Florida wants to tax remote sales and marketplace sales starting July 1, 2019

Update 5.6.2019: SB 1112 died in Appropriations. It appears that Florida won't be taxing remote sales any time soon.

Florida is one of just two states with no remote sales tax law on the books. That will change starting July 1, 2019, if Senate Bill 1112 is enacted. New Mexico, the other late bloomer, is also looking to tax remote sales.

Economic nexus

SB 1112 would establish economic nexus in Florida, imposing a sales tax collection obligation on an out-of-state dealer who, in the previous calendar year:

• Conducts 200 or more separate retail sales of tangible personal property or taxable services for delivery in Florida; or
• Conducts any number of retail sales of tangible personal property or taxable services for delivery in Florida in an amount exceeding $100,000

Tax on marketplace sales

The measure would also require marketplace facilitators to collect and remit tax on all sales made through the marketplace if the facilitator has a physical presence in Florida or meets one of the economic nexus thresholds described above.

A marketplace facilitator required to collect and remit sales tax on behalf of third-party sellers would have to certify to those sellers that it will collect and remit applicable taxes on sales made through the marketplace.

When a marketplace facilitator certifies that it’s collecting sales tax on behalf of a marketplace seller, the seller “may not collect and remit the tax” on sales made through the marketplace. However, marketplace sellers may be required to collect and remit Florida sales tax on sales made through other channels, such as their own ecommerce store, if they have a physical presence in Florida or economic nexus as described above. In determining whether they’ve met the economic nexus threshold, marketplace sellers should exclude sales made through a marketplace.

Marketplace sellers with a sales tax collection obligation in Florida should exclude sales made through the marketplace from their tax returns. Additional details are available in the text of SB 1112.

Learn how different state marketplace facilitator sales tax laws affect marketplace sellers.

South Dakota v. Wayfair, Inc. spurs new sales tax policies in all sales tax states

With the Florida and New Mexico measures currently under consideration, all states with a general sales tax are either already taxing remote sales, soon to be taxing remote sales, or trying to tax remote sales. Even Alaska and Montana, two states with no general sales tax, are looking to take advantage of the Wayfair ruling.

On June 21, 2018, the Supreme Court of the United States overruled a long-standing physical presence rule in South Dakota v. Wayfair, Inc. Prior to Wayfair, states were prohibited from taxing sales by businesses without a physical presence in the state. Wayfair removed that physical presence restriction, thereby freeing states to tax remote sales.

All states have now jumped on that bandwagon. See Avalara’s state-by-state guide to remote sales tax laws to learn more about existing requirements.