First Approval For Internet Sales Tax 'Reform'

Feb 6, 2013

TALLAHASSEE -- An annual effort to collect taxes on Internet sales began again in the Legislature on Tuesday, with a Senate committee agreeing to offset any new money collected with other tax breaks in a bid to appease anti-tax lawmakers.

INTERNET KILLED THE COMPUTER STORE: Senators who voted for the Internet sales tax say it's a fairness issue for traditional retail.

The Senate Commerce and Tourism Committee approved a measure (SB 316) by committee chairwoman Sen. Nancy Detert, R-Venice, that would require Internet vendors who sell to Florida residents to pay state sales tax.

The bill would require Internet based companies, even if they don't have a physical presence in Florida, to pay sales tax when a product is sold to a person residing in Florida. Though estimates vary widely, Detert said the tax would generate about $400 million in additional sales tax revenue.

The bill was approved 10-1, but still needs approval from three other Senate committees before the floor. A similar House bill (HB 497) is yet to get a committee hearing.

The effort to collect Internet taxes has been cursed for years by the fear of a backlash from voters for voting to increase taxes – even though backers have long argued that the tax is supposed to be charged already, but simply isn't paid.

In an attempt to win over anti-tax lawmakers, the measure this year includes a $141 million sales tax cut for machinery and equipment used in manufacturing and another $150 million cut in the communication services tax, charged on certain phone and other telecommunications services.

"Rather than worry about whether this is a new tax, a tax reduction, or a tax increase, what this really is, is tax reform," Detert said.

Business groups queued up on Tuesday to add their support. Representatives from the Florida Chamber of Commerce and Associated Industries of Florida said the time has come to end Internet tax breaks that hurt storefronts and strip malls – now sometimes places that simply showcase items that are later purchased on the web.

"It puts everyone on an equal footing," said Sen. Gwen Margolis, D- Miami. "I'm tired of seeing empty shopping centers. The money is walking away from Florida."

"It has been a lingering problem and it has only gotten bigger and bigger," said Randy Miller, executive vice president of the Florida Retail Federation. "The face of retailing is changing. We recognize that people don't want to go to the mall anymore. They want to sit at their computer."

"This protects employees - employees who bring paychecks home to provide for their families," said Brewster Bevis, senior vice president for Associated Industries of Florida.

Noticeably absent from Tuesday meeting were representatives of and other Internet merchants that enjoy a competitive advantage.

Michael Peltier reports for The News Service of Florida.

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