TALLAHASSEE, Fla. (FNN) – The Florida House Ways and Means Committee held a panel on legislation aiming to require out-of-state sales businesses to begin collecting sales taxes on items when those sales occur in Florida.
The new legislation, comprised of State Bill 50 and House Bill 15, follows state laws passed in South Dakota in 2018 after a case against home retailer Wayfair, which requires that businesses collect sales tax if they had 200 sales transactions a year or $100,000 in sales within the state.
Debbie Harvey, president of surf store Ron Jon Surf Shop and former president of the Florida Chamber of Small Commerce, indicated during the panel that the lack of a sales tax for online retailers outside of Florida allows them to offer prices between six and seven percent cheaper.
“We believe strongly in giving back, but this lack of enforcement puts me at a disadvantage over those that don’t give back to the state of Florida,” she said.
Larry Sinowitz, president of BrandsMart USA, a local electronics retailer, said that they can compete with major players like BestBuy and Costco because of fair competition, but are “getting killed by people who come into our market and not follow the rules.”
Clara Arrington of DotcomFurniture tells that some customers walk into showrooms, even try outfits on, take a picture of the label and then purchase the product online. The practice is informally known as “showrooming.”
Tim Nungesser, Legislative Director of The Florida Small Business Association, the local chapter of the National Federation of Independent Business (NFIB) confirms that the current laws hit small businesses the hardest. “State legislature has set the speed limit at fifty, and effectively for the past decade that the Department of Revenue says ‘ignore that limit’, and you have people driving at eighty,” he said.
Nungesser added that the issue is “complex” and while the NFIB remains neutral on the bills, he said they would oppose making the remote sales tax collection retroactive and extending it to services.
However, “having a streamlined tax collection service is certainly something we would support, particularly for out-of-state owners.”
The legislation, in general, gets a pass from online trade association Netchoice, since it follows many guidelines set by South Dakota v. Wayfair, explained Netchoice president Steve DelBianco. He added, however, that with the current legislation, the money collected by Florida would not be “new” money.
“Of the top 25 e-commerce retailers…forty percent are collecting from Florida. It will bring incremental revenue but not from the top twenty-five,” he said. “The money that comes in is from the Florida consumers that buy from those dealers.”
Mike Shutley, Amazon Senior Manager for Public Policy with Special Focus for State and Local tax policy for Amazon, spoke “on behalf of marketplace facilitators to collect the sales and use tax on Florida to facilitate third party sales.”
Amazon has invested 9.5 billion in Florida since 2010, creating over 40,000 jobs for Floridians, according to Shutley. “What you may not know is that there are more than 140,000 small business sellers and independent authors in Florida reaching customers around the world through Amazon marketplaces products and services,” he added.
All these small sellers and authors would be sometimes “confused” by the many state laws, and enacting a market facilitator law would resolve that confusion, he said. “This legislation is crucial to protecting small businesses.”
Florida-based retailers do have to collect a sales tax and remit them on purchases made outside of the state since only 22 states have a streamlined sales tax system.
“This legislation cannot protect Florida sellers from the burdens that are imposed by other states,” said NetChoice’s DelBianco. “Florida can lead by example and try to make it as simple as they can for businesses to collect when people from out of state make purchases, but you can’t with HB 15 protect Florida companies from the burdens.”
Juan Carlo Rodriguez is a politics and entertainment reporter for Florida National News. | email@example.com