Legislation to enforce taxes on online sales officially awaits Gov. Ron DeSantis‘ signature.
The Governor’s Office issued a notice Monday that the bill (SB 50) has been presented to the Governor. He has a week, until April 19, to act on the measure.
Lawmakers passed the bill on Thursday, finalizing Republican legislative leadership’s plan to require online retailers to collect sales tax. An estimated $1 billion in revenue would come from the new enforcement of sales taxes technically already owed on purchases Floridians make from out-of-state sellers, but which few Floridians pay.
The Legislature’s e-fairness proposal is the second bill sent to DeSantis’ desk this year.
Last month, he signed COVID-19 liability protections for businesses and health care providers into law. That measure was one of the Governor’s stated priorities, and he waited only one business day to sign it during a ceremony with a band and all.
Unlike the liability protections, DeSantis has not talked openly about supporting the e-fairness plan, made possible by a 2018 U.S. Supreme Court ruling. Since that decision, 43 of 45 states charging an online sales tax required its collection by e-commerce companies.
DeSantis’ budget recommendations for the 2021-22 fiscal year did not include e-fairness legislation. When asked in January about fully implementing the online sales tax, the Governor told reporters, “There’s no tax increases in our budget. We’re not going to do that.”
But lawmakers have sweetened the pot since then.
As the bill was written in January, the additional revenue would have gone into general revenue, but the plan is now “revenue neutral.” Republican legislative leadership’s latest deal includes using the additional revenue to replenish the Unemployment Compensation Trust Fund to prevent a tax hike on businesses. And a measure added in an amendment approved Thursday would use the additional revenue to lower commercial rent taxes once the unemployment trust fund is refilled.
“This basically makes the bill revenue neutral forever,” said bill sponsor Sen. Joe Gruters.
Supporters also contend the bill is not a tax increase since people technically owe the state the money already. Consumers are currently supposed to send sales taxes directly to the Department of Financial Services in a separate check. Under the new plan, out-of-state sellers would begin collecting those taxes for consumers, as in a conventional purchase.
Proponents for e-fairness legislation, including the bill’s House sponsors, Reps. Chuck Clemons and Chip LaMarca, argue it will level the playing field for local and brick-and-mortar businesses.
The Florida Chamber of Commerce lauded the measure, as did Florida TaxWatch.
Democrats support the underlying e-fairness legislation, but opposed directing those funds to help businesses, arguing it would lower taxes on businesses on the backs of consumers. They instead supported using the revenue to increase unemployment benefits.
Still, some critics on the left and right, including House Democratic Co-Leader Evan Jenne and Republican Rep. Anthony Sabatini, consider the collection a de facto tax hike.
Ultimately the bill passed the House 93-24, with opposition from 22 Democrats and two republicans, and the Senate 27-12, with the only opposition coming from Democrats.
If the legislation becomes law, it will take effect in July.