2015 cell phone tax cut adds up for Scott

Gov. Rick Scott announced after his re-election that he wanted to cut a tax on Floridians' cell phone and cable bills by more than $120 million per year, and despite a budget meltdown in 2015, the Legislature obliged.  

In January 2015, Scott said he wanted to cut the state's communications services tax by 3.6 percent, which would have taken $470.9 million in tax revenue out of Florida coffers. This tax is based on a complex formula that includes a state tax on wireless phone and cable service to residents and businesses, a tax on gross receipts for services, a direct-to-home satellite service tax, and a local portion that varies from county to county.

Scott saw cutting the communications services tax as a way to help average Floridians. Going into the 2015 legislative session, the state portion was 6.65 percent for cable and phone and 10.8 percent for satellite. Scott wanted to reduce those taxes by 3.6 percent. His office said the change would save a family spending $100 a month on cable and cell phone services about $43 a year, or $3.58 a month.

With the 2015 Legislature deadlocked over how to deal with health care spending, reducing the communications services tax was not a priority for lawmakers. Still, the final budget passed during a special session included provisions to cut the tax, though not at the percentage Scott would have liked.

The cable and phone portion was cut down to 4.92 percent, while the satellite fee was shaved to 9.07 percent. The change amounted to a 1.73 percentage point reduction, or $20.76 a year on a $100 cell phone and cable bill. That's about half the percentage Scott said he wanted, but it still ended up being an estimated tax savings of a more than $200 million for consumers.

Even those of us who are terrible at math can calculate that this saves taxpayers more than the $120 million Scott promised to cut. And it could potentially end up being more.

Sen. Dorothy Hukill, R-Port Orange, has filed SB 256, a bill that would reduce each portion of the state tax a further 2 percentage points: cable and phone would be 2.92 percent, while satellite would be 7.07 percent.

That would amount to a total reduction of 3.73 percentage points over two years, slightly more than the reduction Scott wanted. Hukill's office said the financial impact on the state's annual tax revenues isn't immediately clear, but Florida TaxWatch gave a ballpark figure of about $230 million.

Kurt Wenner, TaxWatch vice president of research, said he doubts Hukill's bill will pass because Scott is asking for $1 billion in tax cuts in other areas and the Legislature just reduced the communications services tax rate last year.

"I wouldn't be surprised if the Legislature wanted to move on to something else," Wenner said.

Scott may not have gotten the 3.6 percent he said he wanted, but he did top $120 million in tax savings, which is what Scott promised to do in his second term. Since that's the case even if Hukill's bill doesn't go anywhere this session, we rate this a Promise Kept.