New Bills Would Require Remote Sellers To Collect Florida Sales Tax

Late last year, Florida lawmakers introduced two new bills that, if passed, would require remote sellers and marketplace providers to collect sales tax from their in-state customers. Currently, Florida is one of only two states that has not yet implemented this type of system. In fact, the Florida Legislature considered and failed to pass similar legislation in both 2019 and 2020. Many believe, however, that the new bills have a much better chance of success in 2021, in light of the fact that over the last two years, the COVID-19 pandemic has led to a $3.2 billion revenue shortfall in Florida. To learn more about current sales tax law and how the passage of these new bills could affect your own tax responsibilities, please contact a Florida sales tax protest and appeals lawyer who is well-versed in both current law and potential changes.

Supreme Court Ruling

In 2018, in what is commonly referred to as the Wayfair ruling, the Supreme Court held that states could require remote sellers to collect sales tax from in-state purchasers, even if the sellers weren’t physically present in the state in question. However, the Court also ruled that any state laws imposing these kinds of responsibilities would need to:

• Contain a minimum sales threshold, which would help avoid the imposition of undue burdens on small companies;
• Prospectively impose sales tax collection duties on remote sellers; and
• Contain simplification clauses that would ease the burden of implementing these changes for qualifying sellers.

According to the court’s ruling, unless these three components are met, a state cannot require remote sellers to collect sales tax. Although Florida attempted to impose sales taxes on mail order sales in 1987, that law doesn’t satisfy the aforementioned test and so is not yet strictly enforceable.

Extending Tax Responsibilities

Senate Bill 50 and House Bill 15 attempt to modify Florida’s existing mail order sales law so that it imposes sales tax on remote sales, even if a seller isn’t physically present in the state. The bills also try to protect small businesses by excluding companies that make sales of less than $100,000, or that make less than 200 retail sales in Florida every year.

In addition to changing the responsibilities of remote sellers, the new laws would also extend sales tax collection duties to marketplace providers that facilitate and collect payment for transactions made by remote sellers. Certain types of online platforms would, however, be excluded from the marketplace requirements, including online travel companies, delivery network companies, and payment processor businesses that handle transactions for marketplace sales. If passed, these new laws could go into effect as early as this summer.

An Experienced Sales Tax Protest and Appeals Lawyer

While the prospects for the newly introduced sales tax-related legislation appear hopeful, the 2021 legislative process is still ongoing. For updates on how these changes could affect you, or for help with another sales tax-related issue, please reach out to dedicated Florida tax lawyer Ronald Cutler, P.A. at 386-490-9949 today.

Resource:

supremecourt.gov/opinions/17pdf/17-494_j4el.pdf