There's a TAX for that
Joyce Minor | Highlands TodaySEBRING - When people pump gasoline in Highlands County, they pay 53.9 cents in taxes to federal, state and local governments.
Published: January 27, 2013
Published: January 27, 2013
Of that, 12 cents comes back locally.
Motorists may not realize that because the taxes are rolled into the sticker price.
That does not happen when people go shopping and have to pay sales tax on several items. The receipt outlines the tax paid.
Taxes, fees and surcharges are tacked onto many other bills. State statutes stipulate which taxes cities and counties can levy. They specify the rates allowed.
They also specify how those funds can and cannot be used, and, sometimes, the money remitted to local governments is figured after applying complex formulas stipulated by law.
"Almost every tax has an underlying purpose," explained Tim Mechling, senior manager of administrative services for Highlands County Office of Management and Budget.
That means all the money doesn't just go into one pot. Several of these taxes have to be used for specific purposes only.
"Most citizens don't realize that we can't just shift funds around to meet expenses. Almost every tax dollar we receive comes with specifications as to how it can and cannot be spent," he added.
Mechling gave an example: Certain taxes collected for Emergency 911 service are earmarked for equipment only, so they cannot be spent to pay the 911 dispatcher's salary even though that is part of the cost of running the service.
He gave another example.
If the county, for instance, is about to fix a road, the local share of the gasoline taxes can be used to pay for the manpower.
But, to buy asphalt to resurface a road, the money has to come from another source, like the local Infrastructure Surtax, better known as the penny sales tax.
That's because the gasoline tax revenue can be used to pay for manpower, operations and normal, every-day maintenance done by the county road and bridge and engineering departments. For big-dollar capital improvement projects, as they are called, the money has to come from the infrastructure surcharge, he added.
Highlands Today compiled a list of taxes, surcharges and fees that taxpayers may encounter.
Undoubtedly, the largest tax we all pay, other than federal income tax, is sales tax.
Florida's rate is 6 percent but local governments add 1 percent, so we pay a total of 7 percent sales tax on almost everything we buy, from clothes to furniture, cars and restaurant meals.
Funds collected go to the state and a portion, figured according to a complex formula, is returned to counties and cities.
Property taxes and tag fees
If you're a homeowner, you also pay property tax, which is rolled into a category called ad valorem taxes.
In general, property taxes fund 50 percent of our education system and about 30 percent of local government. Property taxes are levied only on real property like land, houses, etc., not personal property like cars, boats, and recreational vehicles. Those are taxed through license fees paid when you buy your tags or renew your driver's license.
For the 2010-11 tax year, the Highlands County Tax Collector collected $89,786,559 in property taxes.
All of it stays local and is distributed to 60 different local taxing entities, including the cities of Avon Park, Lake Placid, Sebring, South Florida Water District, Southwest Florida Water District, lighting districts, fire districts and others.
As for vehicle tag fees, the tax collector's office received $10,616,183. All of it goes to the state, but the tax collector's office receives $613,919 back for operating expenses.
Taxes on motor fuel, the gasoline you buy at the pump, amount to 53.9 cents per gallon in Highlands County, unless you buy diesel, in which case you'll pay 52.8 cents per gallon.
These taxes are actually levied at the wholesale level so they are rolled into the per gallon retail price and not specified on your purchase receipt.
Fuel taxes are distributed to fund a wide variety of projects statewide such as fish and wildlife conservation, public transit, agricultural research, and even the school board in some counties.
Depending on which city you live in, you may pay additional taxes listed on your utility bills. The cities of Sebring and Avon Park levy several of these fees.
A franchise fee is a tax municipalities impose on businesses to compensate them for use of a public property, such as right of way, for private gain.
Another is utility tax, imposed on "purchase of electricity, metered or bottled gas, (natural liquefied petroleum gas or manufactured), fuel oil and water service."
City of Sebring residents pay a 10 percent utility tax for water as part of a public service tax.
The 10 percent tax is also assessed monthly on the purchase of electricity, metered or bottled gas (natural, liquefied petroleum gas or manufactured).
The City of Avon Park collects a monthly 6 percent franchise tax on "base revenues" from the sale of electricity, net of customer credits, from residential, commercial and industrial customers and city-sponsored street lighting.
Last year, the city received $523,526 in franchise fees from Progress Energy and $4,961 from TECO.
The utility fee is 10 percent of the monthly charge for each service, and the utility provider or seller collects it from the purchaser.
Last year, the city collected $547,838 in utility tax for electricity, $107,132 for water and $24,281 for gas.
These fees help supplement income to the general fund, said City Manager Julian Deleon.
There is no franchise fee for sewer.
Progress Energy customers may have seen the following charges on their bills. Here is an explanation, according to a Progress Energy spokesperson.
Gross receipts tax: Collected in accordance with Florida state statutes, this tax is assessed on all electric public utilities and paid directly to the state. Progress Energy Florida does not keep these tax monies. The gross receipts tax is calculated at 2.5641 percent.
Franchise fee: This is a fee that Progress Energy collects to compensate communities for using their rights of way. All of the fee is sent back to the local community; Progress Energy Florida does not keep any franchise fees. Fees vary by community.
County/municipal utility tax: In accordance with state law, a county/municipality may levy a tax on the purchase of electricity within that area. This tax is paid directly to the county/municipality. Progress Energy Florida does not keep any of these taxes.
If you have cable or satellite television service you're also paying a hefty tax called communications service tax. It adds 12 percent to your bills.
This is another one you may pay multiple times each month, because it also shows up on phone bills, both residential and mobile. Verizon lumps it together under "taxes, governmental surcharges & fees." The money goes to the state, which returns a percentage to local governments.
Taxpayers can access the entire 311-page handbook online at edr.state.fl.us/Content/revenues/reports/tax-handbook.pdf. And if you think that URL is long and confusing, wait till you see the book.