An influential state Senate committee looked past a short-term crisis Thursday to try to fix one of Florida's systemic problems. The Senate Banking and Insurance Committee embraced a plan that would require most Internet vendors selling to Floridians to collect and remit sales taxes — finally eliminating a huge disadvantage faced by traditional Florida retailers. Now House Speaker Dean Cannon needs to take up the cause.
By a 9-1 vote, the Senate committee — which includes incoming Senate President Don Gaetz, R-Niceville, and Senate Budget Chairman JD Alexander, R-Lake Wales — agreed to add Florida to the list of states updating their sales tax laws to reflect the advent of e-commerce. Economists have projected Florida will fail to collect as much as $454 million in sales tax revenue in 2012 on goods bought from Internet-only vendors such as Amazon.com. That puts traditional brick-and-mortar Florida merchants — including those that also sell goods on the Internet — at a disadvantage as they must collect the 6 percent sales tax. That impacts Florida's economy negatively in two ways: In-state employers lose business, suppressing employment; and state and local governments fail to collect needed revenue for everything from prisons to public schools.
Before Gaetz and Alexander signed on, however, the plan (SB 1514) offered by Sen. Nancy Detert, R-Venice, was amended so the state would collect no additional revenue. Under the bill, the state Department of Revenue will keep track of the revenue from Internet sales and then the Legislature will authorize a similar-sized sales tax holiday. The bill has one last stop, Alexander's budget committee, before it's ready for the Senate floor.
In an ideal world, closing this loophole wouldn't require that it also be revenue neutral. Florida, a state that depends on sales tax revenue for 70 percent of its general revenue, should maintain as broad a sales tax base as possible to meet the needs of an ever-growing population.
But Alexander warned that without such a caveat, Detert's bill could never pass the Senate, much less the full Legislature, during an election year. Critics, he said, would inevitably and unfairly tar incumbents who vote for it as having raised taxes. "I've seen this issue languish for years," Alexander told Detert on Thursday. "The good is better than the perfect."
Unfortunately, similar bills in the House have failed to be heard by a single committee so far — despite the support of Associated Industries of Florida, the Florida Chamber of Commerce, the Florida Retail Federation, AARP and the Florida School Board Association. That runs counter to every Republican legislative leader and Gov. Rick Scott's claims that their top interest this session is protect and attract Florida jobs.
Actions speak louder than words. On Thursday, Gaetz, Alexander and by extension Senate President Mike Haridopolos signaled they're for Florida businesses, their workers and a brighter future. Now it's Cannon's turn.