Internet tax balloon still tethered in Florida

By Jennifer Liberto, Staff Writer
In print: Sunday, March 16, 2008

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TALLAHASSEE — More and more Floridians are buying shoes from zappos.com and flowers from proflowers.com.

And it's all tax free.

Proponents of collecting taxes on Internet sales say the state could rake in $2-billion annually and plug gaping holes in the state budget.

But proposals to collect such taxes appear doomed again because too many Republicans consider them tax hikes, which won't fly in an election year.

"I think we're already overtaxed as is. I still have reservations about it," said Sen. Mike Haridopolos, R-Indialantic, who controls a Senate tax committee.

He thinks the potential revenue is "significantly smaller" than what proponents say.

The state now collects sales tax from Floridians who make retail purchases on the Internet, but only when the retailers have actual bricks-and-mortar stores in Florida.

Twenty-two states have passed laws allowing voluntary sales tax collection on most Internet purchases.

Florida's Taxation and Budget Reform Commission, which gathers every 20 years to rearrange Florida's tax system, wants the Legislature to pass a measure that would add Florida to the other 22 states.

But even with those changes, states cannot force retailers in other states to collect and deliver sales tax until federal law is changed. That's unlikely any time soon.

Taxing online transactions has never gotten far in Florida. The last major push fizzled in 2004 under then-House Speaker Johnnie Byrd.

Even taxation commission chairman Allan Bense acknowledges he ignored such proposals when he was House speaker because state government had more money in those years.

He supports the idea now because "times are tougher."

Despite the budget crunch, Gov. Charlie Crist said earlier this week he would oppose such legislation because it's a tax that would take money out of consumers' pockets.

And bills that already have been filed on the issue are "dead," said bill sponsor, Sen. Steve Geller, D-Cooper City.

The remaining option for imposing the sales tax collection measure this year would be for the Taxation and Budget Reform Commission to pitch the measure as a constitutional amendment to go straight to voters to consider this November. Although the group has such a proposal in writing, both Bense and the group pushing the idea, the Florida Retail Federation, acknowledge it's unlikely to happen.