The TaxWatch Research Blog

The TaxWatch Research Blog is a forum where our research staff can address topics and issues in a short format. Keep an eye on this space during Legislative Session for frequent posts making sense of the activity at the Capitol. 

/ Categories: Research, Taxes, E-Fairness

About Remote Sales Tax Collection

The U.S. Supreme Court has issued a ruling that paves the way for a successful resolution to an issue Florida TaxWatch has fought for more than 15 years. The Court ruled that states can apply a reasonable requirement that remote vendors to collect sales taxes on sales to customers in their state—even if the vendor does not have a physical presence in that state.

It is important for Floridians to understand—this is not a new tax. Current law already requires this tax to be collected, but it is the responsibility of the consumer to send the appropriate amount to the state. Collecting this tax is simply following the rule of law. This ruling empowers Florida to collect a tax that is already on the books.

Not requiring remote sellers to collect sales tax not only erodes Florida’s tax base, but also creates an unfair advantage over brick-and-mortar retailers and retailers with both online and traditional stores.

Few Florida residents know that they are required to pay the sales tax owed on remotely conducted transactions directly to the Florida Department of Revenue, and even fewer actually make such payments. Evidence suggests that Florida is losing out on hundreds of millions of dollars each year from a lack of collection, which over the long term, could be used to reduce another tax already imposed on Floridians.

Due to a lack of state-specific e-commerce data, estimates of the sales tax revenue on remote sales that are not collected vary. A 2009 study estimates Florida’s sales tax losses from uncollected e-commerce sales at $803.8 million for FY2011-12. Another report in 2011 estimated tax revenue losses of $454 million in 2012.

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