Dealing with Amazon

Editorial

Amazon.com is offering to build two distribution centers in Florida if it is allowed to skip collection of sales taxes for two years.

It's asking for outright favoritism, but Florida might as well take the deal. The state gets nothing now because the Seattle-based retailer has no physical presence here, and therefore is not required to collect sales taxes from Florida customers.

If you buy items out of state for use in Florida you are supposed to pay the state a use tax equal to the sales tax on in-state purchases, but there is no enforcement.

Online merchants aren't required to collect sales taxes for states where they have no stores or employees because, courts have correctly ruled, the states' taxes are so complicated that the task would be a burden.

Getting Amazon to put down some taxable roots would be a big improvement. In-state competitors are right that the arrangement would be unfair to them, but so is the status quo.

The promise of future tax equity for Amazon, and 2,500 jobs now, is better than nothing.

Florida Legislative leaders have been slowly warming up to the idea of joining other states in a program to simplify sales taxes and push Congress to authorize sales tax collections. But legislative leaders are promising that any revenue raised from online sales taxes would be offset elsewhere.

The revenue-neutral approach doesn't make sense, because it's not a new tax; it just hasn't been collected. For every no-tax item bought online, a similar taxed item is not being bought from a Florida store. But as in the Amazon deal, a first step toward equity is better than stagnation.

As for deals with retailers, Florida's proposal seems better that South Carolina's. There, the state gave Amazon a tax exemption until 2016 in return for building two warehouses. Until then, Amazon informs S.C. customers of the tax but doesn't collect it.

It's an unfortunate setup. A member of our staff was drawn into South Carolina's experiment in voluntary compliance after shipping a gift to relatives there. Amazon sent us a message saying to contact the S.C. Department of Revenue to possibly pay a tax.

We called and were told that because the gift we ordered from Florida was going to be used in South Carolina, we did owe a tax. The instructions were to call up the Internet site sctax.org, find and download form UT-3W, print it out, fill in columns A, B, C, D and E, then lines 1, 2, 3 and 4 to figure the tax.

Next, fill out form UT-3, including Social Security number, county numerical code for where the gift was sent, name, address and signature, along with a check for the tax owed. The tax on our purchase of $36.83 came to $2.58, and we were instructed to "round up to the nearest dollar." The cost was $3, plus 45 cents for a stamp, and the whole process took 30 minutes.

What about if we have the next gift delivered to Florida and we mail it to South Carolina ourselves? Would we still owe the sales tax? A polite clerk said she didn't know. We don't blame her. Congress is responsible for this mess.

It should pass the Marketplace Fairness Act, introduced late last year and sponsored by seven Democrats and five Republicans. Under the law, an online retailer would be required to collect sales tax for any state that simplified its sales-tax system, as Florida is considering.

Voluntary systems just won't work. A story in the Charleston Post and Courier explaining that consumers will be required to figure out the S.C. tax and mail it in, with no penalty if they don't, evoked this insightful comment from a reader: "Let me get out my checkbook. Not."

Amazon says it supports a nationwide system. Some other online merchants dislike it, but that's because they want to keep an unfair tax advantage.

Florida's deal with Amazon would move the state two years closer to a sensible, equitable process.

Once a simple, inexpensive method is set up to handle tax collections across the country, none of the objections will hold water. It is the person buying the product who owes the tax, not the seller, wherever that seller may be. But if the seller doesn't collect, no one can.