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A Times Editorial

Florida can't afford Internet sales tax loophole

Gov. Rick Scott, Senate President Mike Haridopolos and House Speaker Dean Cannon have been all too happy to stand by and let the nation's Internet-only retailers reap huge competitive advantages over Florida merchants, thanks to a giant loophole in sales tax policy. But now that the largest among these carpetbaggers — — is engaging in predatory practices specifically designed to undermine bricks-and-mortar retailers, will they finally stand up for Florida merchants, workers and schoolchildren by passing Internet sales tax reform? Or will they continue to do the bidding of out-of-state companies who don't employee Floridians or support our communities?

The company that has blocked sales tax reform across the country launched an all-out attack on traditional retailers this month. Amazon transformed its vast customer base into an army of corporate spies. Customers who used Amazon's price-check application in a traditional store that day could buy select items from Amazon for 5 percent less. The gimmick cost Amazon little. Customers could collect no more than $15 in savings over three items. But in exchange, the behemoth gained a vast collection of information on its competition, from big-box retailers to mom-and-pop shops.

It's another example of how technology, and Amazon's skillful deployment of it, is changing the dynamics of commerce more rapidly than state and federal laws can catch up. For years, the company and other Internet retailers with no physical presence in Florida have exploited outdated tax policy that provides no mechanism for collecting sales taxes from out-of-state sellers, which gives them at least a 6 percent pricing advantage. As e-commerce has exploded, it has robbed state and local coffers of billions, impacting everything from school to prison funding. This year's loss alone to state coffers is estimated at $450 million by one economist. But it has also cost Florida jobs, as retailers outbid on the Internet can't afford to hire additional workers or expand their stores.

Finally in Tallahassee, there is acknowledgement among some in the Republican majority that the status quo is costing the state needed revenue after years of budget cuts. Sen. Jack Latvala, R-Clearwater, who is bidding to be a future Senate president, said as much at a recent Pinellas County delegation meeting. Last week, the governor said he would sign a bill making it easier to collect sales taxes on Internet sales, but only if it was revenue neutral (meaning the increased revenue was offset with tax cuts elsewhere). That's headed in the right direction, though it buys into the fallacy that collecting taxes due the state is a tax increase.

Now it's time for Scott, Haridopolos and Cannon to make it happen. The three join a long line of Tallahassee politicians so leery of being called tax increase supporters they won't push for tax fairness — even though it comes at the expense of Florida business owners, their workers, schoolchildren and the state's future. This latest Amazon stunt makes clear that if the governor is really interested in attracting and protecting Florida jobs, the last thing he should be doing is standing on the sidelines while an out-of-state, predatory business gets a tax break.

Florida can't afford Internet sales tax loophole 12/27/11 [Last modified: Tuesday, December 27, 2011 4:53pm]
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