Bipartisan Bill Would Tax Online Sellers; Cut Manufacturing, Communications Taxes

Feb 5, 2013

A bill that would let Florida collect sales tax from online retailers cleared a hurdle in the Senate on Tuesday. The change could bring in hundreds of millions of revenue dollars, but the cash influx would be offset by new tax breaks.

The bill is being called the Detert-Margolis Tax Reform Act, named for co-sponsors, Republican Sen. Nancy Detert and Democratic Sen. Gwen Margolis. It passed the Commerce and Tourism Committee on Tuesday.

At the hearing, Detert said she thinks Florida is finally ready for an “e-fairness” bill. She’s long been pushing to collect sales tax from retailers who don’t have a physical storefront in the state.

“I think this is an idea whose idea has finally come after 12 years,” she said. “We didn’t work on it all that hard, early on, because we didn’t really need the money. Remember those days? But now we do.”

Collecting sales tax from online sellers is estimated to bring in between $50 million and $800 million a year. The bill would take an existing requirement for mail-order catalogue sellers to collect sales tax and extend that to Internet sellers as well. It would also require companies to collect the tax when they have representatives selling their product on a commission basis.

Co-sponsor Margolis said, it’s about fairness for brick-and-mortar retailers, who can’t compete with the Internet sellers, who don’t have to add taxes into their prices.

“The truth of the matter is, it just puts everybody on an equal footing. And besides that, I’m tired of seeing empty stores and shopping centers. The money is walking away from Florida,” she said.

But even with the added revenue it would bring, the bill also includes new tax breaks, which would leave the measure basically revenue-neutral. It would give a break for manufacturers who are buying equipment, which Gov. Rick Scott has been pushing. And it would give consumers a break on communications taxes.

The tax reform bill must pass several more stops before getting a vote on the floor of the Legislature.