Florida is one of seven states that does not require remote retailers to collect and remit sales tax from online purchases, placing an honor system on residents to pay the state’s 6 percent sales tax.
Florida also is the nation’s only state that hasn’t changed online sales tax collection laws in the wake of the June 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, which allows states to compel out-of-state remote sellers to remit sales taxes.
Sen. Joe Gruters, R-Sarasota, the Republican Party of Florida chairperson, sponsored Senate Bill 126 during the 2020 legislative session. It would have mandated online retailers that sell at least 200 items, or $100,000 worth of goods, to Floridians to collect and remit sales tax.
The bill advanced through two committees before dying in the Senate Appropriations Committee.
With the pre-filing period beginning Monday for the 60-day legislative session, among the first bills filed was an “e-fairness” proposal by Rep. Chuck Clemons, R-Newberry.
Clemons’ House Bill 15 dissolves the distinction between remote and on-site sales and places the burden for collecting sales taxes on the seller.
With the state facing a projected $2.7 billion pandemic-induced revenue shortfall, Clemons maintains Florida cannot afford to leave sales tax revenue on the table.
“Florida needs tax fairness now more than ever,” Clemons told Florida Politics. “This pandemic has slowed our tourist-based revenue drastically. This bill won’t cure COVID, but it will help our economy.”
Florida’s Treasury estimated the state didn’t collect $480 million in online sales taxes in 2019. Tallahassee-based public spending monitor Florida TaxWatch (FTW) projected the state’s uncollected sales tax revenue nears $700 million a year.
Reps. Chip LaMarca, R-Lighthouse Point, and David Smith, R-Winter Springs, have signed onto HB 15 as co-sponsors. As of mid-day Tuesday, a Senate companion had not been filed.
In a study released in April, FTW said adopting an “e-fairness” bill and sealing a projected $700 million annual gaming compact with the Seminole Tribe are pivotal to “help shore up state revenue without raising taxes.”
FTW maintains lawmakers should join “the rest of the nation in taking measures to collect the taxes already owed on internet sales (e-fairness),” which it estimated “could bring in $700 million annually” for the state.
During November’s brief legislative organizational session, Gruters said the pandemic has revealed Florida must start collecting sales tax from internet commerce to not only collect needed revenues but to protect small businesses.
“Our local people who are paying taxes, providing jobs, they are getting hit hard,” Gruters said. “At the same time, if we’re able to raise about $800 million, I think that will help.”
New Florida Senate President Wilton Simpson, R-Trilby, said he supports “e-fairness” measures, noting past measures have died because some lawmakers don’t want to be perceived as raising taxes.
That’s a misperception, Simpson said.
“It’s not a tax increase to pay the taxes you owe,” he said. “If you think about all our brick-and-mortars in this state that work hard every day, we put rules in place and they follow those rules. They collect tax, and they send it to us.”
House Speaker Chris Sprowls, R-Palm Harbor, who now leads the chamber where previous “e-fairness” bills have gone to die, acknowledged objections over raising taxes is not applicable to collecting online sales taxes
“I rule out tax increases,” he said. “But the sales tax already exists.”
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