Everything You Need to Know About Online Sales Tax Laws in Florida
Ecommerce has changed your way of life in many ways. You no longer need to go through the effort of getting dressed and making yourself look presentable to go out shopping. If it was a long day at work and you don’t feel like being on your feet, you can sit in the comfort of your home and do that gift or grocery shopping right from your smartphone, laptop, or tablet.
The convenience is alluring, and benefits, such as not having to pay sales tax, have made the option even more attractive. This was the case for quite some time, but states have realized that they are losing precious revenue by letting this market escape taxation. On June 21, 2018, the Supreme Court decision in South Dakota v. Wayfair, Inc. began the process of changing the way businesses must handle this issue. Most states, including Florida, have made progress in enforcing a sales tax on internet sales to their residents.
The Remote Seller Nexus
As far back as 2008, various individual states began attempting to enact provisions that would require online retailers to collect and remit sales tax. The tax legislation that affects ecommerce sales is known as the “Remote Seller Nexus.” When a business is located in a particular state, this connection is the nexus that requires them to charge sales tax on their products. The court ruling on South Dakota v. Wayfair, Inc. has expanded this nexus to include any state in which residents purchase goods from an online retailer, regardless of the business’ physical location. This is called an economic nexus, and it is based on sales volume in the state in which a retailer sells products.
The Effect of South Dakota v. Wayfair, Inc. on Internet Sales Tax
The Supreme Court ruling in 2018 has allowed most of the United States to start requiring ecommerce businesses to charge and remit sales tax to states their products are purchased in. Several states have already begun enforcing the current laws. Florida has not enacted its proposed legislation at this point, but several bills are on the table and set to be approved in the coming months. What this means for your business is that you will need to start collecting sales tax online for states you sell to, such as Florida, if you have not already.
Does Your Company Sell Goods in the State of Florida?
Proposed bill S.B. 1112 would have gone into effect for businesses selling goods online in Florida on July 1, 2019, but the bill was postponed and then died in appropriations. Economic nexus legislation in the state of Florida has yet to be enacted, however, Bills H.B 159 and S.B. 126 are slated to make such laws effective July 1, 2020. Under these provisions, you will be subject to the economic nexus if you meet the threshold of $100,000 or 200 or more separate transactions. Marketplace providers would also be required to collect and remit sales tax. Marketplace providers list or advertise items for sale and collect payment through a third party to assist companies in marketing their products.
How We Can Make Online Sales Tax Easy on Your Company
Although the laws are not in effect yet in Florida, now is a good time to begin preparing to comply with the upcoming changes to protect your ecommerce business’ profit margins. The basics of the proposed legislation in Florida are not complicated, but putting them into practice for your company may not prove to be as simple. Forix partners with online tax services to aid you in collecting and remitting sales tax as the law requires, without the worry of making costly mistakes. Our services will carefully follow your sales data, file all necessary tax forms, and ensure the state receives the appropriate sales tax, according to law.
Reach out to us now to begin planning to make the transition to Florida’s new laws as smooth as possible. July is just around the corner, and if your sales in the state of Florida top $100,000 or more than 200 separate transactions, you will be required to remit the appropriate sales tax to the state. Don’t allow the responsibility of collecting and paying these taxes to weigh down your operation and create additional work for your staff. Forix is here to take away your stress, save you money, and protect your bottom line. Give us a call today.
Disclaimer: The information in this blog post is provided for general informational purposes only and should not be construed as legal advice from Forix.