We’re all guilty (yes, even me) of not paying a little-known tax called a “use” tax on most items that we purchase online from out of state. This tax has been on the books for years. We’re responsible for paying it by completing a form and submitting payment to the state – like that is going to happen.
Florida has been hesitant to do anything about this and collect the sales tax because some consider it a new tax. Yet, that isn’t true. This isn’t a new tax!
Our brick-and-mortar, small businesses brought this to our attention several years ago since they saw that they were at an economic disadvantage from out-of-state retailers. They have to collect the 6% sales tax and remit to the state when people shop at their stores. Not to mention, they have other expenses that out-of-state retailers don’t have, such as employee taxes and real estate taxes. They couldn’t be competitive.
To assist them, we reached out U.S. Congressman Daniel Webster, former Florida House member and senator, to see what the roadblocks were to force out-of-state retailers to collect and remit this tax to Florida. We learned that this was a national issue, finally resolved by a U.S. Supreme Court ruling in 2018 that allowed the states to collect the tax even for businesses that do not have a physical presence in the state of Florida.
Just prior to that, Amazon built distribution centers in Florida and began collecting and remitting sales tax. Since then, our chamber and many others, along with the Florida Chamber of Commerce, have been working on this issue – known as Main Street Fairness – on the legislation currently underway in Tallahassee.
If this legislation is passed in the session, it’s estimated that the state of Florida could collect at least $600 million a year in revenue. These monies certainly would go a long way in filling a nearly $2.7 billion deficit in the state of Florida’s budget, which funds schools, infrastructure and, in part, our towns and cities.
In a state that doesn’t collect an income tax, this tax is much needed. We never seem to question the sales tax that we pay when we go to a store. We need to build awareness that this is a tax that should have been collected over the years but hasn’t because of government bureaucracy and legal loopholes.
At this time, legislators seem willing to pass this legislation by using the revenue to help businesses with their increased unemployment tax burden brought on by the pandemic. Amendments may continue to be made, yet awareness of this revenue source is key to our state’s future and leveling the playing field for small businesses.