Sales & Use Tax Blog

Florida Sales Tax Bill Could Enforce Compliance

Online companies may be forced to collect and remit Florida sales tax on transactions with Florida customers based upon a Bill filed by Republican Sen. Joe Gruters of Sarasota, FL on August 14, 2019. The Bill, which will be considered in the 2020 Legislative Sessions, is the second effort Senator Gruters has made in relation to leveling the playing field between online retailers and traditional brick-and-mortar stores with physical locations in Florida.

The new Bill, Senate Bill 126, would apply to all online companies regardless of physical presence in the state of Florida. The new proposal would target large online companies like Amazon that, for years have escaped paying Florida sales tax. Businesses must have at minimum of 200 annual sales transactions within Florida or generate over $100,000 in annual revenue within Florida for this Bill to apply to them.

With current procedures in place, customers are responsible for determining the Florida sales tax amount and then sending in a check to of that value to the Florida Department of Revenue as Florida use tax. In reality, consumers rarely follow this process. This lost Florida sales tax revenue is estimated to cost the state of Florida $700 million annually and that figure continues to grow.

The impetus for this change comes from the 2018 South Dakota v. Wayfair ruling which overturned the prior standard that a company needed to have a physical presence in a state for that state to collect and remit taxes. With Florida’s current general tax rate at 6%, this change would mean the competitive advantage of online companies would be stripped in comparison to the local retailers in the state. Sen. Gruters supports his decision to file the bill stating that “…this bill is about fairness; this is about collecting tax that’s already owed” insinuating that these online retailers should have been collecting Florida sales tax all along.

In addition to implementation of Florida sales tax for online retailers, according to floridapolitics.com, the bill would also:

  • Reduce the state sales tax on real estate property rentals, to 4.2%, from 5.7 %;
  • Exempt construction equipment from tangible property taxes;
  • Provide tax credits for health care companies and doctors for telehealth services;
  • And create a 14-day sales tax holiday for hurricane supplies, June 1-14.
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