Loophole lets online retailers avoid sales tax

Florida retailers rely on trusted customers to battle online retail giants


TALLAHASSEE, Fla. – Every year, the State of Florida fails to collect more than $500 million due from online sales. A boom in shopping at your finger tips may equal big problems for Florida's future.

Florida retailers are relying on trusted customers to battle online retail giants who are not collecting sales tax.

"A lot of times people will come in and say, 'Well, they would rather buy it in person and see and touch and feel it,' rather than get it online," said local retailer Katelin Haggerty.

A loophole in Florida law allows retailers like Amazon to not collect sales tax -- costing Florida at least a half a billion dollars a year. Instead, Floridians are required to fill out a form to pay sales taxes not collected.

John Fleming with the Florida Retail Federation said with more people shopping online, there is less revenue to support schools and other services.

"I think where we have the issue are the pure e-commerce retailers," said Fleming. "The ones who are not operating stores, the ones who are not investing in the state of Florida, the ones right now who are not hiring people in the state of Florida."

This year, brick and mortar sales have increased by 4 percent over 2012, but some areas of online are exploding. Not collecting the tax shifts the burden for services to other forms of taxation.

"We can see now that those little problems of not collecting the sales tax are becoming big problems as e-commerce explodes in Florida," said Fleming.

Between November and December, it's estimated Floridians spent upwards of $60 billion. Nearly 10 percent of that shopping was done online.

"I think some retailers were caught by surprise by just how much e-commerce has grown this year," said Fleming.

It's estimated only 4,000 sales tax forms are filled out annually.

Retailers are waiting for final numbers this holiday season, but said they are confident numbers will be higher compared to last year's holiday shopping season.