Ready to pay more? DeSantis signs online sales tax law
TALLAHASSEE, Florida. – Gov. Ron DeSantis signed into law a plan late Monday to force out-of-state online retailers to collect sales taxes on purchases made by Floridians, with revenue estimated at $1 billion a year set to cut a pair of Florida business taxes.
While the proposal (SB 50) was widely supported by Tallahassee business groups, DeSantis’ signing came with far less fanfare than when he appeared Monday morning in Polk County to sign the draft. controversial law HB 1 on the suppression of violent demonstrations.
During the Polk County appearance, DeSantis was flanked by Republican lawmakers and untrained law enforcement officers. But the signing of the online sales tax bill was announced by the governor’s office just before 11:30 p.m. in an email without comment. The bill was one of five measures DeSantis signed into law on Monday, including the protest bill.
DeSantis faced a deadline Monday to sign, veto or let the online tax bill become law without his signature.
Florida business groups have lobbied for years to require out-of-state retailers to collect and remit sales taxes, saying it’s a matter of fairness. But past proposals have failed due to Republican fears they could be seen as raising taxes on consumers.
Scott Shalley, president and CEO of the Florida Retail Federation, said in a statement that the law creates a “level playing field” for all businesses. Sales tax proceeds will be used to replenish a depleted unemployment trust fund, then used to reduce a tax on commercial rents.
“The business rent tax reduction is an added bonus,” Shalley said. “Through these cost savings, Florida businesses across all sectors of the economy can reinvest in their communities, create jobs and grow their businesses.”
Retailers who have a “physical presence” in Florida are already required to collect and remit sales taxes, but retailers without such a presence have not faced this requirement when making sales to Floridians, who were technically supposed to send sales tax on their purchases – although few did.
Proponents of the bill have argued that requiring collection is not an increase in taxes, and Florida retailers have been harmed by the fact that out-of-state businesses can sell products with taxes.
“We’ve created an unfair competitive advantage for foreign players and out-of-state retailers on the backs of our local retailers,” Senate patron Joe Gruters, R-Sarasota, said last month.
But Democrats argued that working Floridians would be impacted by the proposal because of “regressive” sales taxes. The final package was approved 27-12 by the Senate and 93-24 in the House.
“The governor just signed a bill to raise your taxes and give the $1 billion in new revenue to businesses,” Rep. Anna Eskamani, D-Orlando, tweeted after the bill was announced to be signed. .
The law comes into force on July 1.
Revenue generated from the tax is first directed to the unemployment trust fund, which has run out due to massive job losses during the COVID-19 pandemic. Companies pay taxes that go into the trust fund and, without another source of money, would have had to face higher taxes to replenish the fund.
Before the pandemic, companies paid $7 per employee in unemployment contributions. The rate rose to $49 this year and could have climbed to $87.
Once the fund is replenished, the proceeds will be used to dramatically reduce commercial rent tax, long the target of business lobby groups. Senate Speaker Wilton Simpson, R-Trilby, and House Speaker Chris Sprows, R-Palm Harbor, have agreed to cut the commercial rent tax from 5.5% to 2%.
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