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Collecting internet taxes in Florida has a new twist

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TALLAHASSEE, Fla. – The Florida Senate Finance and Tax Committee approved a bill Thursday requiring out-of-state retailers to collect sales tax on internet purchases.

Economists estimate it will bring in more than $1 billion a year, but a new twist being added means the extra cash won’t go toward solving the pandemic created budget shortfall.

Florida is one of only two states that don’t require out-of-state retailers to collect the sales tax due from online purchases.

“We’re down to Missouri and Florida,” said Grace Lovett with the Florida Retail Federation.

Instead, Floridians are supposed to fill out a form four times a year and pay what they owe.

A Senate committee was told that’s not happening.

“We only have about 3% compliance right now, and really what we are doing is putting consumers in a position where they are not following the law,” said Senate sponsor Joe Gruters.

Under the bill, most retailers selling more than $100,000 a year online will have to start collecting Florida’s 6% sales tax at the point of sale, starting July 1.

“We are voting here to force people (to pay) what they owe us, and that is it. This is not an increase,” said Sen. Janet Cruz.

But the governor has shaken things up.

He wants any added revenue from the collection of internet sales tax to be offset by tax cuts elsewhere.

The Governor didn’t include that money in his budget announcement last month.

“Well, look. If they want to do internet sales, what’s the revenue increase? Just reduce the overall sales tax and make it revenue neutral if they think that’s something that will help mom-and-pop stores. I just don’t want them to use that as a way to try and raise taxes on Floridians,” Gov. Ron DeSantis said.

The likely recipient is businesses who rent space, but Democrats on the committee questioned the logic of a tax break during a pandemic.

“We have a lot of social services that we’re talking about having to make cuts to,” said Sen. Lori Berman.

But without an offsetting tax break, the idea could die on the governor’s desk.

Florida is the only state that collects a sales tax on commercial rent payments.

Tenants currently pay 5.5%.