TALLAHASSEE, Fla. — The Florida House proposed on Wednesday the largest tax cut in Florida history.

The plan would permanently reduce Florida’s sales tax from the current rate of 6% down to 5.25%. House Speaker Danny Perez, R-Miami, announced the plan Wednesday, saying it may save Floridians roughly $5 billion a year.

“We’re going to try a novel concept,” said Perez. “Instead of spending more taxpayer dollars on government programs, we’ll make Florida more affordable by giving people their own money back.”

Sales tax applies to a variety of items in Florida. Think goods and services, like the purchase of jeans, a car, or furniture. If approved, Florida would be the first U.S. state to lower its sales tax permanently.

The proposal comes as Florida lawmakers spearhead an effort to reduce government spending and waste — an endeavor they’re promoting as Florida DOGE (Department of Government Efficiency).

“We cannot spend our way out of a spending problem,” Perez said.

The Florida House will release the proposal sometime next week. Bipartisan questions are likely to follow, though, including how to make up the lost revenue.

Sales tax in Florida is the state government’s largest revenue stream, according to Florida TaxWatch, and funds nearly 75% of the state’s General Revenue Fund. Florida lawmakers use the GR fund to float things like public safety, education and social services.

“I’m excited about saving money for our taxpayers, but we do have concerns about where the state will make up for that lost revenue,” said Orlando Democratic State Rep. Johanna Lopez.

The proposal comes as Florida Republicans contemplate ending property tax, too. Florida would become the first state in the nation to do so. However, unlike sales tax, property tax primarily funds local governments and local services. Orange and Hillsborough County residents paid on average roughly $2,800 in property taxes in 2023, according to the Tax Foundation.

“I think it’s going to take several years (of) discussions, and there’s things we can do along the way to create some relief,” said Ocala Republican State Rep. Ryan Chamberlin.

Lawmakers in the 2025 Legislative Session have filed several bills providing insurance and tax relief to consumers. One would provide relief to homeowners who storm harden their homes. Another would require insurers to provide regulators and policyholders more information about fees and costs.

Property tax and insurance, meanwhile, are major contributors to Florida’s rising cost of living. Property values are up too. According to real estate firm RedFin, median home sale prices have almost doubled in Florida in five years, from around $253,000 to $412,000.

Florida’s 60-day legislative session ends May 4. The Florida House and Senate, plus Gov. Ron DeSantis, have till then to reach an agreement on sales tax, property insurance and more.