Can States Really Axe the Property Tax?

When Florida Governor Ron DeSantis called for property tax repeal, he was doing something at once novel and familiar. Eliminating the property taxA property tax is primarily levied on immovable property like land and buildings, as well as on tangible personal property that is movable, like vehicles and equipment. Property taxes are the single largest source of state and local revenue in the U.S. and help fund schools, roads, police, and other services. would be unprecedented. Calling for a bold change and charging the legislature with sorting out the details, however, is a tried-and-true part of the gubernatorial toolkit.

The challenge for Florida’s legislature is finding a way to replace, or do without, a taxA tax is a mandatory payment or charge collected by local, state, and national governments from individuals or businesses to cover the costs of general government services, goods, and activities. that will raise an estimated $55 billion for Florida’s local governments and schools this fiscal year—and to do so, per the governor, without raising state taxes.

To put that figure in context, it’s only slightly less than the $58 billion Florida’s state government collected in tax revenue last fiscal year, and considerably more than the $46 billion a year generated by the state’s 6 percent sales taxA sales tax is levied on retail sales of goods and services and, ideally, should apply to all final consumption with few exemptions. Many governments exempt goods like groceries; base broadening, such as including groceries, could keep rates lower. A sales tax should exempt business-to-business transactions which, when taxed, cause tax pyramiding. , its primary source of tax revenue. Even absent any behavioral responses, Florida’s average combined state-local sales tax rate would have to exceed 14 percent to make up for the loss of the property tax.

2025 Property Tax Reform