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Florida Legislature considers pair of bills for online sales tax

TALLAHASSEE — It's a question that tests the Florida Legislature's aversion to new taxes and its pro-business mantra: Should state law require online retailers to pay sales taxes?

On Thursday, state legislators began their push to do just that, moving forward on a pair of proposals that would force online-only companies — and people who buy goods on the Internet — to pay the state's 6 percent sales tax.

The business community strongly supports the measures, saying competition from retailers like Amazon and eBay is putting local companies out of business.

"It's an issue of fairness," said Rick McAllister, president and CEO of the Florida Retail Federation. "In our mind, it's not about the taxes collected, it's about the competitive nature of our business."

According to current law, companies that do not have a physical presence in Florida — a store or a warehouse, for example — do not have to collect sales taxes. With a growing number of states pushing so-called "e-fairness" bills, proponents believe this will be the year such a tax law passes.

But the law, in effect, would lead to higher taxes on shoppers, with some estimates putting the cost as high as $1 billion per year, about $50 for every man, woman and child in Florida.

One of the proposals, introduced Thursday in a Senate committee, would offset that tax hike with some sort of consumer tax break. Under that proposal, the Department of Revenue would track the amount of money brought in, and consumers would get a tax break roughly equal to that amount.

"It could be the sales tax holiday, it could be lowering the tax rate, it could be implementing any other tax relief that is decided upon by our state," said Sen. Evelyn Lynn, R-Ormond Beach, who is backing the legislation. Gov. Rick Scott has said he would consider an online tax only if it was revenue neutral, meaning it would be offset by tax relief for consumers.

A second bill, passed out of the Senate Committee on Commerce and Tourism on Thursday, does not include a provision for revenue neutrality. Sen. Nancy Detert, R-Venice, the bill's sponsor, also pitched it as a way to level the playing field for local businesses.

To avoid the tax, Amazon is talking to state legislators about spending up to $200 million to build distribution centers in Florida, creating as many as 3,000 jobs. Amazon has said that it will build the centers only if it is given a break on sales taxes until 2014.

The business community has balked at the proposal.

"We just want them to play by the same rules that everyone else plays by," McAllister said.

Florida Legislature considers pair of bills for online sales tax 02/02/12 [Last modified: Thursday, February 2, 2012 11:31pm]
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