What You Need To Know About Selling Online In Florida

If you live in Florida and often participate in eCommerce – online buying or selling – you may be subject to sales or “use” tax. Here is a quick breakdown of the new Florida Internet sales tax rules, including the rules for Florida internet sales tax 2020 and Florida internet sales tax 2021, which you ought to be familiar with before you engage in further e-commerce activity! 

If you sell merchandize via an online website, you might owe Florida internet sales tax. 

You Might Owe Florida Tax 

While most people are aware of owing income and property tax to the state, they might not know that they owe Florida internet sales tax as well! 

Florida has a “use tax,” which applies to any items bought from outside the state; items that would have been taxed if they’d been bought in Florida. Unlike income tax rates which can vary depending on the bracket you fall into, the use tax rate is the same for all unregistered dealers, i.e. 6% - the same as the general tax rate. This rate is used for Amazon, Everythingeshop, and eBay sales tax in Florida. 

So which items can you expect to pay Florida internet sales tax on? Examples include:

• Any items purchased through the Internet;
• Any items bought using mail-order catalogs;
• Items purchased from another country;
• Furniture items bought from dealers in another state;
• Computer equipment ordered from an out-of-state vendor.

Florida Remote and Online Seller Tax Rules 

Under section 212.06(8) of the Florida Statutes, you are obligated to pay Florida sales tax on goods shipped out-of-state even if the seller fails to collect them. In this case, you can comply with the law by submitting the payment to the Florida Department of Revenue directly. 

You can either do this online, such as for Florida internet sales tax for eBay, or you can file a physical Out-of-State Purchase Return form. For the former, use your bank's routing number and your bank account number on the application available at the Department of Revenue’s website. For the latter, download the form from their website and mail it with a check or money order as payment. Cash is not acceptable in this case. 

If you are a registered Florida deal, you needn’t use the return form mentioned above; you should simply report and use tax on your sales tax returns. You also shouldn’t use this form if you purchase an aircraft or boat out-of-state and bring it back into Florida; in this case, you must use the Sales and Use Tax Return for Aircrafts from the website. 

Is There An Exception? 

If you are wondering what is exempt from sales tax in Florida, there are certain exceptions available: 

• Items you purchased and used in another state inside the US or the District of Columbia for six months or longer before being brought into Florida (this rule does not apply to items purchased and used in another country); 
• Motor vehicles purchased and used in a foreign country for six months or longer either by an active member of the US Armed Forces or their spouse.

Additionally, if the use tax owed is less than a dollar, you aren't required to file a return for it. 

Is There A Credit For Any Tax Paid At The Time Of Purchase? 

A credit can be availed in certain situations. For instance, if you paid sales tax at the usual rates, i.e. 6% or more to the seller at the time of purchase, then there is no tax due. But if the seller collected less than 6% in sales tax, you need to pay use tax calculated as the difference between what you paid and the required 6% rate. 

When Must The Tax Be Paid? 

This tax is due on the first day of the month after the quarter during which the respective purchases were made. You must pay it before the 20th unless the 20th falls on a weekend or federal holiday; in this case, you can pay it on the first business day after the 20th.

That being said, if you are a taxpayer that makes occasional out-of-state purchases, it is better for you to pay the tax by filing a return form after making the respective. There is no limit to the number of such forms that you can file during the year. 

Proposed Federal Legislation

It used to be that the state of Florida could only charge online sales tax to an online retailer that had some sort of physical presence in the state, but this requirement was overturned by the Supreme Court's June 2018 decision in South Dakota v. Wayfair Inc. Now, nearly three years later, Florida had passed a bill to tax online sales regardless of any physical presence. 

The plan for collecting these taxes was signed into law by Gov. Ron DeSantis and is expected to raise about $1 billion a year to help pay for a tax cut for small businesses. Other representatives such as Steve Bousquet and Anna Eskamani have also voiced their support for this plan in the past. 

Florida Internet Sales Tax – FAQs 

Yes, as of 2021, Florida charges online sales tax to both registered and unregistered online retailers. Your Florida online sales tax bill can be paid either online or by mail. 

Generally, internet sales are only taxed if your business has a physical presence, called a “nexus,” but some states like Florida now require online sales tax even from businesses that don’t have a nexus. 

The states that currently require online sales tax are Alabama, California, Massachusetts, Illinois, Indiana, Kentucky, Pennsylvania, Maine, Maryland, Michigan, Minnesota, Hawaii, Mississippi, New Jersey, Nevada, North Dakota, Ohio, Oklahoma, Rhode Island, Vermont, Washington, and Wisconsin. 

Exempt services in Florida include certain cleaning services like carpet cleaning, pressure cleaning the exterior of a building, and transient rental cleaning services, as well as some protection and investigation services. 

References

1. Understanding Taxes. IRS. https://apps.irs.gov/app/understandingTaxes/index.jsp