Tuesday, October 16, 2018
Business

Amazon to start collecting sales tax in Florida on May 1

Planning to buy something on Amazon? Better "add to cart'' now because the cost of most items is about to go up at least 6 percent for shoppers in Florida.

The online retail giant said Wednesday it will start collecting sales tax from Florida customers on May 1.

For many customers in Florida — including ones in Hillsborough, Pasco and Pinellas counties where the overall sales tax is 7 percent — that means the cost of a $16.95 book will go up by $1.19. In Hernando, where the tax is 6.5 percent, the increase will be $1.10.

"It will definitely discourage me from using Amazon,'' said Frank Mora of Ybor City, who makes about a dozen Amazon purchases a year. Instead, he'll search for other online retailers who don't collect the tax. "The bottom line for me is what's going to be the least expensive.''

Sales tax on Amazon purchases will generate an additional $70 million to $80 million a year in revenue for the state, a tiny fraction of the more than $20 billion in annual sales tax receipts statewide but still a significant amount for one company.

Retailers hailed it as a long time coming in ending an unfair price advantage for Amazon, which did $74.4 billion in sales in fiscal year 2013.

"I think it will go toward leveling the playing field for retailers in Florida,'' said Ray Hinst, co-owner of Haslam's Books, an 80-year-old independent bookstore in St. Petersburg. "It will help the brick-and-mortar stores.''

Statewide, lost sales tax revenue from e-commerce is estimated at more than $450 million annually. Amazon accounts for about 10 percent of all online sales in Florida.

Collecting sales tax comes as a result of Amazon establishing warehouses in Hillsborough and Polk counties for processing and shipping orders. Until now, the Seattle-based retailer hasn't had to collect sales tax from buyers in Florida because it didn't have a physical presence in the state.

Amazon spokesman Ty Rogers said Wednesday the company will be required to collect sales tax in Florida starting May 1 but wouldn't elaborate on the timing. The warehouses, known as fulfillment centers, aren't expected to start processing orders until the holiday shopping season later this year.

"As soon as they start hiring employees based in Florida, they are going to be triggering a lot of regulatory legal filings that are going to be creating physical nexus for them,'' said John Fleming, a spokesman for the Florida Retail Federation.

The issue of sales tax collection goes back to 1992 when the U.S. Supreme Court ruled a state can't require remote retailers without a physical presence to collect sales tax in that state. Buyers in Florida are still required to pay sales tax on purchases made over the Internet, but few do and many aren't even aware of the rule.

Amazon has been fighting state tax officials for years on the issue of sales collection and currently only collects the tax in 20 states. Overstock.com, an online home goods retailer, similarly has fought the sales tax issue and currently does not collect it in Florida.

In November, Amazon started building a 1.1 million-square-foot distribution center in Ruskin, near Interstate 75 off State Road 674. Once completed, the facility will employ up to 2,500 permanent and seasonal workers. Amazon has not started advertising for employees, but the county's top building official said that could start happening this summer.

The center will process small items, like books and CDs. The warehouse going up in Lakeland will handle large items.

Chris Brazzeal, general manager of Brazzeal's Tire and Service in Tampa, said he hoped that Amazon's collection of sales tax would lead to other retailers collecting the tax.

"For online tire wholesalers that are out of the state of Florida, they have $70 advantage over me automatically on a $1,000 set of tires,'' he said. "That can hurt a small, family-owned business like ours.''

Florida retailers have tried unsuccessfully for more than a decade to pass a law that would require out-of-state retailers to collect sales tax. The issue has gained support in recent years but has failed to gain traction among state legislators who argue it would amount to a new tax.

News researcher John Martin contributed to this report. Susan Thurston can be reached at sthurston@tampabay.com or (813) 225-3110.

   
Comments
Cross-Bay Ferry to dock at Florida Aquarium this winter

Cross-Bay Ferry to dock at Florida Aquarium this winter

TAMPA — The Cross-Bay Ferry is coming back with a few changes this winter.For starters, the ferry will dock behind the Florida Aquarium because of construction at the Tampa Convention Center. Port Tampa Bay approved the berth on Tuesday morning and a...
Updated: 12 minutes ago
Study: Without Medicaid expansion, poor forgo medical care

Study: Without Medicaid expansion, poor forgo medical care

WASHINGTON — Low-income people in states that haven’t expanded Medicaid are much more likely to forgo needed medical care than the poor in other states, according to a government report released Monday amid election debates from Georgia to Utah over ...
Updated: 1 hour ago
Five Tampa Bay area men indicted in what prosecutors describe as a billion-dollar health care scheme

Five Tampa Bay area men indicted in what prosecutors describe as a billion-dollar health care scheme

Five local men are wrapped up in what federal prosecutors are calling a billion-dollar telemedicine rip off.Starting in 2015, the men and their pharmacy companies set up an elaborate scheme that fraudulently solicited insurance coverage information a...
Updated: 1 hour ago
Report: Uber IPO could put company value at $120 billion

Report: Uber IPO could put company value at $120 billion

NEW YORK — Uber may put forth an initial public offering early next year that values the ride-hailing business at as much as $120 billion, according to a media report. The Wall Street Journal said Tuesday that Uber Technologies Inc. received valuatio...
Updated: 2 hours ago
Hurricane Michael: Significant crop damage expected in Florida Panhandle

Hurricane Michael: Significant crop damage expected in Florida Panhandle

Hurricane Michael impacted about 1 million acres of field crops and 3.6 million acres of upland forest in Florida, according to the University of Florida Institute of Food and Agricultural Sciences.The most serious damage affects about 200,000 acres ...
Updated: 3 hours ago
Realignment at Big Bend intersection promises safer traffic flow after construction headaches

Realignment at Big Bend intersection promises safer traffic flow after construction headaches

GIBSONTON – A new north-south road is coming to relieve traffic along U.S. 301, but making way for it promises some short-term traffic headaches for a South Shore region already stymied by congestion.The new road would run more than four miles...
Published: 10/16/18
Clearwater tweaks downtown incentive program

Clearwater tweaks downtown incentive program

CLEARWATER — On the heels of intensive meetings with downtown property owners and potential business tenants, the city’s Community Redevelopment Agency has tweaked its incentive programs designed to attract businesses that would operate...
Published: 10/16/18
Tampa’s last Sears survived bankruptcy closings, but Westshore Plaza is dropping Sears anyway

Tampa’s last Sears survived bankruptcy closings, but Westshore Plaza is dropping Sears anyway

Sears’ long-foreshadowed bankruptcy filing Monday came with the blow that more than 140 of its remaining 700 locations would be closed in a bid to save the once robust and venerable chain of department stores. But some locations not even on th...
Updated: 6 hours ago
Early Hurricane Michael claims: 38,000, $5.7M in damages

Early Hurricane Michael claims: 38,000, $5.7M in damages

As Panhandle residents began making their way back home over the weekend, clearer damage estimates began to arise: According to the Florida Office of Insurance Regulation, about 38,000 claims have been submitted for Hurricane Michael damage and $5.7 ...
Published: 10/15/18
Fish Tales Seafood House in St. Peterburg closes after nearly 20 years in business

Fish Tales Seafood House in St. Peterburg closes after nearly 20 years in business

Fish Tales Seafood House in St. Petersburg has closed its doors after nearly 20 years in business, the restaurant announced on its Facebook page Monday."It is with a heavy heart that I have to write this, but write it I must," the Facebook post state...
Published: 10/15/18