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Cyber Monday Sales Tax

By: Whitney Ray Email
By: Whitney Ray Email

Tallahassee, FL - It was quiet in Susan Frisbee’s gift shop Monday. The only noise was from Susan’s workshop where she was grinding glass, but throughout the state.

Shoppers searched for deals and clicked on bargains during the busiest online shopping day of the year. It’s hard for Susan’s glass shop to compete when millions of people are shopping from home and work.

“When you buy locally you are supporting your local small businesses and large businesses. The sales tax stays in town. The money stays in town,” said Susan.

The playing field isn’t level. Susan charges a six cent state sales tax and local taxes. Online store without locations in Florida don’t collect sales tax. It will cost the state an estimated 10 million dollars by the end of Cyber Monday. Florida TaxWatch says between two and four billion dollars goes uncollected every year.

“Under the current law people owe the sales tax even on purchases they make over the internet. It’s a matter of collection. Most retailers don’t collect that and remit it to the state,” said Robert Weissert with Florida TaxWatch.

Most shoppers don’t even know they owe the tax. To follow the law online shoppers have to visit the Department of Revenue’s website, print a tax form, list the items purchased, do the math, and mail in a check. And you got to do it four times a year. The form to fill out to pay taxes on online purchases is the DR 15 MO. You can download the form at dor.myflorida.com/dor/forms/2010/dr15mo.pdf

Some State lawmakers want to make paying the tax easier, but for now Florida retailers like Susan will have to compete with online stores charging six percent less.

CYBER SALES HAS LAWMAKER SEEING RED

By JOHN KENNEDY
THE NEWS SERVICE OF FLORIDA

THE CAPITAL, TALLAHASSEE, Nov. 29, 2010…With Florida facing a $2.5 billion budget gap, rising Internet sales over the Thanksgiving holiday renewed calls Monday for the state to join others looking to make it easier to collect sales taxes from out-of-state and mail-order merchants.

Retail sales reached $45 billion nationally over Thanksgiving weekend, a $4 billion boost over 2009 levels. But equally remarkable, analysts said, was that the proportion of online sales rose to one-third of the holiday total, the highest ever, according to the National Retail Federation.

Monday -- promoted as CyberMonday -- the past five years by the Retail Federation, was expected to drive another round of heavy online sales.

But with many of these transactions not subject to state sales taxes, Rep. Michelle Rehwinkel Vasilinda, D-Tallahassee, said Monday the trend bolstered her push for Florida to join the Streamlined Sales and Use Tax Agreement, which currently includes 24 states pushing to collect tax on remote sales.

Rehwinkel Vasilinda said the state would likely lose about $10 million in uncollected sales tax Monday, alone.

“Ten million dollars would hire at least 300 new teachers, help our universities remain competitive, create incentives for bringing jobs to Florida, or for much needed social services still reeling from an almost 12 percent unemployment rate,” she said.

Online retailers that also have brick-and-mortar stores, such as Wal-Mart and Best Buy, are required to collect Florida’s 6 percent state sales-tax online. But Rehwinkel Vasilinda, who is backed by Florida TaxWatch and the Florida Retail Federation, say a huge number of purchases also come from such online-only retailers as Amazon and eBay, who are not required to collect.

“We’ve certainly got a lot of needs in this state and as we shift more to e-commerce, our tax structure should, too,” said Robert Weissert, a Florida TaxWatch spokesman. “Internet sales give a competitive advantage to some companies over other stores and businesses that do the bulk of hiring in this state. That’s something we should keep in mind, too, when we have more than 1 million people unemployed.”

States began working on the sales tax agreement in response to a 1992 U.S. Supreme Court ruling that Internet sellers, mail-order merchants and other “remote” sellers cannot be required to collect sales tax from out-of-state customers unless they have a physical presence in the customer’s state. The court held that sales tax systems across the country were too complicated for a merchant to know what tax to charge, otherwise. The multi-state compact provides a uniform set of rules to streamline collection and more than 1,000 retailers have begun remitting tax to participating states.

More important, though, supporters say increasing the number of states involved would nudge Congress toward clearing the way for Internet taxation.

Rehwinkel Vasilinda and Sens. Evelyn Lynn, R-Ormond Beach, and Nancy Detert, R-Venice, have proposed sales-tax legislation in recent years – but the measures have drawn little traction in a Legislature where many see the step as a tax increase. Rehwinkel Vasilinda said she will sponsor a bill again this year, although House Speaker Dean Cannon, R-Winter Park, and Senate President Mike Haridopolos, R-Merritt Island, have shown no interest.

“Florida has many needs and letting revenue already owed to the state slip through our fingers is simply not good business,” she said.


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