Florida’s Tax Showdown: The Push to Eliminate Property Taxes and What It Means for Residents

Florida is at the center of a heated tax policy debate that could fundamentally reshape how the state collects revenue. Lawmakers are considering a proposal to eliminate property taxes and replace them with a significantly higher sales tax, a move that has sparked strong opinions from both supporters and critics. As Governor Ron DeSantis signals openness to such a shift, the discussion has intensified over the potential economic impact on Florida’s businesses, homeowners, and consumers.

The proposal raises major questions about fairness and feasibility. While eliminating property taxes could provide relief to homeowners, a dramatic increase in sales tax—potentially doubling or more—could disproportionately affect lower-income residents, who spend a higher percentage of their earnings on everyday goods and services. Additionally, experts warn that Florida’s tourism-driven economy could take a hit if visitors balk at significantly higher sales tax rates. With both economic and political implications at stake, the debate is far from settled.

The Proposal: Swapping Property Taxes for a Higher Sales Tax

The idea of eliminating property taxes in Florida is not new, but recent discussions have brought it back into the spotlight. A proposal led by Florida lawmakers aims to remove property taxes—currently a crucial funding source for local governments and schools—and replace them with a dramatically increased sales tax.

According to a study by the Florida Policy Institute, doing away with property taxes could mean increasing the state’s sales tax rate from its current 6% to over 14% in order to generate equivalent revenue. The institute warns that such a shift could disproportionately impact lower-income residents and renters who would see a higher cost of living but wouldn’t benefit from property tax savings.

The DeSantis Factor

Governor Ron DeSantis has not officially endorsed the proposal but has indicated his willingness to explore it further. When asked about eliminating property taxes, DeSantis responded, “We have a lot of options on the table to ensure Florida remains tax-friendly, but we also have to be mindful of unintended consequences,” CBS Miami reports.

His remarks suggest that while he sees potential benefits, there is also caution about how such a dramatic tax shift would impact residents, particularly in a state where tourism and consumer spending play a critical role in the economy. DeSantis, who has built his political brand on fiscal conservatism, is likely weighing the long-term implications of such a move, including potential backlash from both business owners and middle-class Floridians. Additionally, with a possible presidential run in 2028, any major tax overhaul in Florida could become a key talking point in national discussions about conservative economic policy. Whether DeSantis ultimately supports the proposal may depend on further economic studies and how the public reacts to the idea of significantly higher sales taxes.

How Would This Affect Florida Residents?

For homeowners, eliminating property taxes would mean no longer having to pay thousands of dollars per year in property levies. However, for renters and lower-income individuals who don’t own property, a higher sales tax could prove burdensome. With Florida already experiencing high inflation in key sectors like housing and groceries, an additional tax on everyday purchases could strain household budgets.

Nick Papantonis from WFTV highlighted concerns that shifting the tax burden onto consumers might not be as beneficial as proponents claim. “The idea sounds great for homeowners, but what about those living paycheck to paycheck? The last thing struggling families need is higher taxes on essential goods,” he wrote.

Economic and Business Concerns

Local businesses, especially those reliant on tourism, have expressed concerns about the proposal’s impact. Florida’s low sales tax has long been an incentive for attracting visitors, but a dramatic increase could deter spending in the state’s hospitality, retail, and service industries.

Additionally, a shift to a consumption-based tax system could create volatility in state revenue. Unlike property taxes, which provide a stable source of funding, sales tax revenue fluctuates based on consumer spending patterns and economic conditions. If a downturn occurs, local governments could face unexpected shortfalls in funding for schools, emergency services, and public infrastructure.

Opposition from Local Leaders

Many local leaders and policy groups are raising alarms about the risks of removing property taxes. The Florida Policy Institute published a report calling the plan a “risky proposition” that could weaken local governments. The institute’s director, Sadaf Knight, stated, “Property taxes are one of the few stable and predictable sources of revenue for local governments. Replacing them with an unstable revenue stream puts vital public services at risk,” the Florida Policy Institute noted.

Local officials also point out that property taxes fund critical services, such as law enforcement, public education, and infrastructure projects. Without them, communities would be forced to rely on state-distributed sales tax revenue, which might not be allocated evenly across all municipalities.

A Legislative Study on the Impact

Amid the controversy, a Florida lawmaker has introduced a bill that would commission a formal study on the economic impact of eliminating property taxes. The study aims to assess:

The projected increase in sales tax needed to compensate for lost property tax revenue
The effect on Florida’s economy, including tourism and small businesses
Potential disparities in tax burdens across different income groups

The bill has gained bipartisan interest, with both supporters and skeptics agreeing that more data is needed before a major tax overhaul can be seriously considered. Local10 reported that legislators are particularly concerned about ensuring that any policy changes do not disproportionately burden middle- and lower-income residents.

The Bigger Picture: Tax Policy Trends Across the U.S.

Florida’s debate echoes broader discussions about tax policy happening across the country. Several states have explored ways to reduce property tax burdens, with some shifting to alternative funding mechanisms. However, no state has fully eliminated property taxes in favor of a significantly increased sales tax.

As discussions continue, Florida’s tax policy changes could serve as a case study for other states considering similar reforms. Whether lawmakers decide to proceed with eliminating property taxes or opt for a more balanced approach, the outcome will have lasting implications for homeowners, renters, businesses, and the overall economic landscape of the state.

As Florida lawmakers and residents weigh the potential trade-offs of eliminating property taxes, the debate remains far from settled. If this proposal gains traction, it could mean a fundamental shift in how the state funds essential services. However, with many unanswered questions about the economic impact, policymakers must carefully evaluate the consequences before making any sweeping changes.

For tax professionals and business owners, staying informed on these developments is crucial. If you have questions about how Florida’s evolving tax policies could affect your financial planning, contact our office today for expert guidance.