A “New” E-Commerce Sales Tax for Floridians? Not really. However, beginning July 1st, out of state online retailers who sell more than $100,000 a year in online sales to Floridians, will now be required to collect sales tax from them. What does this mean for you as a Florida resident? As a consumer, when you purchase something online from an out of state retailer, you may not currently be charged sales tax by the seller, although you are required to declare and pay a quarterly use tax on Form DR-15MO “Out of State Purchase Return”. But what does this new law mean for the Florida business owner?
Part of this bill, which is expected to generate $1 billion in tax revenue for Florida, included an amendment that will first replenish the state’s unemployment insurance trust fund and then eventually reduce the taxes charged on commercial rent from 5.5% to 2%, a savings designed to support our business community. Florida is currently the only state to charge it’s businesses a tax on commercial rental property.
Much of the force behind this movement began nearly three years ago from the famous Wayfair decision. On June 21, 2018, The United States Supreme Court ruled 5-4 in South Dakota v. Wayfair that states can mandate that businesses without a physical presence in a state with more than 200 transactions or $100,000 in-state sales collect and remit sales taxes on transactions in the state.
As e-commerce continues to soar, particularly during the pandemic, the importance of securing revenue shortfalls is critical for a state like Florida, who's tax revenue is heavily dependent on sales tax, particularly from the tourism industry. This law can support Florida's recovery from the Covid-19 crisis while also providing relief for the state's business community.
If you have an e-commerce business and are wondering about your obligations and responsibilities related to sales taxes, here is a great resource to learn more.
If you have a physical business in Florida, here is more information on this new law.