The Florida Chamber of Commerce, Florida Retail Association and the Associated Industries of Florida should send a thank-you note to California. Legislators in the Golden State, in negotiating a deal that requires Amazon.com to lobby Congress to pursue a national sales tax collection system, have provided the best chance yet to create a level playing field in Florida and elsewhere for bricks-and-mortar retailers. Never mind that Florida Gov. Rick Scott and Senate President Mike Haridopolos, in recent weeks, have both conceded that Florida's current sales tax policy is unfair and outdated; both men have followed the lead of their predecessors and done nothing to change it.
The deal struck between California lawmakers and Amazon.com was a truce. The nation's most populous state earlier this year passed a law that would require Internet-only retailers to collect sales taxes on goods sold in California. Amazon.com countered by pouring millions into a campaign to put a petition on the ballot to negate the law. Finally, in the waning hours of the legislative session last month, lawmakers agreed to delay implementation of the tax requirement for a year as long as Amazon.com dropped its ballot drive and pressed Congress to pass national sales tax legislation in the meantime.
That is significant. For more than a decade, as e-commerce has gained more and more of the retail sector, squeezing bricks-and-mortar retailers and robbing state coffers of revenue by refusing to collect sales taxes, Amazon.com has been a primary opponent of new tax rules. Now, thanks to California forcing its hand, the mega-merchant has agreed to lobby for the "Main Street Fairness Act," a proposed federal law that would clarify how states might levy sales taxes on out-of-state online-only retailers. The effort builds on the Streamlined Sales and Use Tax Agreement, an effort by more than 20 mostly small states to unify their tax codes to make such a national collection system possible.
For years, every major Florida business group has pushed for the state to join the Streamlined group, rightly arguing the outdated tax code discriminates against their members. While any business with a traditional store in Florida must collect the 6 percent state sales tax on goods, out-of-state online-only merchants don't. That gives them an enormous pricing advantage. Florida TaxWatch has estimated the shift to e-commerce has cost at least 100,000 Florida jobs. And a University of Tennessee study estimates Florida will lose more than $800 million in uncollected sales taxes this year for goods bought through merchants like Amazon.com.
Even Republican-controlled Texas has joined California and New York in championing this cause of tax fairness. Meanwhile, in Tallahassee, favoring out-of-state carpetbaggers over businesses that employ Floridians is far more acceptable. Thank goodness for California.