Florida Senate considers taxing Internet sales

Florida lawmakers took the first step today toward joining the ongoing national battle to force online retailers to start collecting sales taxes.

Two Senate committees took up bills aimed at forcing online retailers such as Amazon.com to collect the state's 6 percent sales tax if the retailer has a warehouse or provides commissions to Florida residents who direct customers to the website.

Those backing the bills say they aren't trying to generate more money for the state but that they are supporting it to help merchants in Florida who are losing out to online retailers that don't collect sales taxes.

“It's an issue of fairness,” said Rick McAllister, president and CEO of the Florida Retail Federation told legislators. “It's not about the taxes collected. … We don't care what you do with the money, just don't get in the business of picking winners and losers in the marketplace.”

Floridians are supposed to pay taxes for online purchases, but there's no way to for the state to enforce the law unless the retailer has a physical presence in the state. Other states have tried to go after online retailers which have connections to in-state merchants, but those laws are being challenged in court.

The two bills have the backing of business groups in the state, but they could face an uphill battle.

Rep. Steve Precourt, R-Orlando and chairman of the House panel that deals with tax legislation, bluntly predicted this week that the House would not vote to raise taxes.

Sen. Evelyn Lynn, R-Ormond Beach, is trying to sidestep the criticism that it would raise taxes. She is pushing legislation (SB 7206) that includes a requirement that the state hold sales tax holidays to return to taxpayers an amount equal to what's collected from online sales. Studies have suggested as much as $800 million in local and state sales taxes are not being turned over.

Gov. Rick Scott has said he would be open to an online sales tax bill if it does not raise the overall tax burden on Floridians.

Sen. Nancy Detert, R-Sarasota, has a similar bill (SB 1514) but it does not include the requirement to return an equal amount back over to taxpayers. Detert says she is pushing the bill because Florida needs to adjust its tax system.

“We need a new way of doing things in the new millennium,” Detert said.

Detert's bill was approved by a majority of members of the Senate Commerce and Tourism Committee. But Sen. Anitere Flores, R-Miami, voted against the legislation saying it was a tax hike.

The push for the legislation comes at the same time that representatives of Amazon.com have asked legislative leaders for a two-year exemption from any sales taxes in exchange for a promise to build two distribution centers and bring as many 3,000 jobs to the state. Amazon has made similar deals in other states including South Carolina.

Amazon's representatives have stressed that they would not bring the jobs without the tax break, which is opposed by Florida retailers.

McAllister told lawmakers that the online retailer will eventually have to create distribution centers in Florida. He predicted that the future of Internet sales will require online retailers to be able to deliver products to customers within one day.

“It's a long way from Alabama to Miami,” he said. “They are going to come here.”