Florida to lose $140 million on uncollected internet sales taxes over the holidays

TALLAHASSEE, Fla. – On Cyber Monday, the internet’s rival to Black Friday, and across the state, millions are shopping online, many of them tax-free.

But in 2020, state lawmakers will again tackle the issue of trying to collect a sales tax that is already owed.

In the state capital, one in every five commercial buildings is empty. While every vacant building has its own unique story, Scott Shalley, president of the Florida Retail Federation, said online sales are hurting local businesses in Tallahassee and everywhere else in Florida.

“Creates a pricing differential, and also puts the consumer in a bad spot. The consumer has a very complex situation in terms of paying the tax,” Shalley said.

In the state capital, one in every five commercial buildings is empty.
In the state capital, one in every five commercial buildings is empty. (Capitol News Service)

In 2018, the U.S. Supreme Court allowed states to start collecting sales taxes from out of state vendors with no physical presence in the state except for their online presence, but Florida is one of two states that have yet to start collecting. That will cost the state about $140 million, or about $4.5 million a day, this holiday season.

Legislation to allow the tax stalled last year after a newly elected Gov. Ron DeSantis worried it looked too much like a tax hike. A window into how the governor thinks was opened when he was asked about collecting corporate taxes already owed but not being paid.

“I just don’t want people to have tax increases. I think we are getting investment-driven to Florida, so let’s just hold people harmless,” DeSantis said.

Technically, Floridians are supposed to file a DR15-MO and pay the tax they owe to the Department of Revenue. Few do, and retailer Geof Weldon said he believes it puts him at a 6% disadvantage.

“Online is a huge competition. Online is a very big competition," Weldon said. “They have a lot more power to run a lot of deeper sales and stuff that I really can’t do.”

Not only does the nonpayment put brick and mortar stores at a 6% disadvantage, but it’s also costing the state an estimated $700 million annually.

The internet sales tax legislation has cleared one Senate committee, but it faces a tough road in the House, and perhaps even with the governor.