Many Florida lawmakers want internet sales tax but some want to divert revenue to tax cuts listen12/29/11 Janelle Irwin
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With the 2012 legislative session just around the corner, state lawmakers are facing some tough decisions. One proposed law would close an internet sales tax loophole. Some politicians want to make sure the tax doesnâ€™t increase revenue for the state.
When a consumer makes a purchase online, the transaction appears to be tax free. What most consumers donâ€™t know, and what internet retailers rarely tell them, is that the consumer is supposed to calculate and pay the sales tax directly to the state. That law is often ignored and itâ€™s virtually unenforceable. State Representative Rick Kriseman has been vocal in the decade-long debate about closing that loophole. He said allowing internet retail giants like Amazon.com a 7-percent advantage over other stores robs Florida of revenue and jobs.
â€œIt gives out of state businesses that really have no contact with our state and our citizens donâ€™t benefit from their success. It gives them an unfair advantage over a brick and mortar business thatâ€™s here in our state, thatâ€™s employing people in our state and thatâ€™s paying taxes to our state.â€
Most Florida policy makers agree that taxes on internet sales need to be collected, but Kriseman said some consumers arenâ€™t looking forward to paying what they technically owe anyway.
â€œWhat it comes down to is theyâ€™ve enjoyed the fact that they havenâ€™t had to pay on a purchase what they would have otherwise been paying. So that means that theyâ€™re going to have to pay a little bit more and they donâ€™t want to do that.â€
Carla Jimenez is the owner of Tampaâ€™s Inkwood Books. She has been a local voice in a state and nationwide debate over internet sales tax. That means she hears from people who support her push to force internet retailers to collect state sales tax. But she also hears from those who donâ€™t.
â€œSaying things like, anybody who doesnâ€™t understand that the lowest price is the only thing that matters should just go out of business and if you canâ€™t compete, just close your doors. I mean, there are some people who I think are not understanding the whole picture when they say things like that. But there are people who hear the word tax and a red flag goes up and it just makes them angry and upset and hostile.â€
Jimenez said her store has taken a blow from the rising popularity of online shopping.
â€œOur little snap shot of our bookstore is such a small part of this story but itâ€™s repeated on Main Streets and on blocks all over the place and that is we used to be open longer hours, we used to employ more people and we certainly used to have more money coming from the door, thereâ€™s no question, and more physical traffic.â€
Estimates vary as to how much revenue the state is losing from online sales where the tax is not voluntarily remitted by the consumer. Florida Tax Watchâ€™s president and CEO Dominic Calabro guessed it might be around 50 million dollars; and he said that is a conservative estimate.
â€œWe would like to take that 50 million dollars and then use that collection of those funds to reduce other taxes that are keeping businesses from moving to Florida or encouraging them not to stay in Florida.â€
The plan heâ€™s referring to aligns with Governor Rick Scottâ€™s recent statement that he would sign legislation to close the loophole, but only if it is revenue neutral. That is, he doesnâ€™t want the state to net any money from collecting a tax on internet sales. Itâ€™s part of his promise to oppose any new tax. Calabro said he doesnâ€™t consider this a new tax, but agrees with the Governorâ€™s attempt to divert the money to other tax cuts.
â€œRemote sellers are stealing Florida jobs. Itâ€™s unilateral disarmament and we commend Governor Rick Scott for understanding that and asking that two good deeds be done. One, collect the taxes under the law and two, use those revenues to reduce another tax on businesses, another tax on capital, another tax that impairs economic growth and job creation in Florida. So, two good deeds make a double correction.â€
Some Democrats want to use the tax revenue to put a dent in Floridaâ€™s daunting deficit. But different versions of the legislation being batted around Tallahassee would instead divert the funds into corporate tax cuts, property or sales tax decreases or tax holidays. State Representative Rick Kriseman doesnâ€™t agree with the Governorâ€™s caveat to funnel internet sales tax revenue into new tax cuts.
â€œYeah, it is counter-productive. I was going to use a different word. My word probably would have sounded something more or rhymed with cupid. But I think thatâ€™s bad policy.â€
Proposed bills to close the internet sales tax loopholes will be considered during the upcoming legislative session that begins January 10.