Main Street Fairness Act

By Matthew Falconer

The debate continues over the collection of sales tax over the internet. Technically people who buy products over the internet are required by law to pay the tax in the state in which they live. But almost no one does this so internet based companies have an advantage of 5-10% in price over their brick and mortar competition.

The “Main Street Fairness Act” has broad support in the retail sales industry. It also has support in the small business community. Consider the average small business has a net profit of less than 5% of sales. Government makes more from their work that the business owners in sales tax alone. Small businesses pay property taxes, school taxes, and taxes on utilities. Increasingly their competition is from foreign vendors who pay no tax at all to American companies.

Senate Bill 1452 was introduced in 2011 and so far has only Democratic sponsors in the United States Congress. Not surprisingly there is support for the bill on a state level by Republicans and Democrats alike. Even Jeb Bush supports some type of internet sales tax. There are complications to the collection procedures but the technology exists to address those problems. The obstacle to the internet sales tax collection problem is political. It is seen as a tax increase which is taboo for Republicans.

The easy solution to that problem, again supported by Jeb Bush, is to reduce taxes by the same amount of the increased revenue from internet sales tax collection. This does not create additional taxes but levels the playing field between brick and mortar stores, the ones that employee our neighbors, and on line retailers (many of which are based in other countries).

My proposed law levels the playing field and reduces the tax burden on small business at the same time.

Florida Main Street Fairness Act

Whereas, businesses operating within the State of Florida are required by law to collect sales tax and remit to state government;

And Whereas companies located outside of Florida are not required to collect sales tax on purchases made within the State of Florida;

And Whereas many of those companies are located outside of the United States of America;

And Whereas the reduced price offered by internet companies places Florida business at a competitive disadvantage;

And Whereas Florida businesses employee our citizens and deserve to be treated equally with outside competitors;

We therefore enact this “Florida Main Street Fairness Act” to protect and preserve the Florida economy.

1. Every company that sells products to residents who live in or reside in the State of Florida at the time of purchase sale collect and remit to the State of Florida the appropriate sales tax on the goods sold.

2. This law shall correct the inequities currently in our tax system by requiring sellers to collect taxes on goods or services delivered in-state regardless of the location of the seller.

3. Florida shall adopt a “Streamlined Sales and Use Tax Agreement” to allow for simplification of its sales tax law to allow out of state vendors to easily determine the appropriate sales tax collected.

4. The “Streamlined Sales and Use Tax Agreement” shall provide uniform definitions of products and product based exemptions.

5. The “Streamlined Sales and Use Tax Agreement” shall provide for uniform collection and reporting procedures.

6. The “Streamlined Sales and Use Tax Agreement” shall allow for a “small seller” exemption.

7. The State of Florida will reduce the tax burden on employers by an amount equal to the increased revenue from internet sales tax collections.

8. When the internet sales tax collection commences, Florida will cease collecting sales tax on “additional rent.” The sales tax on additional rent is a sales tax Florida businesses pay real estate taxes and other expenses they pay that are collected by a third party.

9. The elimination of sales tax on additional rent will provide a tax break to every business operating in Florida and make this law “revenue neutral.”

This law is subject to the United States Congress passing a law allowing states to collect sales tax on internet sales, or an action by a court granting such authority.

The Florida Main Street Fairness Act is revenue neutral and shall make our employers more competitive and our economy stronger.

/

Support Florida Political Press