Online sales tax bill on the table for Florida Legislature
by Joanna Lee Clary Bonfanti on February 03, 2012
On Thursday, February 2, 2012, the Senate Budget Subcommittee on Finance and Tax submitted SB 2098, addressing the state’s ability to levy and collect sales tax from online sales in Florida.
If the bill is successful, online companies would be expected to collect and remit sales tax on purchases by Floridians. Currently, businesses with no physical presence in Florida do not have to collect and remit to the state sales tax on purchases by Floridians. The state does require Floridians who buy online to self-enforce paying sales tax, but most buyers do not do this.
The amount of legally owed, but uncollected sales taxes in Florida is estimated at $1 billion and continues to grow. Meanwhile, brick-and-mortar businesses in Florida contend they are at a competitive disadvantage with online retailers like Amazon.com and others.
Legislation on this topic is typically filed each year, but so far not one has been successful due to concerns from Governor Rick Scott and other Republican leaders about raising taxes on Floridians.
Committee chair Senator Ellyn Bogdanoff (R-Fort Lauderdale) said the proposed committee bill will make any tax increase revenue-neutral, either through an overall drop in property or sales taxes or by setting aside four sales tax holiday weekends per year. Governor Scott says he will sign legislation taxing online sales if the bill is revenue-neutral.
Representative Stephen Precourt (R-Orlando), chair of the House Finance and Tax Committee said the committee won’t move ahead on the issue without clear support.
Supporters
The Florida Retail Federation, Florida Chamber of Commerce, Associated Industries of Florida, and various other brick and mortar businesses in Florida have openly supported measures to enforce online sales tax.
“It’s an issue of fairness,” Rick McAllister, president and CEO of the Florida Retail Federation told the Miami Herald/Times Tallahassee Bureau. “In our mind, it’s not about the taxes collected, it’s about the competitive nature of our business.”
The Amazon.com Exception?
Online retailer Amazon.com is trying to convince lawmakers to strike a deal that will allow them to be exempt from the online sales tax for a number of years in exchange for bringing nearly 3,000 jobs to Florida by opening distribution centers in the state.
With sales tax dollars on the table, Republican lawmakers will have to delicately balance the need for collecting the dollars to fill its $2 billion budget gap and keeping promises to not raise taxes on their constituents.