Pandemic Provides Push For Gruters' Online Tax Bill

Todays News


State Sen. Joe Gruters, R-Sarasota, pushed for years for the state to begin charging sales tax at point of sale for online purchases.  But following a year where Florida’s economy - and the state’s tax revenue coffers – took a hit because of the COVID-19 pandemic, there may be a greater appetite than ever for the change.

The Florida Senate’s Commerce and Tourism Committee this week unanimously passed Gruters “e-fairness” bill, which now heads to the Finance and Tax Committee. The senator noted to colleagues that Florida is one of two states, along with Missouri, that charges a sales tax but does not assess it at the time of an online order.

“This is not a new tax,” Gruters stressed. “As a practicing CPA and a conservative, I am not in favor of any new taxes.”

In fact, while most consumers likely don’t realize it, sales tax on goods purchased online should be paid annually to the state. But that requires downloading forms from the state Department of Revenue and sending in the cash, something most individuals won’t do absent an audit. As a result, state estimators believe only about 2% of sales tax owed from mail-order transactions actually gets paid each year.

While there’s no estimates of how much revenue this legislation could generate if passed this year, revenue estimators last year figured a similar bill filed by Gruters would produce $620 million in new revenue, including $500 million for state government and some $120 million for local government agencies around Florida. Sarasota, for example, has a 1-cent sales tax that helps generate dollars for the School District.

A range of groups spoke in favor of the legislation, including the Florida Chamber of Commerce, which long championed such a change out of fairness to small businesses and retailers operating in brick-and-mortar locations. Some groups praised the effort but also suggested the state should try to close corporate loopholes to generate revenue at the same time or even ahead of making sure a regressive sales tax hit the poorest Florida consumers.

Gruters noted that for years, malls and Main Street shops struggled to attract consumers as more turned online for goods.

“It doesn’t take a genius to see it,” he said. “Go into stores and you see people taking pictures of a shoe, or in a gun store a picture of a gun, then they go outside with their phones and see if they can get it for $5 cheaper.”

That’s only been exacerbated by the pandemic, as more individuals began conducting most consumer purchases online either thanks to lockdowns orders, shop closures or concerns about exposure to the coronavirus.

“Online purchases have multiplied, and I don’t think they will ever go back,” he said. "It’s time to create some fairness and level the playing field for our local retailers.”

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