Applicable online sales tax bill moves forward in Florida House

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Floridians may soon have to pay up when they purchase goods online from out-of-state retailers.

Residents in the Sunshine State have long been spoiled ever since the transition to buying online became more mainstream. The perks of buying goods online are endless: avoiding waiting in line, not having to drive to the mall or fight for a parking spot in a busy parking lot, quicker checkout process, and no sales tax depending on who you buy from.

A day after revealing a plan to tax Floridians buying online goods from out-of-state retailers, the House moved forward with a proposal to require out-of-state retailers/vendors to collect sales taxes from Florida residents. 

HB 15 received overwhelming support from the House Ways & Means Committee and passed on a 16-2 vote.

Filed back in November 2020, the House bill was later joined by the Senate’s version, SB 50, just a few weeks after. 

Bill Implications 

If passed and voted into law later this year, HB 15 is expected to generate an additional $1 billion a year in taxes, which would be redirected to replenish Florida’s Unemployment Compensation Trust Fund. 

The proposal was created to cover the unemployment shortfall caused by the pandemic and would require Floridians to pay taxes on out-of-state retailer purchases. In other words, the luxury Floridians were once afforded by most online sales from retailers and vendors may soon be gone. The retailer will then charge a sales tax and have to remit taxes collected from the sale to the state of Florida, where the funds will then be redirected to help the unemployment situation within the state.

As it stands, retailers and vendors that have a physical presence in Florida must collect and remit sales taxes for items sold within the state. Conversely, Florida residents are supposed to report sales taxes not collected by out-of-state retailers via the “honor system,” so to speak, but hardly any of them do. This would cut the honor system and directly charge the tax to the consumer, placing the duty of sales tax remitting to the vendor. 

Support and Opposition

Bill sponsor Chuck Clemons, R-Newberry, believes that using the additional sales tax funds will allow the state to prevent unemployment tax hikes and avoid penalizing businesses. 

“All businesses, whether they laid people off or not, would pay per employee,” Clemons said. “What we are trying to do is to make sure those businesses are not penalized.”

Clemons cited Florida businesses are receiving large increases in unemployment taxes that are a direct result of the job market during the COVID-19 pandemic.  

One of the votes against the bill came from Rep. Anthony Sabatini, R-Howey-in-the-Hills, who believes the bill is “attached to a permanent tax increase.”

“In my opinion, we should be eliminating the entire unemployment tax,” added Sabatini. “Why are we punishing businesses for something they cannot control? Why, if somebody gets fired from a business, that business has to pay for their unemployment? Why isn’t that money from the general fund?”

Rep. Anna Eskamani, D-Orlando, also voted against the bill citing she would prefer the money collected be rerouted to increase the current $275 weekly state unemployment benefit to $375 or to provide the additional funds exclusively to businesses affected by the pandemic. 

“Our economy is very much guided in money transferring from one hand to the other,” Eskamani said. “So, if somebody can’t pay the rent, then the landlord is screwed. We just want to make sure that a person’s basic needs are met.”

The law would go into effect July 1, 2021, if passed along with SB 50, which is expected to get voted on this week. 

If you’d like to read the full bill, click here.

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