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Florida's tax

September 25, 1987



THE blitz against it was so strong that the most surprising thing about Florida's new services tax may be that it has lasted so long. It was launched in July as a means of closing the state's budget gap. But it was a levy full of loopholes - it applied to legal work, for instance, but not in a criminal defense case, as long as the client was acquitted. Perhaps most controversially, Florida attempted to exact a levy on services from out-of-state, such as national magazine advertising. That got the people in the advertising industry angry, and when they get angry, they can fight back with considerable flair. And then a drying up of advance bookings for conventions started to worry the tourism industry. Polls showed nearly eight out of 10 Florida voters opposed to the tax.

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Now Gov. Bob Martinez, originally a supporter of the tax, has called the Legislature back into special session to work out an alternative. A one-penny increase in the state's 5 percent sales tax is one possibility. The complaint against sales taxes is that, like any levy on consumption, they are regressive. But as long as its constitutional ban on taxes on personal income, real estate, and personal property remains in place, Florida is going to be forced into quirky experiments to raise money to run its government.