Local businesses suffer with Internet tax break

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I love bookstores. It's not unusual to find the whole Maxwell clan holed up in the Winter Park Borders, sipping coffee or hot chocolate while leafing through magazines and picking out books for the kids.

You know who else loves bookstores? The people who work there.

Working there allows them to earn a living and feed their families.

Unfortunately for those people, Florida lawmakers are helping put our local bookstores out of business — and putting brick-and-mortar stores of all kinds at a competitive disadvantage to online retailers.

They do so by forcing local companies to collect sales taxes while giving a break to out-of-state retailers.

Not only does this hurt local businesses and cost jobs, it also robs the state's coffers of as much as $1 billion.

That's right — a billion.

At a time when we're talking about laying off teachers, cutting funding to veterans programs, slashing funding for nursing homes and everything else.

And to what end?

So that Amazon.com can sell Twilight for 47 cents cheaper than the businesses that actually help our economy?

That's just wrong.

Let's back up for a minute, though, and start with the basics.

Current Florida law requires residents to pay sales tax on most purchases — including those purchased over the Internet.

Surprised? Well, you're not alone. Most Floridians are completely unaware that they're tax cheats.

Even the state knows this, posting on the Department of Revenue's website: "Most Florida citizens are not aware that this state has a 'use tax.'"

We do. Residents are supposed to file an "out-of-state purchase return" equal to 6 percent of any tax-free online purchases.

But the vast majority of Floridians file no such thing.

That's why it would make more sense for online retailers to collect the taxes themselves. Retailers with a physical presence in this state already do.

Let me give you an example with the Twilight book I mentioned above.

Now, I don't actually want to read Twilight. I think I'd rather offer my jugular directly to a vampire.

If I did want to purchase the book online, I would pay no sales tax on Amazon.com. (It says so right there at checkout: "Estimated tax to be collected: $0.00.")

But if I were to buy Twilight from Borders.com, I have to pay 47 cents in state sales tax.

They're both national online retailers. But Florida forces only one of them — the one that actually has a store that employs Floridians — to collect the sales tax.

Oh, and Borders — the one without a tax loophole— announced last week that it was closing 200 stores nationwide, four of them right here in Central Florida.

Say goodbye to 110 local jobs.

Now, obviously sales-tax collection isn't the only thing hurting bookstores.

Kindle is to paperbacks is what the Internet is to newspapers. Bookstores are having a tough go of things everywhere.

But other states are taking action to stop these punitive tax policies that give a competitive advantage to out-of-state retailers that don't do a thing for local economies.

Nearly half the states in America have joined forces to push legislation that would force online retailers to collect sales taxes nationwide. The states joining the Streamlined Sales Tax project are a mix of red and blue — from Wyoming to North Carolina. Our neighboring state, Georgia, was among the most recent to join, just last month.

Florida, however, has not joined the fight. Nor have Sunshine state "leaders" pushed Congress to implement national legislation to streamline collection practices — even though our state's staunchest business advocates have called for change.

Everyone from the Florida Chamber of Commerce to TaxWatch has described Florida's current non-collection policies as detrimental to the businesses that actually employ Floridians and help our economy churn.

Florida lawmakers should listen to them.

There is too much money — and too many jobs — on the line.

smaxwell@tribune.com or 407-420-6141

Copyright © 2014, Los Angeles Times
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