A taxpayer research group has called on Florida lawmakers to adopt remote seller legislation, saying the need to address the issue is urgent in light of plummeting revenue collections.
Florida TaxWatch President and CEO Dominic Calabro said a recent report from Florida’s Office of Economic and Demographic Research showing April revenue collections were $878 million below estimates has made it more pressing for lawmakers to pass "e-fairness" legislation.
Calabro in a May 26 release said the report “makes the economic toll of COVID-19 abundantly clear. With revenue collections for the month of April coming in at more than $878 million below estimates, our leaders must take action to remain accountable to the taxpayers of our state and set Florida on the right path forward.”
Florida and Missouri are the two remaining sales tax states that have not adopted rules for remote sellers through regulation or legislation.
Florida lawmakers this year considered legislation (S.B. 126) to impose a sales and use tax collection obligation on remote sellers and marketplace facilitators, but the bill died when the Legislature adjourned this year’s session early because of the COVID-19 outbreak.
S.B. 126 was sponsored with bipartisan support by Sen. Joe Gruters (R), vice chair of the Senate Finance and Tax Committee. The bill passed out of that committee on an 8–0 vote February 13 but died in the Senate Appropriations Committee.
This was the third year since the U.S. Supreme Court’s 2018 decision in South Dakota v. Wayfair Inc. that Gruters introduced economic nexus legislation.
Calabro told Tax Notes June 9 that the legislation has been held up because of the "misinformed view that this is a tax increase."
Calabro noted that TaxWatch has long supported e-fairness legislation and a gaming compact with the Seminole Tribe as important sources of revenue. “With the COVID-19 pandemic costing hundreds of millions in lost revenues, these changes are no longer just desirable, they are essential,” he said.
“We cannot afford continued inaction on these critical issues. Today, we again urge the Florida Legislature to take decisive action and activate these needed revenue sources, which will increase collections dramatically and help ensure a strong recovery for the Sunshine State,” Calabro added.
The organization has previously argued that lawmakers should adopt remote seller legislation, saying that revenue generated by imposing a collection obligation on remote sellers would allow lawmakers to reduce taxes like the business rent tax and the communications services tax.
“Not collecting taxes on remote sales costs Florida governments more than $700 million in legally owed revenue, places retailers at a competitive disadvantage, distorts purchasing decisions, is unfair to Floridians that do pay the tax, and makes millions of taxpayers — often unwittingly — lawbreakers,” the group said.
Lisa Kauffman, spokeswoman for Senate President Bill Galvano (R), told Tax Notes June 9 that although Galvano supports e-fairness legislation, he doesn't believe a special session is needed at this time to address the economic impact of the pandemic.
"With the information and data we have at this time, [Galvano] is comfortable that with Florida’s significant reserves, and the influx of federal funding made available in recent weeks, Florida has the fiscal resources needed to fully recover from the COVID-19 pandemic," Kauffman said. "In general, [he] objects to the premise that budget issues should be addressed by revenue enhancements."