By Jim Turner, The News Service of Florida
TALLAHASSEE — A proposal that could pump more than $600 million a year in tax dollars into coronavirus-damaged state and local coffers got off to a quick start Monday in the Florida Senate.
But backers of the proposal (SB 50), which drew unanimous support from the Senate Commerce and Tourism Committee, just don’t want anyone calling tax collections required in the bill a “new” tax.
Sen. Joe Gruters, who doubles as chairman of the state Republican Party, said his proposal simply requires online businesses with no physical presence in Florida to collect sales taxes when customers in Florida make purchases.
“This is all about fairness, fairness to our local communities, fairness to our local brick-and-mortar shops that are struggling as they’re competing on some of these low-margin items against foreign competitors,” Gruters said.
Currently, through what is sort of an honor system, Florida residents are supposed to submit the tax money when it is not collected by out-of-state retailers.
“I think this bill will help consumers at the end of the day, because most don’t have the wherewithal to go on to the Department of Revenue website to download those forms to calculate the taxes that are out there,” said Gruters, a Sarasota Republican who is a certified public accountant.
However, Karen Woodall, executive director of the Florida Center for Fiscal and Economic Policy, cautioned that even though the sales tax already exists, the effort remains “regressive” for Floridians who “have not been paying” the tax on online purchases.
“If you’re going to raise the state sales tax, we’re encouraging you to also look at returning the state corporate income tax rate that was there before 2018 as a fair way to raise revenue,” Woodall said.
Rich Templin, a lobbyist for the Florida AFL-CIO, said the state needs to take a bigger view on meeting revenue needs, as the bill will impact front-line workers and, regardless of technicalities, will be viewed as a “new tax.”
“When they make their online purchases, they will be spending more on those purchases,” Templin said.
Gruters’ bill will be considered during the legislative session that starts March 2, as lawmakers also grapple with major budget problems stemming from the coronavirus pandemic.
While an estimate hasn’t been issued for the bill, a staff analysis of a similar proposal Gruters filed for the 2020 legislation said the change would generate $479 million for the state government and $132.9 million for local governments during this fiscal year..
But fears about the proposal being considered a new tax have stymied efforts to pass it, even though the change has been supported by large business groups, the Florida League of Cities and the Florida Association of Counties.
As state and local governments face budget crunches — and as the pandemic has led to more shopping online — a task force led by officials from Associated Industries of Florida, the Florida Retail Federation, the National Federation of Independent Business Florida and the Florida Restaurant & Lodging Association included the online sales tax collection in a list of proposals for the 2021 legislative session.
Tallahassee-based Florida TaxWatch for years has argued the proposal would ensure online dealers don’t have an advantage over brick-and-mortar stores in selling the same products without the added state tax.
“They are invading our markets, and we are not collecting the sales and use tax. We are putting our own employers at a clear competitive disadvantage,” TaxWatch President and CEO Dominic Calabro said. “This needed to be done before this pandemic and absolutely must be done because of the pandemic.”
Gruters’ 2020 proposal did not get through Senate committees. The House never took up a version of the bill, which was sponsored by Rep. Chuck Clemons, a Newberry Republican who is again sponsoring the issue for the 2021 session (HB 15).
Many online sales to Floridians are taxed if, for example, retailers have stores or other operations in the state. But Gruters’ proposal uses a 2018 U.S. Supreme Court decision in a case known as South Dakota v. Wayfair as a basis for trying to require other out-of-state businesses to collect and remit the taxes to Florida.
The decision against Wayfair, a large online retailer with no physical presence in South Dakota, overturned a “physical presence test,” expanding states’ abilities to collect sales taxes.
A South Dakota law, which focuses on remote sellers with $100,000 of sales or 200 individual transactions into the state, has since been copied by 43 states and the District of Columbia. Another 38 states and D.C. have set up marketplace provider collections.
Florida Senate President Wilton Simpson, R-Trilby, has highlighted the proposal as a way for lawmakers to offset a projected $2.75 billion revenue shortfall. Simpson has also proposed establishing a new gambling agreement with the Seminole Tribe of Florida.
— News Service Assignment Manager Tom Urban contributed to this report.
…and another thing which has always been frustrating… We already pay federal taxes on our income, then, with AFTER FED TAX MONEY in our pocket, we are paying taxes and hidden fees yet AGAIN on a myriad of services from utilities, communications, waste collection, police & fire, schools, local, county, ad nauseum.
Just in case any bring up the fed “standard deduction”. Yeah nice, robbing Peter to pay Paul. And that didn’t work out for everyone either.
Senators clean up YOUR OWN house. You WILL be voted out.
Online retailers aren’t using local services so why should they pay tax like they do? Or rather why should I? We need less taxes not more.
01) SO, you are expecting out of State Businesses to use THIER Time and Resources to collect Sales Tax and then send you a Check or On Line Payment at their cost?
02) How much of that 7.5% Tax are you going to share with that Business to collect the Tax for you?
03) What happens to the Businesses if they choose NOT to collect the Tax for you?
04) Do Florida Businesses collect Taxes for the other 49 States and send it to them?
Funny how the discussion NEVER seem to find its way into the arena of cutting wasteful spending, entitlement fraud, political pork, et al… “always more; never enough”
Oh, and don’t call it a “new tax”… lets just call it an “undocumented collection of a fiscal nature”
“Amazon and other big Online players” already collect and remit taxes on taxable purchases from residents of Florida.
Lord knows Florida needs this additional revenue at this time of Covid.
On the flip side Lord also knows which Senators and Representatives are open to some contributions from Amazon and other big Online players to shut any plan for additional online revenue down.
Some of the backers of the proposal may only be backing the proposal in order to entertain offers from Amazon and others to kill the proposal.
In politics things are seldom what they seem to be.
How about catching those who bring expensive aircraft into the state and evade sales tax?