If Gov. Rick Scott really wants to help Florida's small businesses and encourage jobs, there is a better option than his cutting corporate income taxes for a mere 2,000 small businesses. The governor should be moving to modernize the state's sales tax to require Internet retailers to remit taxes on the goods sold to Floridians. That would level the playing field for Florida's 250,000 retailers and ultimately create more demand for Florida jobs.
For more than a decade, out-of-state Internet-only sellers, particularly corporate giants like Amazon.com, have been making money in Florida without collecting sales taxes, unlike Florida retailers who are required to collect and remit sales taxes.
The result has been unfair competition for brick-and-mortar Florida stores and their website counterparts, lost jobs, and lost revenue for state and local governments that need the money for everything from prisons to schools. This year alone, the state will fail to collect an estimated $454 million in sales taxes on Internet sales.
It doesn't have to be this way. For years, several smaller states have worked on a consortium aimed at creating a national sales tax collection system — and there's hope Congress may still act on it. That effort would get more traction if a major state like Florida would get on board.
Several states — from Texas to New York — have taken on the Internet sellers directly. Earlier this year, an influential Florida Senate committee that included incoming Senate President Don Gaetz, R-Niceville, voted for a bill that would have demanded such sellers collect and remit sales tax. But like several attempts in previous years, it ultimately died without reaching the full Senate or being heard in a House committee — even after Gaetz insisted that the bill be made revenue neutral. The Department of Revenue would have kept track of the dollars collected from Internet sales tax, and the Legislature would have authorized a similar-sized sales tax holiday. Florida could use the revenue, but the bill would have at least made the tax system fairer.
It would be easier for Scott to pass his small-bore business tax break through the Legislature, but if the governor really wants to improve Florida's business climate and create jobs, he should push to modernize the sales tax system that discriminates against 250,000 of Florida's businesses and the customers who shop there. This shouldn't be a hard decision. The governor should stand with Florida retailers and their customers — not out-of-state Internet retailers.