SALES TAXATION OF SERVICES: AN ECONOMIC PERSPECTIVE
Michele E. Hendrix & George R. Zodrow
State sales taxation of services has a long and controversial history. When the states first began utilizing the sales tax in the 1930s, the tax base was largely confined to tangible personal property. Subsequently, many states have, to varying degrees, extended their sales tax bases to include services, but such efforts typically have been far from comprehensive and have often generated considerable controversy. The most celebrated example of the latter phenomenon occurred in Florida, where the state in 1987 enacted sweeping legislation that extended the state sales tax to a broad spectrum of services, only to rescind the legislation a short six months later in response to a whirlwind of criticism. Despite this experience, the Florida legislature is once again considering expanding its sales tax base to include a wide variety of services purchased by both businesses and households, with the resulting revenue used to reduce the state sales tax rate from 6% to 4.5%.
THE UNEASY CASE FOR EXTENDING THE SALES TAX TO SERVICES
Kirk J. Stark
The sales tax is dying on the vine. First adopted during the Depression in response to declining income and property tax revenues, the retail sales tax emerged during the second half of the 20th century as one of the major revenue sources for state and local governments. According to the most recent Census of State and Local Governments, sales taxes accounted for roughly thirty-six percent of all state and local tax revenues in 1996. In those states without an individual income tax, such as Texas and Florida, the sales tax is even more significant, accounting for an average of fifty-two percent of all state and local taxes.
RANDALL G. HOLCOMBE
Randall G. Holcombe
From the standpoint of economic theory, taxes are judged by the sometimes-conflicting standards of efficiency and equity. Efficient taxes place as small a burden on taxpayers as possible, over and above the revenues they extract, and are neutral in the sense that they do not cause taxpayers to make different economic choices than they would make in the absence of taxes. No tax meets the ideal of efficiency completely because taxes always impose some burden on taxpayers beyond the revenues they collect. All taxes discourage the taxed activity, thus altering people’s economic choices.
AN OPPORTUNITY LOST: TAX REFORM AND THE 1997-1998 CONSTITUTION REVISION COMMISSION
Robert L. Nabors
This Article documents and describes the only tax reform proposal considered by the 1997-1998 Constitution Revision Commission. The proposal for a specific constitutional amendment forcing the Florida Legislature to reform the general state sales tax failed to receive sufficient votes for adoption by the Revision Commission. The rejected proposal was designed to permit the people to direct legislative action. In the proposal, the legislature was constitutionally required to reduce the general state sales tax rate and maintain revenue neutrality by taxing currently excluded services or exemptions that fail to advance a state public purpose. Included in this Article is a detailed description of the rejected proposal, an explanation of the schedules before the Revision Commission intended to demonstrate the feasibility of achieving the mandated revenue neutrality requirement and a summary of the votes taken and the barriers that led to a rejection of the proposal. Also included is a brief analysis of the power reserved to the people to revise the Florida Constitution by the establishment of a constitution revision commission and a comparison to the power of the people to propose a constitutional amendment by initiative.
CONFIDENTIALITY IN MEDIATION: WHAT CAN FLORIDA GLEAN FROM THE UNIFORM MEDIATION ACT?
Paul Dayton Johnson, Jr
Society is forced to deal with the inevitable side effects of expansion as it continues to grow. The continual increase in litigation is one of these side effects, and it has strained the resources of our judicial system. Litigation is slow and expensive as court dockets become more crowded. This rise in litigation has led society to explore alternative means of dispute resolution. Today, Alternative Dispute Resolution is a burgeoning field of study that encompasses many aspects of society.
THE ORIGIN AND EVOLUTION OF FLORIDA’S PRESUMPTION AGAINST ROTATING CUSTODY: A GUIDELINE FOR FLORIDA JUDGES
Rotating custody, also known as joint, alternating, divided, split, and shared custody, is defined as shared physical custody of a minor child and shared parental responsibility. In rotating custody arrangements, the child lives with each parent for a substantial amount of time, or at least thirty percent of the time. Some authorities define rotating custody more strictly, limiting the definition to an arrangement where each parent has custody of the child fifty percent of the time. Because, however, Florida courts and other authorities consider custody arrangements providing that the child lives with each parent for a substantial period of time to be rotating, this Comment follows the more flexible definitions of the term.
THE DIFFERENT FACES OF “PUBLIC PURPOSE”: SHOULDN’T IT ALWAYS MEAN THE SAME THING?
Martin M. Randall
Under Florida law the phrase “public purpose” carries with it several different meanings, and when used as a standard for determining the limits of governmental actions it offers differing levels of protection for the property and money of private individuals. This Note will examine significant decisions and underlying policy considerations in three areas of Florida law that rely heavily on a finding of a public purpose: (1) validation of revenue bonds, (2) ad valorem tax exemptions, and (3) eminent domain.