Sales Tax Efforts Heat Up in Florida, Ohio, and West Virginia

As the Marketplace Fairness Act of 2013 continues to gain momentum in the U.S. Congress, three more states are considering enactment of sales tax fairness legislation. Ramping up efforts to level the playing field for Main Street retailers are Florida, Ohio, and West Virginia.

Florida

In Florida, on Thursday, April 11, an affiliate nexus-warehouse bill introduced by Sen. Nancy Detert (R-Sarasota) passed the Florida Senate Appropriations Subcommittee on Finance and Tax. The bill would require remote retailers that maintain an office, distribution facility, warehouse, storage place, or similar place of business in the state or that have a network of online affiliates acting as sales agents in the state that do $10,000 or more in sales in a one-year period to collect and remit sales tax.

“This has been something that the business community has wanted us to do for a long time,” said Sen. Detert, as reported by MySunCoast.com. “They call it e-fairness. Our local businesses, brick-and-mortar small business people collect sales tax but they are at a disadvantage with people who sell the same products on the Internet.”

Detert told MySunCoast.com the state’s current tax code results in unfair competition for many stores, and that the sales tax inequity also resulted in a revenue loss of more than $449 million in 2012. “Our tax code was written before the Internet was invented, so this is basically a tax modernization that will result in collecting some taxes that weren’t previously collected,” Detert noted.

Florida booksellers are urged to contact their state lawmakers to encourage them to support SB316 and its House companion legislation, HB7097.

Ohio

Ohio’s House of Representatives has proposed expanding the definition of nexus to include so-called “drop shippers” in the state, points at which a manufacturer’s product is “shipped in and re-boxed as the Internet retailer’s shipment,” reported CPA Practice Advisor.

The language expanding what constitutes a physical presence in the state has been added to Ohio’s two-year budget bill. If passed, it essentially would require an online retailer such as Amazon.com to collect and remit in the state.

The expansion of the definition of nexus was advocated by the Ohio Council of Retail Merchants (OCRM), which noted that Ohio loses $200 million a year in sales collection as a result of goods purchased online. “This is the number-one issue for retailers nationwide,” Gordon Gough, OCRM executive vice president and chief financial officer, told CPA Practice Advisor. “It doesn’t discriminate. [Untaxed Internet sales] hurt small retailers as well as large retailers.”

A final budget must reach the governor’s desk by June 30.

West Virginia

On Saturday, April 13, the West Virginia legislature approved HB2754, a bill that would require remote retailers with a warehouse or subsidiary in the state to collect and remit sales tax for in-state purchases. Amazon.com has a customer service center in the state.

The bill passed the House by a vote of 85-12, as reported by Associated Press, and was then unanimously passed by the Senate. The bill was proposed by Gov. Earl Ray Tomblin.