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Tuesday, Jun 19, 2018
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Florida bill aims to nab revenue from online sales tax

TALLAHASSEE — For the sixth time, a North Florida lawmaker has filed a bill aimed at capturing some of the Florida sales tax lost to online retailers.

Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, filed the 153-page bill (HB 217) on Friday.

The proposed law “will level the playing field,” Rehwinkel Vasilinda said Monday.

She noted that Amazon now plans to build two distribution centers in Florida, in Hillsborough and Polk counties.

The news “renewed attention to the fact that there is a competitive disadvantage against in-state businesses in favor of out-of-state online retailers,” Rehwinkel Vasilinda said.

The Florida Retail Federation and the National Federation of Independent Business in Florida are among those in support.

“It is long past time to close the loophole that puts our state retailers at a disadvantage to remote sellers,” said John Fleming with the retail federation.

Here’s how it would work: Florida would have to join the Streamlined Sales and Use Tax Agreement, an interstate compact that encourages merchants in one member state to collect and submit another member state’s sales taxes. Twenty-four states now belong.

The agreement “minimizes costs and administrative burdens on retailers that collect sales tax, particularly retailers operating in multiple states,” according to its website.

Total tax money captured through the agreement since its inception in 1999 wasn’t immediately available.

But the reason for the measure’s failure to gain traction in Florida is that efforts even resembling a new tax are politically unpopular, especially now with Gov. Rick Scott’s drive to cut $500 million in state taxes and fees. Florida’s sales tax is 6 percent.

More recently, with Florida business interests making noise, both Republicans and Democrats talk about taxing online sales as a fairness issue, by making Web-based vendors collect the same tax as everyone else.

Rep. Ritch Workman, the Republican chair of the Finance and Tax subcommittee, has said that any online tax bill would have to be “revenue neutral,” meaning it would offset new tax revenue with, as one possibility, a sales tax holiday on school supplies and clothes.

In Florida, it is the buyer’s responsibility to pay tax directly to the state; there’s actually a separate 6 percent tax for out-of-state purchases. But almost no one pays that tax because it’s virtually unenforced.

Estimates vary on how much Florida would get if it captured taxes on its residents’ online purchases, from $200 million to more than $750 million.

The U.S. Supreme Court has ruled that out-of-state retailers who don’t have a physical presence in a state, such as a store or warehouse, can’t be forced to collect that state’s sales tax on purchases.

Its decisions effectively led to online purchases being cheaper with no sales tax to pay, especially on big-ticket items.

That contributed to the demise of big-box national retailers, such as Circuit City, and continues to hurt smaller brick-and-mortar stores, advocates say.

Scott said Amazon “will begin collecting Florida sales tax at such time as it is required under current Florida law,” meaning when its distribution centers are up and running.

Also, a bill in Congress would allow state governments to collect tax directly from online retailers.

The Marketplace Fairness Act passed the Senate and is now in the House, where it has been stuck in committee. That measure would require states to simplify their tax codes, including making uniform definitions of products taxed.

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