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A Times Editorial

Bring sales tax policy into 21st century

The self-described jobs governor says he gets it: Florida's antiquated sales tax policy leaves the state's retailers at a competitive disadvantage and costs local jobs in favor of Internet businesses based elsewhere. Now Gov. Rick Scott's obligation — as the state's unemployment continues to hover in the double digits — is to do more than commiserate. Scott should join with other independent-minded Republicans in the Legislature and the business community to level the playing field for Florida businesses.

Scott told the St. Petersburg Times editorial board last week that he recognizes the state's tax policy — written before the advent of e-commerce — costs Florida jobs. Bricks-and-mortar retailers in Florida, be they Walmart or the boutique shop or the local bookstore — are required to collect sales tax on all sales, even those they transact over the Internet. But Internet-only sellers such as can get away with not collecting state sales taxes, effectively selling their products for at least 6 percent less.

A similar problem exists with the Legislature's unwillingness to force out-of-state online travel booking firms to pay full bed and sales taxes on the hotel rooms they sell. Right now, they remit taxes based only on wholesale room costs, not retail costs as Florida hotels are required to do.

Every other major state gets it. California, New York and even Texas — starting this year — are pursuing collections from online-only sellers. And 24 smaller states are part of the Streamlined Sales Tax Governing Board, a group hoping to press Congress to take action on the issue nationwide.

By not joining these efforts, Florida's deference to carpetbaggers is a double whammy on the economy. Not only do state and local governments not collect taxes to maintain government services, local businesses also suffer, ultimately depressing their need to hire or keep employees. The status quo is also unfair to Florida consumers who support local businesses. They pay a greater share of the state's tax burden than a neighbor who shops at an online-only, out-of-state retailer.

Scott acknowledged the problem Thursday, even as the antitax governor fell short of promising to push lawmakers to act. He said he would only embrace a plan if it lowered Florida's sales tax rate for all purchases so that any revenue connected on Internet sales would not result in more taxes collected.

That sounded better a decade ago when it was proposed by then-Senate President John McKay, R-Bradenton, and e-commerce had not consumed so much of the economy. But lost revenue from Internet sales now tops at least $2.4 billion annually, according to a 2009 University of Tennessee study. That suggests taxes aren't being remitted from at least 8 percent of qualified sales. That additional money, on top of the $17.4 billion the state expects to collect this year in sales tax, could go a long way to solving the funding problems for public schools.

Scott is at least on the right side of this issue, and that is progress from the last administration. What the Florida Chamber of Commerce, the Florida Retail Association and Associated Industries of Florida have not been able to accomplish for more than a decade — creating a level playing field for Florida retailers — should be a high priority for the jobs governor.

Bring sales tax policy into 21st century 08/20/11 [Last modified: Friday, August 19, 2011 5:27pm]
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