretionary sales surtaxes starting January 1, 2025:
- 0.5% Indigent Care Surtax
- 0.5% Local Government Infrastructure Surtax
However, dealers must continue collecting:
- The 6% state sales tax, and
- The 0.5% School Capital Outlay Surtax.
This means the total tax rate in Hillsborough County during the suspension period will be 6.5%. The Florida Department of Revenue (Department) will notify dealers when to resume collecting the suspended surtaxes.
Why Are These Surtaxes Being Suspended?
This suspension is linked to a decision by the Florida Supreme Court. In March 2021, the court ruled that the 1% Hillsborough County transportation discretionary sales surtax, adopted in November 2018, was unconstitutional. As a result, the 2024 Florida Legislature passed laws under Section 212.054(9), Florida Statutes, that temporarily suspend certain discretionary surtaxes when they are deemed unconstitutional.
Funds collected from the invalidated transportation surtax will be used to:
- Offset the temporary suspension of the two surtaxes listed above.
- Support resurfacing projects for Hillsborough County roads and city streets.
- Administer refunds for the invalidated surtax.
How Will the Collected Transportation Surtax Be Used?
Proceeds from the unconstitutional 1% transportation surtax will be allocated as follows:
- Offset the Temporary Suspension: The proceeds will help fund the suspension of the indigent care and local government infrastructure surtaxes starting in 2025.
- Road Resurfacing Projects: A portion will go to the Florida Department of Transportation for resurfacing Hillsborough County roads and city streets.
- Refunds to Taxpayers: Refunds will be managed by a court-appointed administrator. Taxpayers can submit claims for refunds of erroneously collected transportation surtax at FLTaxRefund.com or by calling (888) 715-9373.
When Will the Suspension End?
The exact duration of the suspension has not yet been determined. The Department will issue an update when dealers should resume collecting the 0.5% indigent care and 0.5% local government infrastructure surtaxes.
Frequently Asked Questions
1. What if I mistakenly charged customers the unconstitutional transportation surtax?
Direct your customers to the court-appointed settlement administrator to file a refund claim by December 31, 2024. Customers can visit FLTaxRefund.com or call (888) 715-9373.
2. What if I accidentally collect the suspended surtaxes during the suspension period?
Any collected taxes are considered state funds and must be remitted to the Department. You may refund these surtaxes to your customer and then:
- Request a refund from the Department, or
- Take a credit on your sales and use tax return as a lawful deduction, following Rule 12A-1.014 of the Florida Administrative Code.
3. Does this suspension apply to out-of-county or remote sellers?
Yes, the suspension applies to all dealers, including those located outside Hillsborough County, such as remote sellers.
See the Florida Department of Revenue’s TIP 24A01-15 for more information on the upcoming suspension of certain surtaxes in Hillsborough County. Meanwhile, for more information on the Transportation Sales Surtax Refund, read “Hillsborough County Transportation Sales Surtax Refund Opportunity” from September 2024.
Jeanette Moffa, Esq.
Phone: (954) 800-4138
Email: [email protected]
Jeanette Moffa is a Partner in the Fort Lauderdale office of Moffa, Sutton, & Donnini. She focuses her practice in Florida state and local tax. Jeanette provides SALT planning and consulting as part of her practice, addressing issues such as nexus and taxability, including exemptions, inclusions, and exclusions of transactions from the tax base. In addition, Jeanette practices Florida tax controversy, working with state and local agencies in resolution of assessment and refund cases. She also litigates state and local tax and administrative law issues at the trial and appellate level.
