Starting July 1, US online sellers will be required to collect taxes from consumers

Florida Governor Ron DeSantis signed a plan requiring online retailers to collect sales taxes from Floridians as consumers, raising an estimated $1 billion in revenue a year that would help provide tax cuts for some businesses.

But the move has sparked controversy in Florida.

In June 2018, the U.S. Supreme Court ruled that state and local governments have the authority to collect sales tax from online purchases, regardless of where the seller is located. Prior to South Dakota v. Wayfair, sellers only had to remit sales tax if the online purchase was made by someone in the same state .

After the ruling, most state and local governments took about a year to implement their own rules and regulations to collect these sales taxes.

Democrats oppose this particular bill, arguing it's a breakthrough for businesses at the expense of consumers. " The Governor just signed a bill to increase your taxes and bring $1 billion in new revenue to businesses , " Rep. Anna Eskamani, D-Orlando, said in a tweet.

Starting July 1, most online retailers with more than $100,000 in annual online sales will have to begin collecting Florida consumers’ 6% sales tax at the point of sale .

“ Missouri is really the only state that is collecting taxes on remote sellers right now, and we expect them to join Florida in passing legislation this year,” said Chuck Maniace, principal at tax firm Sovos . “Given the e-commerce boom caused by the pandemic , the importance of closing this enforcement gap is even more important to make up for any revenue shortfalls, especially in states like Florida that rely heavily on tourism for tax revenue. ”

Florida is one of several states in the U.S. that are still losing money as they try to recover from the pandemic . While personal income tax revenues have largely recovered since March 2020, sales tax revenues are still down an average of 2.4%. States like Florida that rely heavily on sales taxes and don't tax revenues will take longer to recover their budgets .

Sales tax revenue raised by the new Florida law will be used to replenish a depleted unemployment trust fund. Once the fund is replenished, the revenue will be used to pay for a tax deduction for commercial rents . Florida is the only state to collect a sales tax on commercial rents.

For sellers, imposing taxes on consumers may increase sales to a certain extent , but because of this tax requirement, consumers will become more cautious when shopping, or reduce the number of purchases.

And as the epidemic situation gradually stabilizes, the resumption of physical stores will also prompt consumers to reduce their desire to shop online.

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