Florida to Tax Remote and Marketplace Sellers

Florida Enacts Economic and Marketplace Nexus Rules

Last week, Florida Governor, Ron DeSantis, signed into law a bill that will require marketplace facilitators, such as Amazon, Target, or Walmart, to collect and remit sales and use tax from their purchasers. This bill will also require remote sellers to collect and remit tax if they had more than $100,000 in sales into Florida during the 2020 calendar year.

What does the new Florida sales tax law mean for businesses?

Companies that have reached the $100,000 threshold will be responsible for registering for sales tax by July 1, 2021.

This bill has gone through several committee meetings and edits, progressing through both the State House and Senate. Both parties added amendments, and the new policy is estimated to raise approximately $1.08 billion annually.

Specifically, the House added an amendment to eventually decrease the state’s business rent tax from 5.5% to 2% after the unemployment compensation trust fund is replenished. Additionally, the Senate added a measure to earmark revenue from the tax changes to fill the state’s unemployment compensation trust fund until the fund returns to pre-coronavirus pandemic levels.

In the past, similar measures in Florida continuously failed to gain traction. However, once lawmakers discussed the ultimate goal and message of the new legislation, the bill was successful. All-in-all, the objective was to equal the playing field between remote sellers and brick-and-mortar businesses in terms of sales tax since online sales have drastically increased over the last several years.

Before this, Florida and Missouri were the only states lacking sales tax requirements for remote sellers after the landmark South Dakota v. Wayfair case, which overturned the physical presence standard for sales and use taxes. Now, Missouri is the only state without legislation regarding the taxation of remote sellers, but it’s only a matter of time until they do!

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