Sales Tax Alert-Florida S.B. 1112 Introduced; Adds Economic Nexus & Marketplace Facilitator Concepts
Updated: May 16, 2019
[UPDATE May 3, 2019 ]
SB 1112 has been indefinitely postponed and withdrawn from consideration; It died in Appropriations.
[As originally posted March 6, 2019]
S.B.1112 was introduced in the Senate on March 5, 2019, which in part mirror's South Dakota's "economic nexus" standards recently affirmed by the U.S. Supreme Court in South Dakota v. Wayfair, 138 S. Ct. 2080 (2018). Moreover, it adds the concept of marketplace facilitators (termed "marketplace providers"in this Bill) seen recently in other states seeking to tax remote sales made via various online platforms.
If enacted, effective July 1, 2019, "marketplace providers" would be responsible for collecting and remitting sales tax on sales conducted through their online platforms if they make a substantial number of remote sales, which in s. 212.0596(3)(b) is defined as:
1. Conducting 200 or more separate retail sales of tangible personal property or services taxable under this chapter in the previous calendar year to be delivered to a location within this state; or
2. Conducting any number of retail sales of tangible personal property or services taxable under this chapter in an amount exceeding $100,000 in the previous calendar year to be delivered to a location within this state.
S. 212.05965(1)(b)(2) defines "marketplace providers" as those companies:
a. Providing payment processing services
b. Providing fulfillment or storage services
c. Listing Products for sale
d. Setting prices
e. Branding sales as those of the marketplace provider
f. Taking Orders
g. Advertising or promoting
h. Providing customer service or accepting or assisting with returns or exchanges
Note that the categories listed are broad and could snare many companies who traditionally did not have a sales tax collection obligation and may not be aware of their new responsibilities.
"Marketplace sellers" using these platforms would be excluded from charging and collecting sales tax on all their transactions conducted online. However, if they have physical nexus in the state they are still required to register, and collect and remit sales tax on all taxable sales made outside of the marketplace platform.