Florida Tax Changes Explained As $115-Billion Budget Passed
Based on facts, either observed and verified firsthand by the reporter, or reported and verified from knowledgeable sources.
Newsweek AI is in beta. Translations may contain inaccuracies—please refer to the original content.
Lawmakers in Florida have passed the state's 2026 budget, with several tax changes on the horizon once it is signed by Governor Ron DeSantis.
The GOP-led state legislature approved a $115.1-billion budget for the next fiscal year, starting July 1, which also delivers $1.3 billion in tax cuts. It took more than six weeks after the scheduled May 2 end of the session for lawmakers to finally agree on the spending plan, with the state Senate unanimously passing the legislation and the state House approving it in a 103-2 vote.
"In my knowledge, there's been no other process of a budget like this year," Senate Budget Chair Ed Hooper said. "We are in day 105. We have had shouting matches; we have had finger-pointing with our friends across the rotunda. We've had discussions, but at the end of the day, we sat down and we got a deal."
Here is every tax change you need to know about in the Florida budget:
Sales Tax Changes
The most significant structural reform in Florida's 2025 tax package is the elimination of the 2-percent sales tax on commercial leases. It makes up most of the overall tax cut, earmarked at $904 million.
Jeff Brandes, head of the Florida Policy Project think tank, told Newsweek the change is a "long-overdue reform" that will lower the cost of doing business, particularly in high-cost metro areas.
"It should've happened years ago," he said. "This change helps small businesses and large employers alike, especially in high-cost metro areas where every percentage point matters."
Andrew Latham, content director at Supermoney.com, told Newsweek the change "doesn't directly pad household wallets unless you're a small-business owner," but it could still "support job retention or slow price hikes if businesses pass along the savings," although this "trickle-down effect is difficult to quantify and varies widely across sectors."
Stock image of the Florida State Capitol.
Stock image of the Florida State Capitol.
GETTY
Back-to-School Tax Holiday
For everyday families, the most immediately noticeable relief comes from Florida's newly permanent back-to-school tax holiday in August, which waives sales tax on items like clothing, school supplies, and computers.
"This now-permanent August back-to-school tax holiday allows families to skip sales tax on clothing, supplies, and computers," Latham explained. "A family with two school-age kids spending $800 total could save about $48. It's a welcome annual break, especially during a high-spend season, but modest in the broader context of a $66,000 average household budget."
Brandes said that while seasonal tax breaks are helpful, they are far from transformative.
"Tax holidays on back-to-school items and hurricane supplies are politically popular, but they're Band-Aids, not structural solutions," he said. "They help families at the margins, but they don't move the needle on the core issues driving Florida's cost-of-living challenges: housing, insurance, and health care."
Disaster Preparedness Tax Holiday
Another tax holiday on the books is designed to help Floridians with one of the downsides of living in the Sunshine State: hurricanes.
"The disaster preparedness tax holiday, timed for hurricane season, exempts gear like generators and flashlights from sales tax," said Latham. "A household spending $500 could save $30 to $40. It's more than symbolic in a state prone to storms, but still a one-time, event-driven savings."
Some key emergency items—such as batteries and tarpaulins—are now permanently exempt from sales tax.
"Items such as generators, batteries, and tarps are now permanently exempt from sales tax to encourage disaster preparedness," Chad D. Cummings, CEO of tax planning legal firm Cummings & Cummings Law told Newsweek, saying the measure is "both fiscally and strategically justified in a state regularly affected by hurricanes."
However, Cummings also raised concerns about accessibility. "While the benefit is universal, those with lower disposable income may still be unable to take full advantage," and though the holiday is well-meaning, it "does not substitute for more robust statewide resilience planning."
What Happens Next
The budget awaits the signature of DeSantis, who has the power to veto any part of the proposed legislature.
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