In 2018, the U.S. Supreme Court ruled in South Dakota vs. Wayfair that states can require online businesses to collect sales taxes, even if they do not have a physical presence in the state. After nearly 3 years, Florida is finally about to do so.
On April 19th, 2021, Governor Ron DeSantis signed into law a tax package, Senate Bill 50, to require out-of-state online retailers to collect sales taxes on purchases made by Floridians.
Beginning on July 1st, 2021, retailers selling more than $100,000 a year online will have to start collecting 6% sales tax from residents at the point of sale. Businesses who sell less than $100,000 a year online will be exempt from collecting this tax.
How much will this cost me?
While Floridians may view this law as controversial, many will be surprised to learn that they will simply be paying tax on something they were supposed to be paying for years.
Very few know that consumers who did not pay sales taxes on their online orders are supposed to download a form a pay those associated taxes to the state on their own. The good news is that the new legislation will also forgive those who have neglected to voluntarily pay taxes on remote sales that occurred before the effective date, and will protect them from being audited in the future.
Where is the revenue going?
Supporters claim that the new law will bring in an additional $1 billion a year in revenue that previously went uncollected to help replenish the unemployment trust fund, which was significantly reduced due to the job losses during the COVID-19 pandemic. This is estimated to take roughly 4 years to restore. After the unemployment trust fund has been filled, the money will go towards lowering the tax businesses pay on commercial rentals.
At Brock CPA, we stay up to date with the ever-changing tax laws and work with you to analyze changes in your business and personal situation to see how tax law changes may impact you. We pride ourselves in smart, ethical, accurate, and timely tax planning, preparation, and filing.