Florida: Guidance Issued on Upcoming 2021 Freedom Week Sales Tax Holiday

The Florida Department of Revenue recently issued a Tax Information Publication announcing the 2021 Freedom Week Sales Tax Holiday. The sales tax holiday begins on Thursday, July 1, 2021 and ends on Wednesday, July 7, 2021. During the sales tax holiday period, sales of qualifying recreation and outdoor items (e.g., qualifying boating and water activity supplies, camping supplies, fishing supplies, general outdoor supplies, and sports equipment) will be exempt from all or some portion of the state and local sales tax. The portion of the sales price of a qualifying item that is exempt from tax varies depending on the type of item. This will likely make this sales tax holiday more challenging for retailers. For example, the first $50 of the price of a bicycle helmet is exempt and the first $100 of the cost of a pair of sunglasses is exempt. The first $200 dollars of the cost of a tent is exempt, but any item used in individual or team sports, not including clothing and footwear, selling for $40 or less is fully exempt. 

Additionally, admissions to qualifying entertainment and cultural events scheduled to be held from July 1, 2021 through December 31, 2021 will be exempt from sales tax if they are purchased during the holiday week. The range of covered events includes live music and sporting events, movies, and museum and state park entries as well as admission to a range of cultural and artistic events. The sales tax holiday does not apply to the rental or repair of any of the qualifying items or to sales made in a theme park, entertainment complex, public lodging establishment, or airport.

The sales tax holiday begins on the same date Florida is set to implement economic nexus for remote sellers and marketplace providers. Effective July 1, 2021, Florida will require remote sellers and marketplace providers with no physical presence in Florida to collect Florida sales tax and local discretionary surtax on taxable items delivered in the state. Accordingly, qualifying items purchased from a remote seller or through a marketplace provider will be exempt from sales tax provided the order is accepted during the sales tax holiday period for immediate shipment, even if delivery is made after the sales tax holiday period. The Department of Revenue has also issued a FAQs document to assist businesses. For more information, please contact Adam Raschke and Lauren Kuperman.