Facing $3 billion shortfall lawmakers look to close online sales tax loophole

ORLANDO, Fla. — Only Missouri and Florida do not collect sales tax from online orders from out of state, but that could be changing, at least for Florida.

“Our local businesses are bound to collect this tax, but if you’re on the Internet you are not. It’s the honor system,” says Florida Senate President Wilton Simpson.

“I think it’s unfair to disadvantage our small businesses in the way that we are by not collecting that tax,” he said.

Right now in Florida, retailers without a physical presence in the state do not need to collect sales tax.

READ: 2 women in their 20s dressed as ‘grannies’ denied second COVID-19 vaccine at Orange County Convention Center

Instead, consumers are supposed to remit the tax to the state; however, less than 3% of residents do this.

“We have become a donor state because we pay taxes in other states but we don’t pay them here,” says Sen. Janet Cruz.

On Thursday, Senate Bill 50 passed its first committee to close this loophole and require online sellers to pay the tax to the state.

READ: Walmart to boost pay for 425K employees after posting strong holiday sales

“It’s over $900 million to the general revenue, and the local added in, it’s another $300 billion, so we’re looking at almost $1.3 billion in additional revenue,” said Sen. Joe Gruters, the bill’s sponsor.

Facing a $2.75 billion budget shortfall, Florida has been looking for ways to raise additional revenue.

However, due to a recently passed constitutional amendment, it will take a two-thirds majority vote of the legislature to raise taxes, which is why lawmakers are looking at internet sales tax. As an existing tax, it does not technically meet the definition of a new tax.

READ: Florida Legislature looks to change alcohol delivery rules

The measure, which has broad bipartisan support, is also seen as a way to level the playing field for Florida retailers who have already been paying the tax while out-of-state retailers were able to avoid it.

“I believe this is smart governance and I believe that this is needed right now in Florida, considering the budget crunch is that local governments will see the budget crunch that we will see within our state,” said Sen. Shevrin Jones.

Click here to download the free WFTV news and weather apps, and click here to watch the latest news on your Smart TV.