Legislation would allow online retailers to collect sales tax

Legislation would allow online retailers to collect sales tax

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Legislation moving through the Florida Senate and the U.S. Senate could put an end to tax-free shopping online.  State Senate Bill 316 and a similar bill that could be approved this week in the U.S. Senate.  

Supporters say the bills would level the playing field for brick and mortar stores because everyone would pay the same sales taxes whether you buy things in a store or online. Opponents say the change would create a bureaucratic tax nightmare for Internet companies to comply with.

S.B. 316 would require Internet retailers to collect state and local sales taxes when Florida consumers buy online.  Sean Snaith is an economist at the University of Central Florida. He says state leaders recognize online sales keep climbing each year.

Snaith says, "We depend on sales tax revenue, and losing tens of millions of dollars every year because online sales are not, sales tax revenues are not being collected, gets to be a bigger and bigger problem."

Snaith points out Florida law already requires consumers to voluntarily pay sales taxes on some online purchases depending on where that Internet retailer is located.

He adds, "Here in Florida, you are supposed to pay the sales tax as a consumer, but not too many people are mailing checks to Tallahassee."

Requiring the retailer to collect the sales tax makes it more likely the state will actually get that revenue.

Snaith is looking toward the future as Internet sales continue to boom.  "This is going to be an important source of revenue for the government to finance everything from infrastructure to education."

Analysts say if the Florida bill passes, it would pump an extra $100 million a year into Florida's budget.  House leaders want to offset the extra money taken in by the Internet tax with the same number of tax cuts, to make it revenue neutral.

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