A Threat to Florida’s Small Businesses: Unpacking HB 677 and SB 564

A Threat to Florida’s Small Businesses: Unpacking HB 677 and SB 564

The Florida Legislature is on the brink of a crucial decision, poised to determine the fate of two significant business relief bills, HB 677 and SB 564, within hours. These bills, touted as measures for “safeguarding Florida’s business landscape,” are in reality poised to implement concealed tax hikes on Floridians, all to enhance the wealth of powerful corporations.

Currently, businesses in Florida incur an interchange fee every time a credit card transaction is processed. This fee, which encompasses the taxes on the sale, covers the associated costs of handling the transaction, sparing businesses an administrative headache. However, large corporations, increasingly dependent on governmental tax incentives and other special benefits, are pressuring the Florida legislature to terminate this beneficial arrangement.

HB 677 and SB 564 propose a major shift. Instead of the businesses, banks and credit unions would be responsible for calculating the sales tax liabilities tied to the interchange fee. This proposition is motivated by one core reason: large companies understand that small businesses, unlike them, will be unable to bear the heightened processing charges levied by banks to finance the necessary systems, technology, and personnel. This discrepancy would inevitably confer a market advantage to the larger corporations.

For big retailers, these novel fees would represent a negligible expense. However, for small businesses in Florida, the situation is markedly different. They would face a stark choice: either absorb the additional costs and risk bankruptcy, or transfer part of the burden onto consumers by increasing shelf prices. While the latter option might alleviate some immediate financial pressure for small businesses, the long-term implications are grim as customers would likely gravitate towards large retailers that can maintain lower prices.

Additionally, even if a select few corporations could shoulder the cost of the new tax systems, overall prices in Florida would inevitably climb if these bills become law. This prospect is alarming in a state where the inflation rate is already a staggering 9%, significantly above the national average. Rather than passing legislation that could potentially exacerbate this trend, the legislature should be devising strategies to counter it.

The hope remains that the legislature will comprehend the ramifications of these bills and reject them. It is critical to prevent any further impingement on the growth of small businesses in Florida, particularly in light of the current inflation crisis. If the legislature does pass the bills, Governor Ron DeSantis retains the power to veto them.

This is not the moment to further consolidate wealth among large corporations, undermining the free market. It is the time to create a level playing field by minimizing regulatory obstacles, enabling growth and prosperity for all, not just the affluent and influential.