EDITORIAL

Mar 8, 2010 — Tampa Tribune

Mar. 8, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- There is nothing conservative about allowing out-of-state merchants to escape Florida's sales tax. It shows contempt for the law, increases the need for other fees and taxes and penalizes in-state retailers who create jobs and pay a variety of local taxes.

Yet the Florida Legislature, particularly the House of Representatives, has been reluctant to try to collect the sales tax from out-of-state merchants who sell by mail. With the state facing a $3 billion shortfall this year, and perhaps as much as $5 billion next year, this nonsense should stop.

It's estimated the state loses $2 billion a year because of its failure to collect the tax on remote sales. And Rep. Kevin Ambler offers a promising way to collect the taxes on Internet and catalog sales.

The Hillsborough Republican suggests the use of special software that would allow the company that processes a credit card transaction to automatically calculate and charge the sales tax. Customers would not have to do any calculations. He says besides capturing the sales tax, the state could profit by licensing the unique software.

He sweetens the plan with a proposed tax cut. Once Internet sales reached $5 billion, he says, the state would reduce its six-cent sales tax by a cent.

Ambler's proposal needs to be vetted: How much would the collection costs be, and would customers find ways to dodge the tax?

Another concern would be the privacy rights of purchasers. But those who purchase on the Internet freely give credit card information to the vendor, so using that card to calculate a state tax would seem appropriate.

Ambler's plan offers a far more direct way of collecting than the alternatives. The state could seek to have vendors voluntarily charge the sales tax. And it could join the Streamlined Sales Tax Project, a cooperative effort of more than 25 states that are working to simplify and automate the collection of sales taxes. Once the states develop an effective system, approval would be sought from Congress for a nationwide law.

If the state does nothing, then it will continue to lose out on revenue to which it is lawfully entitled and which would diminish the need to consider other fees or taxes.

Last year, in the midst of the worst recession in generations, remote sales increased 15 percent. This trend will erode the revenue structure that sustains Florida's government if lawmakers don't act.

It is encouraging that some House and Senate leaders seem interested in giving Ambler's idea a fair hearing.

Rep. Ellyn Bogdanoff of Fort Lauderdale told the Tribune's Catherine Whittenburg, "I think it's extremely creative; I just need to understand more about it." That's a responsible stance.

Perhaps Ambler's plan will prove unworkable. But it seems to furnish Florida an efficient way to enforce the law and stop the dubious policy of giving out-of-state firms a decided advantage over state businesses.

Newstex ID: KRTB-0201-42659194