Florida Senate approves online sales tax bill

Published: March 28, 2021 7:15 AM EDT

Paying an online sales tax in Florida is one step closer to reality.

The state Senate approved a proposal (SB-50) that would require out-of-state online retailers to collect sales taxes, with the money slated to be used to help Florida business owners avoid increases in unemployment taxes.

It would add a 6% tax to online purchases, making out-of-state retailers responsible for giving that money back to the State of Florida. This is already something Floridians are supposed to pay, but most people either don’t know about it or don’t pay it because it isn’t strongly enforced.

Florida economists estimate this tax would bring in around $1 billion each year if it passes. The money would replenish the Unemployment Compensation Trust Fund, which took a hit during the pandemic.

It could be an incentive for employers to hire more people, one economist said.

The tax could also be a new revenue stream to partially – or completely – replace the taxes that employers pay for the Unemployment Compensation Trust Fund.

Victor Claar, Ph.D., an associate professor of economics at Florida Gulf Coast University, said just like people who live in Florida, it could be hard to get other states to pay up.

“When you pursue a particular action it’s really hard to know what the short term and long term consequences will be, and it’s hard to know what those are for the people that you think will be affected and for other people that you may not have even considered might be affected,” he said.

At the Florida Chamber of Commerce, they believe the bill would work and get more people back in the workforce.

“The main benefit is that businesses aren’t going to have this big tax increase that they otherwise would have had. And so that’s going to allow them to rehire employees or get more employees hired, so we think that’s a win-win for all Floridians,” said Carolyn Johnson, the director of business, economic development and innovation policy at the Florida Chamber.

It isn’t a win-win for State Rep. Anthony Sabatini, R-Howey in the Hills, who believes the bill is a short-term fix to a long-term problem.

“The amount of money that we pull in is only going to be used over the next couple of years to pay down the Florida Unemployment Compensation Fund. So, it is a temporary tax cut attached to a permanent tax increase,” he said.

Some other representatives feel this would be a tax loophole, allowing the state to properly collect taxes that they aren’t now.