Wayfair: Formulating A Florida Response
The non-collection of sales taxes on sales to Florida customers by remote (out-of-state) sellers has been the most significant tax compliance and collection issue facing Florida and other states for many years. Remote vendors sell products by the internet, telephone, and mail. Historically, the courts have held that when a remote seller makes a sale to a person in a state in which the seller does not have a physical presence, that state cannot require the seller to collect the sales tax due and remit it to the state. That changed with the U.S. Supreme Court’s Wayfair decision last June. But Florida still needs to take steps to address this problem.
When remote sellers do not collect the tax, the tax is still legally owed to the state by the Floridian that made the purchase; however, few Florida residents know that they are required to pay the sales tax (known as the use tax when not collected at purchase) owed on remotely conducted transactions directly to the Florida Department of Revenue (DOR). Even fewer actually make such payments by going to the trouble of downloading DOR’s Form DR-15MO, filling it out and sending a check for the taxes they didn’t pay at the time of purchase.
Not collecting sales taxes on remote sales not only costs Florida governments millions in legally owed revenue, it also puts Florida retailers and a competitive disadvantage, distorts purchasing decisions, is unfair to Floridians that do pay the tax, and makes millions of Floridians—often unwittingly— lawbreakers.
Florida TaxWatch has researched this issue for more than 15 years, producing numerous reports and offerings recommendations. But the courts’ physical presence requirement has always been a major obstacle. But now that obstacle is gone as a result of the US Supreme Court’s Wayfair decision, and it is time for the Legislature to fix this. Senate Bill 1112 can achieve this long-elusive goal.