Florida bill not gaining momentum to tax online sales from out-of-state companies

In this Monday, Dec., 1, 2008, file photo, an Amazon.com employee grabs boxes off the conveyor belt to load in a truck at their Fernley, Nev., warehouse. Cyber Monday, coined in 2005 by a shopping trade group that noticed a spike in online sales on the Monday after Thanksgiving when people returned to their work computers, is the next in a line of days that stores are counting on to jumpstart the holiday shopping season. This year it is expected to be the biggest online shopping day of the year for the third year in a row. (AP Photo/Scott Sady)

AP

In this Monday, Dec., 1, 2008, file photo, an Amazon.com employee grabs boxes off the conveyor belt to load in a truck at their Fernley, Nev., warehouse. Cyber Monday, coined in 2005 by a shopping trade group that noticed a spike in online sales on the Monday after Thanksgiving when people returned to their work computers, is the next in a line of days that stores are counting on to jumpstart the holiday shopping season. This year it is expected to be the biggest online shopping day of the year for the third year in a row. (AP Photo/Scott Sady)

— 'Tis the season for online shopping, but in the frenzy to find the perfect gift Floridians could unwittingly be breaking the law.

A 2011 report found the state was unable to capture between $450 million and $454 million in sales tax revenue because of online sales. That sum has been on the rise, especially as online shopping has grown in popularity, said John Fleming, a spokesman for the Florida Retailers Federation.

"It's a huge issue for Florida retailers and has been for more than a decade," Fleming said recently.

The state requires retailers that are physically located in Florida — like Target or Walmart — to collect sales tax, even if the item is purchased online. But stores without a physical presence in the state skirt those rules because the state's Department of Revenue cannot require out-of-state retailers to collect sales tax.

That doesn't mean Floridians are off the hook. Instead, Fleming said, shoppers are supposed to voluntarily pay the state the taxes it is owed. And that, Fleming said, doesn't happen often.

"It's virtually an honor system," said Dominic M. Calabro, president and chief executive of Florida TaxWatch. "There's no one working to enforce it."

For there to be an enforceable system, the state would need to change the law to require online retailers to collect. Calabro said his organization would support a move to a streamlined sales tax plan, in which 33 states nationwide already participate.

Research shows the state would be able to collect between $50 million and $60 million a year under a streamlined sales tax plan, Calabro said. And while that's far less than the estimated total not collected, Calabro said it could help push federal legislation that would require sales tax collection from remote buyers.

Dominic M. Calabro, President and CEO of Florida Taxwatch on NewsMakers 7-22-12.

Dominic M. Calabro, President and CEO of Florida Taxwatch on NewsMakers 7-22-12.

"The state of Florida has to act," he said. "The lack of action shows ... the state doesn't care. But it requires action on both fronts."

That action could be on the horizon. State Sen. Gwen Margolis, D-Miami, proposed legislation that would allow the state to begin collecting sales tax from online shops.

This is the sixth year an Internet sales tax bill has been proposed. While supporters are hopeful this is the year it will pass, they aren't overly optimistic.

"The way legislation works is it is very easy to kill something, but hard to pass something," Calabro said.

Rep. Kathleen Passidomo, R-Naples, said she doesn't know whether this will be the year a sales tax bill passes the Legislature.

"There are so many pros and cons on the issue," she said. "But I haven't weighed in on it yet."

Senate President Don Gaetz told the Capitol News Service earlier this month he was against Margolis' bill, but that if it were to pass he'd like to see other taxes decreased to keep the amount of revenue collected the same.

Gaetz isn't alone in his opposition of the bill. Jackie Schutz, a spokeswoman for Republican Gov. Rick Scott of Naples said the governor doesn't support the move.

Florida Senator Don Gaetz on NewsMakers 9-4-11

Florida Senator Don Gaetz on NewsMakers 9-4-11

"Governor Scott does not support increasing the tax burden on Florida families," Schutz said in a statement to the Daily News.

Sean Snaith, director of the University of Florida's Institute for Economic Competitiveness, said the state isn't the only one at a disadvantage because of shoppers' desire to shop with their fingers.

"It's unfair to Florida retailers," he said. "Bricks and mortar, on-the-ground retailers have to collect sales tax. It puts them ... at a disadvantage."

Major retailers suffer from the trend to shop online, Snaith said. Shoppers often go in to stores to look for options, but eventually order the gift online.

Still, Snaith said, it will be difficult to regulate online sales.

"The Internet is sort of, in some ways, the Wild West," he said. "People are resistant to regulation and taxation of those actions."

© 2012 marconews.com. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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