After several years of failed bills, Florida has finally joined the other 43 states that exceeded the economic nexus for sales and use tax purposes following the ruling by the US Supreme Court in South Dakota against Wayfair Inc. on April 19, 2021. Governor Ron DeSantis signed SB50, which enacted laws that impose VAT collection on both distance sellers and marketplace providers.
Under the new Florida law, anyone with a significant number of distance sales into the state is considered a "dealer" and must collect and transfer sales tax. A "significant number of distance sales" is defined as any number of taxable distance sales in the previous calendar year where the total sales price exceeds $ 100,000. "Distance Selling" only includes retail sales of tangible personal property that is delivered into the state. Unlike some other states, non-taxable sales and sales of services are not included in total revenue to determine if the threshold has been exceeded.
The same thresholds apply to marketplace providers and marketplace sellers. The marketplace seller should not include sales made through the marketplace intermediary in determining whether the $ 100,000 threshold has been exceeded. The marketplace seller must also exclude sales made via a marketplace relief in his tax return. Marketplace vendors must certify marketplace sellers that they collect sales tax on their behalf.
The law comes into force on July 1, 2021. So if the total of taxable sales in 2020 exceeds $ 100,000, the merchant must register and begin collecting Florida sales tax on taxable sales to Florida on or after July 1, 2021. There is also a Safe Harbor provision that exempts a trader from taxes, interest, and penalties due on sales before July 1, 2021 if they register with the Treasury Department before October 1, 2021. This does not apply if the dealer is under contract examination; is in administrative or legal proceedings as of July 1, 2021; or an invoice, notification or request for payment has been issued.
At this point, Missouri is the only other state that has a state sales tax with no economic nexus provision. Therefore, it is only a matter of time before all states impose an economic nexus for sales and use tax purposes. However, the threshold of each state is slightly different, so it is important to understand the threshold in all 44 states.