Florida retail sales outpace the nation

Retail Trade is Seasonal

Historically, Florida retail sales peak in March and December. These same movements are observed in the U.S. retail trade data. This seasonality in tax receipts is a pattern that re-occurs, with holiday sales a big part of the December taxable sales spike. The March spike is made up of substantial spending increases in the apparel, lodging, and amusement spending categories.

Sales Tax Revenues are Expected to Increase over the Next 5 Years

Florida retail sales have momentum, and sales are expected to increase further. Florida’s Revenue Estimating Conference is projecting an annual increase of more than 5 percent in sales tax receipts over the next several years, from $22.295 billion this fiscal year to $27.405 billion in FY2018-19.

Untaxed Remote Sales put Florida Retailers, school children, and the elderly at a Disadvantage

Currently, the Florida Department of Revenue cannot collect sales taxes on online sales from vendors without a physical presence in the state of Florida, and only collect the taxes due if Florida residents voluntarily remit the sales taxes to the state. This results in a price advantage for remote retailers of 6-7.5 percent, putting thousands of Florida retailers at a significant competitive disadvantage.

This, in effect, penalizes the companies who have made investments in physical stores, in inventory, and in Florida employees. These Florida retailers also pay property taxes and support local economies in other ways, such as through charitable giving to local community agencies. In addition, the state foregoes millions of dollars in uncollected tax revenues that could otherwise be used to fund education or to reduce other taxes⁵, as Florida TaxWatch has recommended for more than a decade.⁶

Fortunately, some progress was achieved this year as Amazon, the world’s largest online retailer, began operating two distribution facilities in Florida, and since May 1, 2014, Amazon has been collecting sales taxes for its sales to Florida residents. The Florida Retail Federation has estimated that Amazon will collect approximately $80 million in annual levies.⁷

5    Due to a lack of state-specific e-commerce data, estimates of the sales tax revenue on remote sales that are not collected vary, ranging from $454 million to $803.8 million annually, according to several academic studies, as cited in Florida TaxWatch’s “Modern Management and Sensible Savings: Efficiency and Cost-Saving Recommendations for Florida in FY2014-15.” p.23

6    Florida TaxWatch. “Modern Management and Sensible Savings: Efficiency and Cost-Saving Recommendations for Florida in FY2014-15.”

7    Bloomberg. “Amazon Begins Collecting Florida Taxes for Internet Sales.”

» NEXT PAGE: Conclusion

Tags: Banking & Finance, Government/Politics & Law, Florida TaxWatch