Florida Online Sales Tax Bill Could Force Consumers to Pay More

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Florida lawmakers are one step closer to passing a law that would force out-of-state retailers to collect sales tax on items Florida residents buy online from other states. 

What You Need To Know

  • Proposed bill could mean Florida consumers pay more for online purchases
  • The bill would force retailers to collect sales tax on items Florida residents buy online from other states
  • Florida could net hundreds of millions of dollars more in sales tax each year

One expert says that could mean some Florida consumers paying more for online purchases and some businesses paying less taxes.

The pandemic forced Lauren Zimmerman to drive more of the business at her Writer’s Block bookstore, online.

“We are working very hard to increase our web sales,” Zimmerman said.

She’s hoping a new proposed Florida law involving online sales tax won’t curb her business’s momentum.

“It’s so early to tell – there’s so many things about it I don’t understand,” Zimmerman said.

A 2018 U.S. Supreme Court ruling in South Dakota cleared the way for states across the country to force online retailers to collect their state sales tax on items their residents buy in other states.  Most states passed laws for that.  Florida did not. Online retailers are now on an honor system. 

But faced with a huge revenue shortfall because of the pandemic, Florida GOP lawmakers are now pushing a bill that would require those out-of-state online retailers to make Florida consumers pay the tax.  The measure recently passed a state senate committee.

Scott Peterson, Vice-President of U.S. Tax Policy for Avalara, says it will mostly affect frequent online shoppers.

“If you’re somebody who shops downtown all the time and never buys anything online, this legislation won’t affect you at all,” Peterson said. “If you’re somebody who only shops online – you never shop downtown – then this legislation is going to cost you more money.”

If passed, the bill means Florida could net hundreds of millions of dollars more in sales tax each year.  But facing criticism about what could be perceived as an added tax to consumers, Florida lawmakers are floating a provision to the bill that would reduce another tax businesses face.

“If we are going to truly start collecting more sales tax from the consumers in our state, we should do something with that money that helps them,” Peterson said.

Florida is the only state in the country that taxes businesses when they pay rent for commercial space.  Lawmakers are considering reducing that tax rate.

Zimmerman says every bit helps.

“It would be huge, would be huge, because when we start negotiating with the landlords we don’t factor in the sales tax,” Zimmerman said.

If passed, the bill would only affect online purchases from out of state from companies who don’t already have some sort of physical presence in Florida.  Those companies should already be collecting Florida sales tax from consumers.​

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