TAMPA, Fla. - The Florida legislature is facing a $2.7-billion shortfall in the state budget. And they are considering plans to bring in more money by requiring sales tax on all online purchases
A landmark Supreme Court ruling in favor of the state of South Dakota may have set the stage for collecting more sales tax in Florida.
"We gave a strong voice for Main Street America," South Dakota’s attorney general, Marty Jackley, proclaimed after the ruling.
It all started with a dispute between the online company Wayfair and South Dakota’s government. Wayfair claimed it did not have to collect sales tax on customers from that state because it has no physical operations there.
Its argument was based on the premise that Wayfair does not answer to South Dakota and there is no tax on interstate commerce.
South Dakota took them to court. And in a 5-4 decision, the Supreme Court ruled Wayfair does have to collect tax from customers in that state if so ordered by the state
"This is not a new tax," Jackley continued. "This a tax already due with sales and use tax. All we simply are asking is to treat everybody fairly in the collection and remittance of that tax."
With the Supreme Court clearing the way, other state governments followed South Dakota’s lead, ordering online sales tax collections in their states as well.
Florida is among those considering it. Sarasota State Senator Joe Gruters sponsored the bill to require tax on all online purchases in the last legislative session.
That bill stalled. But after the pandemic cratered the state economy, the plan is getting traction in House and Senate leadership.
State leaders are facing a projected $2,7-billion shortfall.
"We need to make structural changes to the budget," warned Senate President Wilton Simpson.
Simpson suggested enforcing the online sales tax and House Speaker Chris Sprowls said he’s open to consider it. They’re looking for ways to bring in more money without raising taxes, and this would not technically be a new tax because it’s already on the books.
Consumers are supposed to pay sales tax on stuff they buy online -- whether the site collects it or not when they click the checkout button.
As it is, if tax is not collected, the burden falls on consumers to figure out what six percent of their sale is, then figure out how to send that six percent to the state.
Most people don’t do that. It shortchanges the state and leaves many shoppers to unintentionally evade the law.
State forecasts show collected sales tax on all online purchases could bring in more than $320-million next year. And that forecast was before the pandemic that drove a bonanza in online shopping.
If people maintain those shopping habits, the state could raise much more.