Online sales tax law decisions have become a focal point in various states, and Florida is no exception. With the growing prominence of e-commerce, the question of sales tax compliance for online sellers has gained significant attention. 16 states started requiring sales tax compliance from online sellers this month. Florida is not one of them. In fact, Florida’s attempt earlier this year to implement a new sales tax law failed. The Florida legislature plans to try again.
At the moment, Florida only requires sellers to collect sales tax if they have a physical nexus. Specifically, Florida wants sales tax compliance from anyone “who maintains or has within [Florida], directly or by a subsidiary, an office, distributing house, salesroom, or house, warehouse, or other place of business.”
Both Amazon and Walmart, retail giants that account for more than half of all online sales, have a nexus in Florida. They have a physical presence in the form of stores, warehouses, and other buildings. They collect and remit sales tax in Florida.
The stakeholders
Florida taxpayers rely on sales tax to keep other taxes down. Sales tax is the single largest revenue source for the state. Naturally, taxpayers including businesses in Florida are generally in favor of sales tax compliance among remote sellers. In-state businesses often talk about the “level playing field” that will result when Florida enacts their online sales tax law.
Interestingly, Orlando papers reported that the law will “level the playing field” for Walmart and Amazon, too. The major retailers, along with Target, Best Buy, and other Florida retail lobbyists, prepared a bill and sent it to Senator Joe Gruters. Gruters filed the “e-fairness” bill for the 2020 legislative session The senator believes that the bill could bring in $750 million a year for Florida’s state government and local governments as well.
Plus, it could level the playing field so Walmart and Target don’t have to be at a disadvantage compared with small online retailers or manufacturers with few direct-to-consumer sales. This is a bit of a tough pitch, but the lobbyists are going with it.
E-fairness
Gruters also points out that online sales tax collection is not a new tax or a tax increase. Consumers are always supposed to pay use tax if sales tax is not collected. Florida consumers buying high-ticket items like aircraft may comply with that regulation, but those doing ordinary business or home shopping online usually don’t. Gruters says that the current laws force Floridians into being lawbreakers.
Will Gruters succeed with his tax bill in 2020? Only time will tell. However, we can tell you right now that you will probably save time and money by letting us get you ready for sales tax compliance in every state.
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