On Cyber Monday, the online retailers’ version of Black Friday, consumers were predicted to have spent $2 billion on that single day, having spent an estimated $1 billion online on Black Friday. If you live in Florida, you were able to make your purchases and generally evade paying any sales tax at the time of sale (unless the retailer is based in Florida).
While Florida has bled red ink from its state budget for years, slashing spending for everything from education to health care to environment, one of the major sources of state revenue – the sales tax – has failed to collect anything near the amount possible from online sales.
Few states have taken the steps needed to collect sales tax from online purchases.
A leading opponent of any online sales tax has been giant online retailer Amazon.com. Amazon has been playing ‘let’s make a deal’ with state legislatures for years, offering to build facilities, make capital investments, and bring new jobs in exchange for forgoing or delaying imposition of any online sales tax, like in Tennessee, for example. The delaying tactic is in the expectation that Congress will institute national guidelines for online sales taxation. Apparently Amazon and their online retailing cohorts like eBay and Overstock.com have not considered Congress’s grinding dysfunction to do anything about taxes, tax codes, or tax anything.
These tactics by Amazon are a marked change from its earlier bullying, like in Colorado in 2010 and Illinois in early 2011 where it fired its in-state associate retailers in retaliation for the states’ imposing the sales tax. The idea was to deny sales through any state-based associates; no in-state sales, no sales tax collection. When you’re Amazon, you don’t mind taking a loss to deliver a black eye to an opponent.
There has also been the tactic of rewarding those who give Amazon what it wants, like in Arizona, where new distribution centers are being sited as long as there is no hint of any online sales tax.
Here is how the map looked in late 2011 as Amazon did its wheeling and dealing, published by TheStreet.com. (See slideshow.)
States like budget-crunched California began collecting the online sales tax despite Amazon’s determined efforts to forestall it in this huge consumer state. More on this in the featured video from Business Insider; forebear the Kindle Fire analysis and listen for the sales tax discussions.
Amazon has decided to face the music as its tax firewall crumbles, exposing it to myriad state and local sales taxation rates and destinations. Given Amazon’s ability to handle retail traffic, it doesn’t seem like processing sales tax collections should be such a struggle. It seems more likely that Amazon (a) doesn’t want the added cost of doing such tax processing, but moreover (b) doesn’t want to lose the pricing advantage it has always enjoyed over brick-and-mortar “Main Street” retailers who have always had to collect and remit sales taxes, and have always had those taxes built into their pricing which adds 6%-9% to the cost.
Click here and you can watch a video as Amazon CEO Jeff Bezos swallows really hard and often, blinks a lot, and tells a CNN/Money interviewer last month that Amazon has always supported a federal rule on state collection of online sales taxes and thinks it will happen soon.
So, I know you’re wondering where Florida fits into the picture, being a major retail state with significant budgetary needs. Haven’t heard anything? Well, you haven’t missed anything; there is no talk of going anywhere near collecting an online sales tax in the Sunshine State.
This is pretty remarkable since heavy hitting, right wing, pro-corporate lobbyists like Florida Chamber of Commerce, Associated Industries of Florida, and Florida Retail Federation actually support a Florida online sales tax, or at least they say they do. The Chamber estimates that Florida will fail to collect about $450 million in sales tax revenue this year.
Since these lobbying groups typically can buy their way to the souls of GOP legislators, what’s the hold up? Usually, it’s idiot ideology rearing its ugly head – yes, I mean you, Tea Partiers. While the Chamber and their corpo cronies point out that it would simply be the collection of an existing tax, not the imposition of a new tax, we still have had dim-witted responses like this one from former Senate President Mike Haridopolos in October, 2011:
“I think we made a pretty firm statement as far as sales taxes are concerned or tax increases, that there would not be an increase in taxes,” Haridopolos told reporters … “If there were any adjustments, we’d have to see an equal reduction somewhere else … The income revenue from increased taxes would not be passing the Senate, and it would not pass the House,” he added. “And if somehow it passed both chambers – which I consider the likelihood zero – the governor would surely veto it, if it was a revenue enhancement.”
In true anti-government mindlessness, Haridopolos would have required reduced government spending to offset the addition of new tax revenue. It makes absolutely no sense, except as ideological flatulence. Gov. Scott follows similar logic, unsurprisingly given his historic proclivity for Tea.
This needs to be remembered when the next budget proposal gets kicked around in Tallahassee this spring. These clowns cry about the state’s lack of funds and insist that the skinny people tighten their belts further while the fat cats let their belts out with tax breaks and privileged treatment. These same GOP clowns won’t lift a finger to act intelligently and take the steps needed to begin collecting the cyber sales tax.
That $450 million would surely help, but first Florida needs worthy leaders.