FL: State Internet taxes are ‘first step’ toward national online sales tax

By Yaël Ossowski | Florida Watchdog

CLEARWATER — The world’s freest marketplace is set to become the next playground for Florida’s tax collectors.

Come 2013, the Sunshine State could find itself with an Internet sales tax, thanks to a bill put forward by state Sen. Gwen Margolis, D-Miami, on Monday.

Margolis did not return calls to Florida Watchdog, but she told Jacksonville News 4 that the idea of the tax rests on imposing fairness for Florida’s businesses.

“The state of Florida is losing jobs and money because people have been shopping online all year,” said Margolis. “Our whole revenue source is sales tax in the state of Florida.”

The bill aims to modify the state’s Sales and Use Tax, which requires residents to declare and pay sales taxes on goods purchased or delivered from out of state.

“Florida has always had the use tax, but it’s never had anything to do with the Internet,” said Steve DelBianco, executive director of NetChoice Coalition, a coalition of Internet businesses and trade associations organized to “promote commerce on the net,” according to its website.

His group has been repelling similar laws across the nation, arguing that additional sales taxes will only hurt consumers in the end.

“Truth is, shoppers go online for superior selection, lower prices, and greater convenience — not to avoid paying sales taxes,” he recently wrote on the NetChoice website.

He hasn’t yet made a determination about the impact of Florida’s proposed law.

Across the state, groups have organized to press the initiative in order to level the playing field in retail sales.

Florida Retail Association CEO Rick McAllister told the lawmakers that online taxes were needed because “it’s an issue of fairness,” not revenue, citing the need to help prop up local retailers.

“Traditional retailers see the Internet as taking their sales away,” said e-commerce expert Vicente Pimienta.

He helps businesses set up their profiles and sales systems online to attract new customers.

“There is a war between the brick-and-mortar stores and the e-commerce people,” Pimienta said. “It’s about the disadvantage, and the retailers are ready to pressure the government to do whatever possible to beat them.

“All this really points to the first step toward a single tax for the nation.”

In an editorial last year, the Tampa Bay Times called on the Legislature to end the “giant loophole” allotted to Internet companies, calling customers of top retailer Amazon.com an “army of corporate spies” for comparing prices with other retail stores and sharing them online.

Former Florida Gov. Jeb Bush joined the debate last year in a letter to Gov. Rick Scott, iterating his support for taxing Internet sales at the state level.

“It seems to me there has to be a way to tax sales done online in the same way that sales are taxed in brick and mortar establishments,” he wrote to Scott . “My guess is that there would be hundreds of millions of dollars that then could be used to reduce taxes to fulfill campaign promises.”

And while Florida legislators ponder the Internet sales tax for local residents, the federal government is ready to enact the same nationwide.

Lawmakers on Capitol Hill have begun considering the Marketplace Fairness Act, introduced by Sen. Mike Enzi, R-Wyo., last year, which would set new rules on how Internet companies are expected to collect sales taxes at the state at federal level.

Reports also indicate that a similar version of the bill was inserted into an amendment to the National Defense Authorization Act.