S.B. 50, introduced last month by Sen. Joe Gruters, R-Sarasota, passed the Senate Commerce and Tourism Committee by an 11-0 vote. The bill would require remote sellers and marketplace facilitators such as Amazon.com to collect and remit tax if they have more than $100,000 in sales into the state during the 2020 calendar year.
If enacted, most of the bill would take effect July 1, 2021. The bill clarifies that marketplace providers wouldn't include travel agency services, certain delivery network companies or payment processing businesses.
The measure was supported at a public hearing from businesses including Amazon, Target and a Florida retailers group.
Gruters told the committee that while he considered himself a conservative and wasn't in favor of any new or additional taxes, he said the measure isn't a new tax. It is one that consumers already owe but usually don't remit. If they do try to remit it, it's a heavy paperwork burden, he said.
"This is not a new tax," Gruters said. "We're just changing the time and the collection of the tax. And at the end of the day, this is all about being fair, right? Being fair to our communities, being fair to our brick-and-mortar retail stores."
Asked how much the measure could raise, Gruters said no new estimates have been done this year but he cited previous estimates that it could raise $500 million for Florida and $120 million for localities.
Sunshine State lawmakers weighed similar proposals in the last few years before shelving them amid some concerns from Republicans who perceived the measure as imposing a tax increase.
Several left-leaning groups came out in opposition to the bill. The measure isn't paired with additional policies to reverse tax cuts on corporations, or add new taxes, and because of the regressive nature of sales and use taxes, they said.
Ida Eskamani, of the economic justice group Florida Rising, told the committee that she supported the bill because it would level the playing field for state brick-and-mortar businesses. But she said revenue from the measure should go back to the neediest Floridians.
Other measures should also be considered, such as combined reporting, requiring large pass-through entities to pay corporate income tax, enacting market-based sourcing and folding global intangible low-taxed income into state corporate tax income, she said.
"Our economy is fragile due to an unsustainable reliance on sales tax," she said.
Because Florida does not levy a personal income tax, the state relies heavily on sales taxes to balance its budget and has been hit hard by a downturn in tourism amid the novel coronavirus pandemic.
Florida and Missouri are the only states with a sales tax that haven't begun requiring remote sellers to collect and remit taxes after the U.S. Supreme Court's 2018 Wayfair decision, which did away with the physical presence standard for sales and use taxes. Florida is also one of three states that lack a tax requirement for marketplaces.
French Brown of Dean Mead Egerton Bloodworth Capouano & Bozarth PA, representing the Florida Chamber of Commerce, told the committee that the group supported the bill and noted its $100,000 threshold protection for small sellers.
While not testifying on the bill Monday, the measure won support from representatives of Associated Industries of Florida, Amazon, Target, the Florida Association of Counties, the Florida League of Cities and the International Council of Shopping Centers.
"This truly is just a collection issue," Brown said. "It's not a new tax. And the key is that it provides clarity to remote businesses outside the state of Florida."
Revenue estimates from prior online sales tax bills have said that a Wayfair-related tax could generate nearly $700 million in state and local tax revenue annually. A fiscal note on S.B. 50 wasn't immediately available.
Other states in Florida's region, such as South Carolina and neighboring Alabama, have thresholds of $100,000 and $250,000, respectively, without a transaction threshold.
The office of Republican Gov. Ron DeSantis didn't immediately respond to requests for comment on Monday. But when asked about a similar bill in January 2020, he said he "didn't want to tax anyone more" and emphasized that he supported low taxes.
Rep. Chip LaMarca, R-Lighthouse Point, a co-sponsor of a similar House bill, told Law360 he believed DeSantis will support the legislation.
"This is the year and the time to pass this legislation in the Florida House and Florida Senate and the leadership in both houses has already weighed in positively," LaMarca said.
Representatives for the Republican and Democratic leadership in the Senate and House didn't immediately respond to requests for comment on Monday.
--Additional reporting by Paul Williams. Editing by Neil Cohen.
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