Effective January 1, 2025, Hillsborough County businesses face critical sales tax adjustments following a Florida Supreme Court ruling and legislation passed during the 2024 Regular Session.   

This issue arose in November 2018, when Hillsborough County voters approved a 1% transportation surtax. In 2021, the Florida Supreme Court invalidated the surtax due to constitutional issues. During the time the surtax was in place, nearly $570M was collected. Ultimately, the legislature decided to return these excess collections to purchasers in Hillsborough County through a temporary reduction of its other surtaxes.

Effective next year, all retail dealers must stop collecting both the 0.5% indigent care surtax as well as the 0.5% local government infrastructure surtax for sales made to customers into Hillsborough County. Dealers must continue collecting the 6% state sales tax and 0.5% school capital outlay surtax in Hillsborough County.

The surtax suspension impacts all dealers doing business in Hillsborough County, including those located outside the county and out-of-state remote sellers. The suspension impacts sales of retail goods, admissions, electricity, nonresidential cleaning, transient rentals, rentals of items, and the business rent tax. Businesses must carefully adjust their tax collection processes to ensure compliance. Erroneously collected surtaxes during the suspension period must be remitted to the state, with options available for customer refunds.

Consumers should note that the new Hillsborough County state and local tax rate of 6.5% will be lower than many surrounding counties including Pinellas (7%), Polk (7%), Pasco (7%), DeSoto (7.5%), Manatee (7%), Hardee (7%), Sarasota (7%), and Sumter (7%).

The Department of Revenue will issue future guidance on when surtax collection will resume. Businesses and consumers should monitor official communications and prepare for potential tax collection changes. If you have questions, please contact Jones Walker's State and Local Tax Attorneys for a comprehensive review of how these changes may impact your business's tax strategy and compliance obligations.

The TIP is available at the following website: https://floridarevenue.com/taxes/tips/Documents/TIP_24A01-15.pdf