A new summary by Dr. Edward Longe of the James Madison Institute (JMI) says Florida’s Communications Services Tax (CST) is a “digital tax trap” that reduces innovation.
In 2001, CST was established during the administration of Gov. Jeb Bush. Taxes are imposed on each sales of communication services. This is passed on to consumers in the fields of cable television, video and music streaming, telephone and mobile communications.
Dr. Longe says the tax is one of the worst taxes in the United States because it is a burden to users and the tax itself is complicated.
According to a JMI report, when combined with local rates, Florida ranks as the most expensive state for communications services, with more than 15% of consumer invoices.
Dr. Longe highlights three issues with the current CST system.
The analysis shows that the broad and vague definition of “communication services” of taxes allows for continued expansion through administrative interpretations rather than legislative measures recently extended to services such as celebrity video messaging and online education platforms. I did.
Another issue is the fluctuations in tax rates across Florida’s 481 tax jurisdiction, which creates significant administrative complexity and regional cost gaps.
Dr. Longe said that despite CST bringing in $608 million in revenue, tax revenues are diverted to general funds rather than supporting critical communications infrastructure.
Solution?
The current CST rate freeze will go beyond 2026 to prevent jurisdictional rise, establish clear legislative definitions of taxable services, prevent administrative overreach, and make CST revenues first It requires that you dedicate to communications infrastructure before general spending. These reforms will increase regulatory certainty, protect consumers from rising costs, and ensure that tax revenues support the infrastructure funded.
“CST places a significant burden on both residents and businesses. This result is in stark contrast to the original goals of simplification and efficiency. In most cases, unwritten definitions and ambiguities are the ones that are not written. The fact that more services are taxed than originally intended,” says Dr. Longe.
Longe says the state legislature needs to reform the CST tax to benefit the current needs of Florida citizens and businesses.
