Digital currency sales tax holiday getting a push
(The Center Square) – A bill introduced in the Florida Senate would create a sales tax holiday for people who pay for purchases with digital currency.
State Sen. Jason Brodeur, R-Sanford, sponsor of Senate Bill 352, believes it will help introduce residents to the benefits of digital currency. Customers who pay with virtual currencies would not have be charged sales taxes at businesses such as gas stations and restaurants.
The holiday would start June 1, 2025 and go through July 31, 2025.
“As we look at diversifying our economy as a state, one of the things we are interested in doing is help making it easier for folks to use digital currency,” Brodeur told The Center Square. “We thought that the way to incentivize folks to do it was to take a model from some cities in Europe. They relaxed some of the fees associated with transactions if the consumers and the retailers used virtual currency instead because it’s frictionless.”
The best way to have a broad-based introduction to digital currency is to offer the sales holiday to the businesses that are most common such as grocery stores and gas stations, he said.
Florida, however, does not have a state income tax and is heavily dependent on sales taxes for revenue, the senator said.
“We’ve got to be careful when we do a sales tax holiday that it’s not for a very long time and it’s not on giant ticket items,” he said. “We’ve got to be very good about predicting how much the holiday will cost the state in lost revenue and have a commensurate decrease in spending to match that.”
By making the holiday from June 1 to July 31 of 2025, the holiday will land in two different fiscal years for the state budget, he added.
“The Department of Revenue has adequate time to estimate the potential revenue loss, but they only have to do it for one year at a time,” said Brodeur.
The goal of the bill is largely to help consumers rather than government, said Brodeur, who describes himself as having someone with a Libertarian mindset.
“I want people to be able to maximize the value of their assets,” he said. “In a digital world, you don’t have to worry about transaction fees, credit card fees. All of those fees go away.”
If passed, his legislation would make it harder for state government to track how much stores owe in sales taxes, he concedes.
“The Department of Revenue is going to have to figure out a way to their audits when you don’t have records of transactions,” said Brodeur. “We have talked to the Department of Revenue about how to make this a viable payment option while still allowing the government to do their audit function.”
Very few merchants currently accept digital currency so that will also be a hurdle to overcome, the senator said.
“Stores won’t have to take digital currency if they don’t want to because my guess is that they would have to invest in upgraded software,” said Brodeur. “It will require some investment for the retailers who decide to accept this.”
The experiment will be a learning experience for Florida, the senator said.
“Having a two-month trial, in two different fiscal years,” he said, “is a really nice way for us to put a toe in the water and give us a really good estimate of what it might look like if we were to make it permanent throughout the year.”
