The Tampa Bay Times

February 19, 2012

Something ridiculous is going on in the state Legislature right now.

That’s the first part of the story. The easy-to-understand portion of the tale.

In a time of declining revenue, severe budget cuts and frightening consequences for health care and education, our lawmakers have been handed a gift.

A simple, reasonable, wholly logical way to potentially increase state income by hundreds of millions of dollars every year.

To which they have replied:

Meh.

They may do it. They might not. But if they do, they want to make absolutely, positively sure that this isn’t additional revenue. They’ll only accept this money if they get to give back an equal amount of money.

To which you should reply:

Huh?

We have University of South Florida leaders shouting about “devastating” budget cuts. We have blue-collar folks traveling to Tallahassee to plead with lawmakers not to destroy small-town economies by shutting down state prisons.

We have mental health advocates talking of the dire consequences of cutting needed programs. We have educators considering four-day school weeks to save money.

And the Legislature is turning its back on stacks of cash?

Which brings us to the second part of the story. The more complex portion of the tale.

Lawmakers are blaming … you.

Maybe not you specifically. Maybe not your mother or neighbor or boss. But they claim they are Looney Tunes because we, as an electorate, have made them that way.

Let me back up a bit, and explain.

There are bills in the Senate and House this session that have to do with sales tax for online purchases. You would think this was a pretty straightforward issue.

If you buy, let’s say, a book in some adorable corner shop, you’re going to pay a sales tax. Yet if you buy it online, there is no mechanism for collecting a sales tax. So not only is the state missing out on potential revenue, but it’s also penalizing a locally owned business.

Some might say it is hard to argue against the idea of enforcing this so-called e-commerce law. I’d go so far as to say it is insane to argue against it.

Click here to read the rest of the column in the Tampa Bay Times.

By John Krotec

Letter in the Bradenton Herald

A sale is a sale — it’s that simple.

The free market works best when government isn’t picking winners and losers in business. But Florida’s Internet sales tax loophole provides a backdoor subsidy to Internet-only retailers at the direct expense of the state’s Main Street merchants.

A Feb. 13 letter (“Florida would be wrong to collect sales taxes on web purchases”) fails to understand that by taxing one group of retailers while giving a free ride to another group (out-of-state, online-only sellers) is the equivalent of a government subsidy. The only “big government” tax policy would be to continue the status quo, which is muscling Main Street out of business.

In the Miami Herald

February 18, 2012

Florida’s elected leaders need to end the competitive disadvantage faced by Florida retailers competing against out-of-state retailers for the same product sales, potentially costing Florida thousands of jobs and millions of dollars. For more than a decade, Florida TaxWatch has asserted that the state can level the playing field through the collection of legally owed — but at present, largely uncollected — sales tax on Internet or remote sales.

Fixing this inequity would not impose a new tax on Floridians, as sales tax on Internet purchases is already required by law to be paid. However, as the law currently exists, it’s the responsibility of the shopper to remit the tax payment directly to the state, rather than the vendor, and very few taxpayers are even aware that this is required of them. Evidence suggests that Florida is losing out on hundreds of millions of dollars each year from this tax not being collected, and the revenue from this collection can be used to reduce other taxes currently hurting Floridians.

February 18, 2012

Since the advent of e-commerce — online retailers with products to sell — a major advantage has been a national and international marketplace devoid of sales tax collections for the most part.

The rule is that if an online retailer does not have a physical presence in the state, it does not collect sales tax on items sold. But escaping sales tax collections is starting to halt. Already more than a dozen states have laws governing online sales tax collections, according to USA TODAY. An information graphic in USA TODAY on Feb. 9 showed that Florida is among 10 states this year in pursuit of sales tax collections from online retailers.

Last week in the Florida Senate, a committee substitute for Senate Bill 1514  passed the banking and finance committee, 9-1. Its next stop is the Senate appropriations committee and if it is approved there, then it is on to the Senate floor for a vote. But a House version has not moved on in the House. It’s possible that the House is waiting for the Senate’s bill to pass first.  Whatever the plan, we support the passage of an online sales tax collection bill and then being signed into law by the governor.

Click here to read more.

February 18, 2012

Few Floridians are even aware of the tax, and even fewer pay it because the state allows its residents to make such purchases under the honor system.

Most online or mail-order retailers collect this use tax — if they have conventional stores or large warehouses in Florida. Retailers, large and small, without that physical presence generally don’t collect the tax.

Purchasers are supposed to keep track of taxes owed and submit payment to the Florida Department of Revenue: There’s even an official form, DR-15MO. Details online: http://dor.myflorida.com/dor/taxes/consumer.html.

But the requirement isn’t enforced and, as a result, Florida forgoes an estimated $450 million in taxes because of the lack of collections and payments. The amount of potential tax revenue is likely to escalate to $1 billion annually by 2020.

Several factors have led to reform consideration:

Persistent budget shortfalls.

The growth of online shopping.

The emergence of support from giants, such as Walmart Stores and Target Corp., in addition to small businesses represented by the Florida Retail Association.

In-state retailers with brick-and-mortar stores argue that the status quo is unfair to businesses that not only collect sales taxes but pay other taxes in Florida. They are correct.

Click here to read more.

February 17, 2012

An influential state Senate committee looked past a short-term crisis Thursday to try to fix one of Florida’s systemic problems. The Senate Banking and Insurance Committee embraced a plan that would require most Internet vendors selling to Floridians to collect and remit sales taxes — finally eliminating a huge disadvantage faced by traditional Florida retailers. Now House Speaker Dean Cannon needs to take up the cause.

By a 9-1 vote, the Senate committee — which includes incoming Senate President Don Gaetz, R-Niceville, and Senate Budget Chairman JD Alexander, R-Lake Wales — agreed to add Florida to the list of states updating their sales tax laws to reflect the advent of e-commerce. Economists have projected Florida will fail to collect as much as $454 million in sales tax revenue in 2012 on goods bought from Internet-only vendors such as Amazon.com. That puts traditional brick-and-mortar Florida merchants — including those that also sell goods on the Internet — at a disadvantage as they must collect the 6 percent sales tax. That impacts Florida’s economy negatively in two ways: In-state employers lose business, suppressing employment; and state and local governments fail to collect needed revenue for everything from prisons to public schools.

Before Gaetz and Alexander signed on, however, the plan (SB 1514) offered by Sen. Nancy Detert, R-Venice, was amended so the state would collect no additional revenue. Under the bill, the state Department of Revenue will keep track of the revenue from Internet sales and then the Legislature will authorize a similar-sized sales tax holiday. The bill has one last stop, Alexander’s budget committee, before it’s ready for the Senate floor.

In an ideal world, closing this loophole wouldn’t require that it also be revenue neutral. Florida, a state that depends on sales tax revenue for 70 percent of its general revenue, should maintain as broad a sales tax base as possible to meet the needs of an ever-growing population.

But Alexander warned that without such a caveat, Detert’s bill could never pass the Senate, much less the full Legislature, during an election year. Critics, he said, would inevitably and unfairly tar incumbents who vote for it as having raised taxes. “I’ve seen this issue languish for years,” Alexander told Detert on Thursday. “The good is better than the perfect.”

Click here to read more.

The Tampa Tribune

February 10, 2012

TAMPA — Florida lawmakers want Internet retailers such as Amazon to start collecting and handing over sales taxes when consumers in the Sunshine State shop online.

The push to get it done may go nowhere this year, lawmakers say, in part because it appears Amazon simply can refuse to do it.

That’s because Amazon has no physical presence in Florida. The Seattle-based retailer sells billions of dollars in merchandise here every year, but it has no warehouses in Florida. No delivery trucks. No employees.

That means Amazon has no “nexus” of operation — a term introduced into the laws of commerce before there was an Internet — so Florida has no more legal standing to force payment of sales taxes than Nevada has to set speed limits in Ohio, tax experts say.

That puts retailers in Florida at a disadvantage and robs the state of tax revenue, says Randy Miller, executive vice president of the Florida Retail Federation.

“We’ve been hoping to get some momentum on this for the last 10 years,” Miller said.

Forcing Amazon’s hand might dissuade the online sales giant from ever opening a warehouse here, with all the jobs that might bring.

Still, Miller said, the state might gain the upper hand in the long run, and Amazon is beginning to see it will have to cough up some money as online sales gain a bigger and bigger share of all retail sales.

“Florida’s now the fourth-largest state, probably third soon,” Miller said. “You cannot ignore that kind of market forever.”

Click here to read the rest of the article.

The Gainesville Sun

February 9, 2012

Florida has a 6 percent tax on goods bought from out-of-state retailers — with no “physical presence” in the state — via the Internet or mail. But few Floridians are even aware of the tax, and even fewer pay it.

Most online or mail-order retailers collect the so-called use tax — if they have conventional stores or large warehouses in Florida. Retailers, large and small, without that physical presence generally don’t collect the tax.

Purchasers are supposed to keep track of taxes owed and submit payment to the Florida Department of Revenue. But the requirement isn’t enforced and, as a result, Florida forgoes an estimated $450 million in taxes a year because of the lack of collections and payments. The amount of potential tax revenue is likely to escalate to $1 billion annually by 2020 as online commerce continues to grow.

Several bills filed in the Legislature would change the system and require online and mail-order sellers to collect a 6 percent tax on sales, just as retailers in conventional stores must do.

Click here to read the rest of the article.

(Tallahassee, FL – February 3, 2012) Top business leaders today thanked lawmakers for advancing E-Fairness legislation through two key Senate Committees. Chaired by Senator Jim Norman (R-Tampa), the Florida Senate Finance and Tax Committee introduced S.B. 2098. The bill, which was championed by Senator Evelyn Lynn (R-Daytona Beach), would expand the definition of “physical nexus” and “affiliate nexus” to include online-only sellers, such as Amazon. Governor Scott has voiced his support for closing the online sales tax loophole so long as any legislation remains revenue neutral.

Notably, S.B. 2098 contains a provision that would render it revenue neutral. The bill is set to be voted out of committee at an upcoming meeting. S.B. 1514, sponsored by Senator Nancy Detert (R-Venice), was also heard in the Senate Commerce Committee on Thursday. As amended, the bill passed.

“Members of the Florida Senate have taken an important step toward closing a loophole that has been hurting Florida’s businesses for too long,” said Rick McAllister, president and CEO of the Florida Retail Federation. “The government should not be picking winners and losers. We commend the members of the Florida Senate for their commitment to a level playing field for Florida businesses.”

“This is a major step forward,” said Mark Wilson, President and CEO of the Florida Chamber of Commerce. “We applaud lawmakers for advancing revenue-neutral E-Fairness legislation in the Senate. It represents a lifeline to struggling small businesses and Senate leaders deserve a lot of credit for their timely efforts in support of Main Street.”

“This is a very encouraging sign,” said new AIF CEO, Tom Feeney. “In these tough economic times, nothing is more important than restoring a level playing field for Florida’s small businesses. We commend lawmakers for advancing two pieces of landmark legislation to do just that.”

The Florida Alliance for Main Street Fairness is a coalition of small businesses, trade associations and civic groups, which includes the Florida Retail Federation, the Florida Chamber of Commerce and Associated Industries of Florida. The Alliance is supporting E-Fairness legislation that would help level the playing field for Florida-based businesses, which are at a government-sponsored competitive disadvantage to out-of-state, online-only sellers.

In addition to S.B. 2098 and S.B. 1514, Rep. Mike Horner (R-Kissimmee) has filed H.B. 861 in the Florida House to address the online sales tax loophole. Click here to read H.B. 861. Other E-Fairness bills include H.B. 1085, filed by Rep. Greg Steube (R-Sarasota).

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