It was another win for out-of-state businesses in Tallahassee when a judge said he couldn't require Internet travel firms to pay their fair share of state and local tourist taxes — a decision that Florida counties have pledged to appeal. But the real takeaway from Circuit Judge James O. Shelfer's sometimes-rambling bench ruling earlier this month: Republican legislative leaders' stubborn refusal to update the state tax code for the Internet age continues to benefit carpetbaggers over Florida businesses.
The Legislature has had years to clarify the law that stumped Shelfer and that is the subject of two other pending lawsuits between out-of-state travel services and the Florida counties they've bilked on tax collections. Since at least 2009, counties have been asking lawmakers to amend the state's tourist tax laws to make it crystal clear that online travel sites such as Expedia, Orbitz and Travelocity must remit the same amount of taxes as a Florida hotel does on the same-priced room.
But the travel firms have contended such tourist tax laws in Florida and around the country — most written before the advent of the Internet — only apply to the wholesale price they paid the hotelier for a room, not on the price the customer pays them. That faulty nuance will rob the state and Florida's counties of an estimated $37 million in revenue next fiscal year, leaving local jurisdictions far less cash to promote their communities.
Never mind that the practice on some sites has been to charge the consumer tax on the retail price of the room but then only remit the wholesale portion. Tallahassee's legislative leaders have continued to let them get away with it, despite pleas from Florida's hotel industry that it creates a competitive disadvantage. Former Attorney General Bill McCollum, in the midst of the 2010 governor's race, pledged to sue but never filed the paperwork. Attorney General Pam Bondi's inaction also has played to the carpetbaggers' advantage.
The indifference has frustrated some counties, which last year signed multiyear settlements with some travel firms in return for cash payments. Yet 17 counties, including Pinellas, Hillsborough and Pasco, forge on in the lawsuit that was before Shelfer last week. The counties' attorneys predict an appellate court will see things differently.
The Legislature and the executive branch in Tallahassee have failed to protect Florida businesses that hire Floridians. Just like Republican leaders' inaction continues to allow carpetbagger Internet merchants like Amazon.com to avoid remitting sales taxes, they are acquiescing to out-of-state travel firms.
State leaders should care that this isn't a level playing field. State leaders should care about Florida jobs.