BILL #: HB 7063 PCB WMC 23-02 Taxation
SPONSOR(S): Ways & Means Committee, McClain
HB 7063 passed the House on April 27, 2023. The bill was amended in the Senate on May 4, 2023, and
returned to the House. The House concurred in the Senate amendment and subsequently passed the bill as
amended on May 5, 2023. The bill provides the following tax reductions and other tax-related modifications.
For sales tax, the bill includes permanent exemptions for: specified baby and toddler products and clothes,
adult incontinence products, oral hygiene products, machinery and equipment to produce renewable natural
gas, certain agricultural fencing, firearm safety devices, and small private investigative agency services. The
bill provides the following temporary exemptions: a one-year exemption for certain ENERGY STAR certified
appliances; a one-year exemption for gas ranges and cooktops; and an estimated 8-month reduction in the
business rent tax from 5.5% to 4.5%. The bill also has the following tax holidays: two 14-day “back-to-school”
tax holidays; two 14-day “disaster preparedness” tax holidays; a three-month “Freedom Summer” tax holiday
for specified recreational items and activities; and a seven-day “Tool Time” tax holiday for tools and equipment
commonly used in skilled trades.
For property taxes, the bill makes several changes to expand, clarify, or correct provisions related to
homestead benefits for permanently and totally disabled veterans, first responders, and surviving spouses of
either; allows an educational facility to qualify for an exemption if it has a bona fide 98-year lease with nominal
payments or has received an educational exemption for ten prior consecutive years; amends the property
value and percentage thresholds which limit a property appraiser’s authority to appeal certain decisions of the
value adjustment board; and makes technical and clarifying changes to several sections of existing law.
For corporate income tax, the bill adopts the Internal Revenue Code in effect on January 1, 2023; creates
temporary tax credits for homebuilders that purchase and install residential graywater systems and for
companies that purchase machinery and equipment for use in the production of human breast milk fortifiers;
and increases the annual cap for the Voluntary Cleanup Tax Credit (“Brownfields”) Program to $35 million.
Additionally, the bill delays the imposition of natural gas fuel taxes; revises criteria for counties that may
reimburse certain expenses from revenues received by a tourist development tax; requires that all tourist
development taxes be enacted by referendum; requires expiring local taxes to be renewed at a general
election within 48 months of the renewal date; exempts certain small business loans from duplicative
documentary stamp and intangible tax treatment; authorizes the local food and beverage sales tax in Miami-
Dade county to be levied in cities that impose the municipal resort tax if approved by referendum; clarifies the
calculation of a certain penalty as related to the Florida Tax Credit Program, New Worlds Reading Initiative,
and Strong Families Tax Credit programs; increases the annual cap of the Strong Families Tax Credit to $20
million; distributes $27.5 million for 2 fiscal years to promote the breeding and racing of horses in Florida;
creates a credit against pari-mutuel taxes for certain federal assessments related to horseracing safety; and
prohibits special assessments on agricultural lands.
The total state and local government impact of the bill in Fiscal Year 2023-24 is estimated to be -$1,161.1
million (-$303 million recurring). See Fiscal Comments section for details.
The bill was approved by the Governor on May 25, 2023, ch. 2023-157, L.O.F., and will become effective July
1, 2023, except as otherwise provided.
This document does not reflect the intent or official position of the bill sponsor or House of Representatives .
DATE: 6/1/2023
Sales Tax
Florida’s sales and use tax is a six percent levy on retail sales of a wide array of tangible personal
property, admissions, transient lodgings, and commercial real estate rentals 1, unless expressly
exempted. In addition, Florida authorizes several local option sales taxes that are levied at the county
level on transactions that are subject to the state sales tax. Generally, the sales tax is added to the
price of a taxable good and collected from the purchaser at the time of sale. Sales tax represents the
majority of Florida’s General Revenue (projected 75.5 percent for FY 2022-23)2 and is administered by
the Department of Revenue (DOR) under ch. 212, F.S.
Authorized in 1982, the Local Government Half-Cent Sales Tax Program generates the largest amount
of revenue for local governments among the state-shared revenue sources currently authorized by the
Legislature.3 It distributes a portion of state sales tax revenue via three separate distributions to eligible
county or municipal governments. Additionally, the program distributes a portion of communications
services tax revenue to eligible local governments. Allocation formulas serve as the basis for these
separate distributions. The program’s primary purpose is to provide relief from ad valorem and utility
taxes in addition to providing counties and municipalities with revenues for local programs. 4
Permanent Sales Tax Exemptions
Baby and Toddler Products
Current Situation
Florida is home to more than one million children under age five, and welcomes nearly 600 newborns
each day.5
The Legislature previously enacted sales tax exemptions for children’s clothing and shoes, and
children’s diapers, both from July 1, 2022 through June 30, 2023. 6 Aside from this temporary
exemption, the retail sale of most baby and toddler essentials are subject to sales tax in Florida.
1 Commercial real estate rentals are subject to a 5.5% sales tax pursuant to s. 212.031(1)(c), F.S.
2 The Office of Economic and Demographic Research, General Revenue Consensus Estimating Conference Comparison Report, p. 1,
available at (last visited May 10, 2023).
3 Office of Economic and Demographic Research, Florida Local Government Financial Information Handbook 2022 , p. 55, available at (last visited May 10, 2023).
4 Id.
Econographic News: Florida Vital Statistics, available at
demographics/reports/econographicnews-2022-v2.pdf (last visited May 10, 2023);
Florida Population by Age Group, available at (last
visited May 10, 2023).
6 Chapter 2022-156, L.O.F.
DATE: 6/1/2023
Effect of Proposed Changes
The bill provides a permanent exemption from sales tax on the retail sale of the following baby and
toddler products:
 Baby cribs, including baby playpens and baby play yards;
 Baby strollers;
 Baby safety gates;
 Baby monitors;
 Child safety cabinet locks and latches and electrical socket covers;
 Bicycle child carrier seats and trailers designed for carrying young children, including any
adaptors and accessories for these seats and trailers;
 Baby exercisers, jumpers, bouncer seats, and swings;
 Breast pumps, bottle sterilizers, baby bottles and nipples, pacifiers, and teething rings;
 Baby wipes;
 Changing tables and changing pads;
 Children’s diapers including single-use diapers, reusable diapers, and reusable diaper inserts;
 Baby and toddler clothing, apparel, and shoes, primarily intended for and marketed for children
age 5 or younger. Baby and toddler clothing size 5T and smaller and baby and toddler shoes
size 13T and smaller are presumed to be primarily intended for and marketed for children age 5
or younger.
Oral Hygiene Products
Current Situation
Certain medical products and supplies are exempt from sales tax, including supplies or medicine
dispensed according to a prescription and other non-prescription common household remedies used in
the cure, mitigation, treatment, or prevention of illness or disease.7 Alcohol wipes, bandages, and
gauze are examples of common household remedies exempt from sales tax. Cosmetics 8 and toilet
articles 9 are specifically excluded from the common household remedy exemption, notwithstanding the
presence of medicinal ingredients therein.
The Department of Business and Professional Regulation (DBPR) is responsible for prescribing and
approving a list of common household remedies that qualify for the exemption, which is certified by
DOR from time to time and included in the rules promulgated by DOR. 10
Certain oral hygiene products, such as toothpaste and mouthwash, are considered cosmetics and toilet
articles and are therefore excluded from the common household remedy exemption. Cosmetics and
toilet articles are only exempt when dispensed according to an individual prescription or prescriptions
written by a licensed practitioner authorized to prescribe medicinal drugs.
7 Section 212.08(2)(a), F.S.
8 Section 212.08(2)(b)2., F.S., defines “cosmetics” as articles intended to be rubbed, poured, sprinkled, or sprayed on, introd uced into,
or otherwise applied to the human body for cleansing, beautifying, promoting attractiveness, or altering the appearance and also means
articles intended for use as a compound of any such articles, including, but not limited to, cold creams, suntan lotions, mak eup, and
body lotions.
Section 212.08(2)(b)3., F.S., defines “toilet articles” as any arti cle advertised or held out for sale for grooming purposes and those
articles that are customarily used for grooming purposes, regardless of the name by which they may be known, including, but n ot
limited to, soap, toothpaste, hair spray, shaving products, colognes, perfumes, shampoo, deodorant, and mouthwash.
10 Form DR-46NT, Nontaxable Medical Items and General Grocery List (R. 01/22), available at (last visited May 10, 2023).
DATE: 6/1/2023
Effect of Proposed Changes
The bill provides a permanent exemption from sales tax on the retail sale of oral hygiene products. Oral
hygiene products included in the exemption are:
 Electric and manual toothbrushes;
 Toothpaste;
 Dental floss;
 Dental picks;
 Oral irrigators; and
 Mouthwash.
Adult Incontinence Products
Current Situation
Adult diapers and incontinence products are not currently included in the list of medical products and
supplies which are exempt from sales tax in Florida, however, diapers for children and adults have
been temporarily exempted during certain sales tax holidays.11
Of the 45 states that impose a sales tax,12 California, Colorado, Connecticut, Indiana, Iowa, Louisiana,
Maryland, Massachusetts, Minnesota, New Jersey, New York, Pennsylvania, Rhode Island, Vermont,
Virginia, and the District of Columbia do not subject the sale of diapers to state sales tax. 13 North
Dakota exempts diapers used for incontinence, but not baby diapers. 14
Effect of Proposed Changes
The bill provides a permanent exemption from sales tax on the retail sale of adult diapers, incontinence
undergarments, incontinence pads, and incontinence liners for human use.
Current Situation
Florida exempts from sales tax many items used for agricultural purposes, including fertilizers, animal
health products, portable containers, certain generators, bailing wire and twine, etc. 15 Additionally, in
2022 the legislature amended s. 212.08(5)(a), F.S., to exempt from sales tax: hog wire and barbed wire
fencing, including gates and materials used to construct or repair such fencing, used in agricultural
production on lands classified as agricultural under s. 193.461, F.S.16
Currently, materials used to construct or repair permanent or temporary fencing used to contain cattle,
including wooden fencing, electric fencing, and corral panels, are not exempt from sales tax.
Effect of Proposed Changes
11 See, e.g., Department of Revenue, 2022 Back-to-School Sales Tax Holiday Tax Information Publication, p.4, available at (last visited May 10, 2023).
12 Alaska, Delaware, Montana, New Hampshire, and Oregon do not levy a state sales tax. See Tax Foundation, State and Local Sales
Tax Rates (2020), available at (last visited
May 10, 2023).
National Diaper Bank Network, Sales Tax on Diaper Purchases by State, available at
tax/ (last visited May 10, 2023).
14 Id.
15 Section 212.08(5)(a), F.S.
16 Chapter 2022-97, L.O.F., section 23.
DATE: 6/1/2023
The bill expands the exemption under s. 212.08(5)(a), F.S., to include materials used to construct or
repair permanent or temporary fencing used to contain cattle and includes wooden fencing, electric
fencing, and corral panels.
Renewable Natural Gas Machinery and Equipment
Current Situation
Renewable natural gas is made from biogas (the gaseous product of the decomposition of organic
matter) that has been processed to purity standards and can be used as transportation fuel or liquefied
natural gas. However, to fuel vehicles, the biogas must be processed to a higher purity standard
resulting in the renewable gas having a higher content of methane than raw biogas, which makes it
comparable to conventional natural gas. This makes the renewable natural gas suitable in applications
that require pipeline-quality gas such as vehicles.17
Three main sources of biogas are landfills, livestock operations and wastewater treatment sites. In
landfills, the digestion process takes place in the ground rather than in an anaerobic digester, which is
a series of processes in which microorganisms break down biodegradable material in the absence of
oxygen.18 As of 2021, there were 548 operational landfill gas projects in the country. At livestock
operations, animal manure is collected and run through an anaerobic digester to stabilize and optimize
methane production. The result is biogas that can be processed into renewable natural gas and used to
fuel gas vehicles or produce electricity. As of 2022, there are 331 livestock farms utilizing anaerobic
digester systems in the country, including three in Florida. 19 At wastewater treatment plants, biogas is
produced by digesting the solids removed in the wastewater treatment process. Approximately 1,300
wastewater treatment plants in the country have anaerobic digesters.20
Effect of Proposed Changes
The bill provides a permanent exemption from sales tax for machinery and equipment used at a fixed
location for the production, storage, transportation, compression, or blending of renewable natural gas.
The bill defines “renewable natural gas” as an anaerobically generated biogas, landfill gas, or
wastewater treatment gas refined to a methane content of 90 percent or greater, which may be used as
transportation fuel or for electric generation or is of a quality capable of being injected into a natural gas
The bill provides that purchasers of machinery and equipment qualifying for this exemption must furnish
the vendor with an affidavit stating that the item or items to be exempted are for the production,
storage, transportation, compression, or blending of renewable natural gas. Purchasers with self-
accrual authority21 are not required to provide an affidavit; however, the purchaser must maintain all
documentation necessary to prove the exempt status of purchases.
17 United States Department of Energy, Alternative Fuels Data Center, Renewable Natural Gas Production, at (last visited May 10, 2023).
18 Id.
19 United States Environmental Protection Agency, Livestock Anaerobic Digester Database, at
anaerobic-digester-database (last visited May 10, 2023).
20 United States Department of Energy, Alternative Fuels Data Center, Renewable Natural Gas Production, at (last visited May 10, 2023).
21 Section 212.183, F.S. The Department of Revenue is authorized to provide by rule for self-accrual of the sales tax under one or more
of the following seven circumstances: where authorized by law for holders of direct pay permits; where tangible personal property is
subject to tax on a prorated basis, and the proration factor is based upon characteristics of the purchaser; where the taxabl e status of
types of tangible personal property will be known only upon use