Florida leaves billions behind, and we all lose

TALLAHASSEE — It’s common sense. It’s a matter of fundamental fairness. Almost every other state does it.

But naturally, Florida does not. Go figure.

Year after year, Florida has refused to require that out-of-state retailers collect the 6 percent sales tax from online purchases. The tax is owed, but it goes uncollected. That makes potential scofflaws of everyone who buys a shirt online and avoids paying their share. If you buy that same shirt at a store, you pay sales tax on it and don’t even think about it.

This fiscal stupidity costs the state billions of dollars it is rightfully owed — money that could reduce child neglect, provide a tutor for prison inmates or put more state troopers on the highways.

The blame belongs to a Legislature lacking in vision, with too many members week-kneed and petrified about being accused of raising taxes in their next campaign. So they tremble in fear at any mention of the T-word. They avoid their responsibilities, and Florida consumers avoid paying taxes they owe.

Meanwhile, e-commerce keeps growing at a stunning pace. A share of Amazon stock was selling for $3,300 Friday. The pandemic has greatly accelerated this trend and turned too many Main Streets into hollowed-out shells.

But Main Street was at an economic disadvantage long before COVID-19, so don’t let legislators get away with claiming that they support Mom-and-Pop businesses. If they did, they would have demanded that online retailers collect this tax long ago. But they didn’t.

Almost every year, a version of the proposal fails, despite support from the business community, big-box retail giants such as Best Buy and Walmart, Florida TaxWatch, the Florida League of Cities and Florida Association of Counties.

To give you a sense of how long this short-sightedness has dragged on, it was in 2003 that Sen. Walter “Skip” Campbell, D-Coral Springs, filed a bill to “streamline” the sales tax. Campbell’s bill passed the Senate unanimously, and a legislative analysis stated the obvious 18 years ago: “The advent of e-commerce has caused a dramatic increase in remote sales.”

But a stubborn House refused. The speaker at the time was Johnnie Byrd, who had an aversion to any talk of taxes, and was mounting a campaign for U.S. Senate.

Byrd’s successors were no better, but this could be the year that the Legislature rights this wrong.

Lawmakers are facing huge budget shortfalls, and the pandemic has placed unforeseen financial burdens on schools, health care and other programs. Cutting services would be irresponsible with this obvious revenue source available.

Senate Appropriations Chairman Kelli Stargel, R-Lakeland, predicts passage this year, at long last.

“I don’t believe it’s a tax increase. I think it’s a tax collection issue,” she said. “It’s just a matter of collecting taxes that are already due our state.”

The unfairness of untaxed online sales is worse because Florida is much more dependent on sales tax revenue than most states due to its lack of a personal income tax. Florida needs this money desperately. Closing this loophole should be the start of an overhaul of a creaky and outdated state tax code.

How long has this issue been ignored? Campbell, who later was a popular mayor of Coral Springs, died in 2018. Former Senate President Gwen Margolis of Aventura, also a sponsor of online sales tax proposals, died last year. So did Randy Miller, a former state revenue chief who pushed for tax fairness as a lobbyist for the Florida Retail Federation, which has fought for tax fairness from the beginning.

Success is in sight. The House version’s low number, HB 15, is a signal that it’s a priority. The House sponsors include Reps. Chuck Clemons, R-Newberry, and Chip LaMarca, R-Lighthouse Point.

The Senate bill (SB 50) will be considered on Monday, Jan. 25, in the Senate Commerce & Tourism Committee. The sponsor is Sen. Joe Gruters, R-Sarasota, a tax accountant and chairman of the Republican Party of Florida, who’s in his third year of trying to get it passed. Last year’s version estimated that the state, cities and counties were losing $612 million a year.

“It makes no sense,” Gruters says. “I never understood it.”