February 24, 2025

Florida Could Have Nation’s Highest State Sales Tax Rate Under Proposal to End Property Taxes, New Report Says

Eliminating the Property Tax Would Erode Local Governments’ Ability to Make Crucial Budget Decisions

Swapping Property Taxes for Higher Consumption Taxes Would Disproportionately Burden People Paid Low Wages


STATEWIDE, Fla. - Florida lawmakers would have to increase the state’s general sales tax rate to 12 percent — the nation’s highest — if they were to eliminate property taxes and replace them with higher consumption taxes, according to the nonpartisan Florida Policy Institute (FPI). This was one of several findings in FPI’s latest report, which examined the critical role that property taxes play in local budget operations.

The think tank cautioned that eliminating property taxes — an idea that Gov. Ron DeSantis recently floated on X, formerly known as Twitter— would tie local lawmakers’ hands, leaving them struggling to fund police, fire, schools, and other crucial public services.

Specifically, FPI’s report found that:

  • Lawmakers would have to raise roughly $43 billion to maintain public services currently funded with property tax revenue if property taxes were eliminated.
  • If all county governments and school districts in the Sunshine State collected all possible local option surtaxes at their maximum rate, it would raise an estimated $13.2 billion, enough to cover only about a third of property tax revenue.
  • Florida’s per capita property tax revenue, $2,015, falls toward the middle when comparing the 50 states. (New Jersey has the highest per-capita property revenue at $4,451.)

For the second year in a row, legislation has been introduced that would direct the state to issue a study on the impact of eliminating property taxes and replacing “property tax revenues through budget reductions, sales-based consumption taxes, and locally determined consumption taxes authorized by the Legislature.”

“Our tax code is already the most upside-down in the nation,” said Sadaf Knight, CEO of FPI. “Eliminating property taxes and enacting a sales tax hike in its place would only exacerbate this issue, adding to inflation and benefiting those with the most to gain while making it even harder for Floridians with low income to make ends meet and put food on the table.”

“Proposals to eliminate property taxes often look to replace lost revenue through consumption taxes or fail to identify new sources of revenue,” said Esteban Leonardo Santis, PhD, policy analyst at FPI and the report’s author. “While advocates of these proposals justify property tax cuts as a necessary means to offer relief, they rarely target the households that need it most by opting for top-down, one-size-fits-all tax relief that benefits wealthy households, ignores renters, and jeopardizes public education and services.”

In order to ensure that inequities in the property tax code are being addressed, FPI recommended that the state take steps to ensure that every homeowner who is eligible benefits from homestead exemptions and Save our Homes, as Black homeowners, Latina/o homeowners, and owners of lower-priced properties have lower-than-average uptake rates.The think tank also recommended steps that Florida policymakers could take to help fix the state’s upside-down tax code, including:

  • Implementing a “circuit-breaker” property tax rebate
  • Reenacting Florida's tax on intangible property (stocks, bonds, and notes)
  • Taxing “luxury” services (including, for example, private flights)
  • Collecting a mansion tax on real estate sales over $1 million
  • Enacting the Working Floridians Tax Rebate, a state level version of the Earned Income Tax Credit

FPI is an independent, nonpartisan, and nonprofit organization dedicated to advancing state policies and budgets that improve the economic mobility and quality of life for all Floridians.

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