Florida Online Sales Tax Bill
Florida Governor Ron DeSantis signed into law a plan requiring out-of-state online retailers to collect sales taxes on purchases made by Floridians. The new Florida Online Sales Tax Bill taxes online sales for Florida addresses. This new tax bill could possibly add about $1 billion every year to state revenues. Firstly, the tax collected from these sales will go towards the Florida Unemployment Compensation Trust Fund. Once there is a satisfactory increase in the Unemployment Compensation Trust Fund, then the tax collected will be shifted to the Florida General Fund.
Does Florida charge sales tax on online purchases?
Under the new Florida Online Sales Tax Bill, which takes effect on July 1, 2021, online sales in Florida will be taxed at 6% at the point of the sale. In other words, this law will require out-of-state retailers to collect taxes on orders set out for Florida addresses. Originally, Florida required purchasers to pay sales tax. Under the new law however, the burden shifts to the out-of-state retailers or online marketplaces to pay sale tax.
This law is mostly concerned with companies that independent sellers use to promote and sell their products, also known as “Market Providers.” Known companies of this type include Amazon Marketplace and eBay. However, this law exempts any business in Florida that sells less than $100,000 of products a year.
Out-of-state retailers will be considered “dealers” for tax purposes in Florida and thus, will be required to register with the Florida Department of Revenue, collect and remit taxes, and file returns. If a seller does not use a Market Provider but makes a great deal of remote sales into the Florida market, then the marketplace seller may become a “dealer” and thus they will be liable for the Florida sales tax.
A remote sale can be defined as a retail sale of a product ordered by means of communication from a person who receives the order outside of Florida and transports the product or causes the product to be transported from any location, including Florida, to a location in Florida.
What states require sales tax on online purchases?
Most states in America require a sales tax on online purchases. In fact, all but 5 states do not tax online purchases. The states that do not tax online purchases include Alaska, Delaware, New Hampshire, Montana, and Oregon.