Today's release of unemployment rates for December is expected to fuel concern that Florida could soon hit 12 percent, a rate not seen since the end of World War II. So it's increasingly hard to understand why the state's Republican leaders continue to ignore the unfair advantage given out-of-state, online merchants at the expense of Florida's retailers.
Leveling the playing field would potentially increase employment in the retail sector and improve the state's finances. Yet taxing Internet retail sales was barely discussed at last week's job summit in Orlando hosted by legislative leaders. That's not fair to Florida businesses, their workers or their customers.
The state's antiquated sales tax fails to collect taxes from many Internet retailers — such as Amazon.com — that sell goods to Florida residents but have no bricks-and-mortar presence in the state.
The unfair tax policy undermines Florida jobs in two ways. First, by not charging tax, Internet retailers can undercut Florida retailers' prices. That lessens the need for in-state retailers to hire sales staff. Second, the lost tax revenue means state and local governments have fewer resources to retain their work force to staff everything from schools to prisons.
During the most recent holiday season, market research firms estimate 7 percent of all goods were purchased online. Yet Florida saw no tax benefit from such sales in the state unless the Web site was connected to a traditional, in-state retailer. Last year, such sales cost the state an estimated $1.97 billion in sales tax revenue, according to a nationwide analysis by University of Tennessee faculty. This year, the study estimates Florida will lose $2.4 billion — or roughly the size of the state's projected budget deficit.
Other states get it. During the past decade, 23 mostly small states have joined the Streamlined Sales Tax Governing Board in its effort to push Congress to adopt a national sales tax compliance system for Internet merchants. The members agree to align their tax policies to make it easier for retailers to voluntarily comply across state lines. The process would initially cost Florida some money, a fact Republican leaders have used as cover for not acting.
But such a view is incredibly shortsighted. And rank-and-file Republicans are starting to catch on. Late last year, Rep. Ed Hooper, R-Clearwater, told the Suncoast Tiger Bay Club that collecting Internet sales tax should be among the Legislature's top priorities, not only for revenue reasons but because the status quo is unfair. Hooper gets it. Now when will the rest of the Legislature?