The cost of buying items on Amazon could rise if the Florida Legislature
passes a bill that would require out-of-state online retailers to collect
sales tax.
For more than a decade, Florida retail leaders have tried unsuccessfully
to level the playing field for brick-and-mortar retailers who struggle to
compete on price. As this year's Legislative session opens Tuesday, they
believe they have more support.
"There really hasn't been a year when we've had all the entities saying
the same thing," said John Fleming, a spokesman for the Florida Retail
Federation. "There's a recognition that it's time to do something."
The stakes have never been higher, as more people look to the Internet to
make purchases and comparison shop. Online sales grew 15 percent nationwide
last year compared with less than 5 percent for traditional retail sales.
Amazon, the largest retailer of online goods, finished 2012 with $61 billion
in sales, compared with $5.3 billion a decade ago.
Economists estimate Florida loses $454 million a year in sales tax
revenue on goods bought from Internet-only vendors -- a number some say could
be considerably lower or as high as $1.5 billion. Overall, the state collected
more than $17 billion in sales tax during fiscal year 2011-2012.
The state requires retailers that are physically located in Florida, such
as Best Buy and Target, to collect sales tax, even if the item is purchased
online. Stores without a brick-and-mortar presence don't have to pay the tax,
resulting in a 7 percent savings to customers in Hillsborough, Pinellas and
Pasco counties, 6.5 percent in Hernando and 6 percent in Citrus. Florida
residents, for instance, don't pay sales tax on many purchases from
Seattle-based Amazon.
"There is a basic fairness issue here," said Jerry Custin, president and
CEO of the Upper Tampa Bay Chamber of Commerce, based in Oldsmar. "It puts the
retail guy in your community at a disadvantage. In addition to what they
already do to have a brick-and-mortar business, they also have to pay sales
tax."
While lawmakers appear united on the fairness issue, there's less
agreement on how the additional revenue would be spent. The legislation
(Senate Bill 316 and House Bill 497) includes a revenue-neutral provision that
would mean no new tax money for state government. Rather than count the
revenue as money for education, health care, roads and other basic needs, the
Department of Revenue would track the amount collected from out-of-state
online retailers and return the amount to taxpayers.
The bill, which if passed would take effect July 1, stipulates the money
would be used to reduce taxes, including giving breaks to manufacturers buying
equipment. Florida, which has no personal income tax, relies on sales tax for
more than 70 percent of its annual revenue.
Some supporters of the legislation have said the revenue debate, while
important, is secondary to resolving the equity issue and collecting what is
owed to the state. Florida law requires residents to pay sales tax on
purchases made over the Internet, but few do, and there's no enforcement. Many
people aren't even aware of the rule.
Last year, a Florida Senate committee approved a similar e-commerce bill,
but it died in the House. Republican lawmakers committed to not raising taxes
