Florida Senate Bill 50 was officially signed into law on April 19, 2021, requiring remote sellers and marketplace facilitators with taxable receipts over $100,000 in the previous calendar year to register for sales tax in Florida effective July 1, 2021. Once the taxable receipts threshold is achieved, retailers are expected to register to collect and remit tax immediately.
The rate at which remote sellers and marketplace facilitators must collect the state sales tax is 6%. In addition, retailers must also collect the discretionary sales surtax if making taxable sales into counties imposing the additional surtax.
Kickstarted by the landmark 2018 United States Supreme Court decision, South Dakota v. Wayfair, Inc., economic presence has become the nexus standard for which businesses must analyze on a state-by-state basis. While Florida’s $100,000 nexus threshold is similar to the standard established by a number of states, it is important to note that the standard is only measured by taxable sales. Furthermore, many states include “and/or” language in their Wayfair guidance to also make relevant the number of transactions for economic nexus purposes. The majority of the states that provide for a transactional threshold have settled on 200 transactions as the determinant to establish economic nexus. Florida’s law does not include such a provision.
While previous attempts at passing economic nexus legislation failed, Florida may have been motivated by the worldwide pandemic to utilize economic nexus as a way to boost state tax revenues. According to many estimates, economic nexus is expected to create more than $1 billion annually in additional tax revenue to Florida.
With the passage of this legislation in Florida, Missouri remains the lone state that imposes a sales tax that does not have an economic nexus standard.
Please contact your GBQ State & Local Tax representative for more information.
Article written by:
Senior Manager, State & Local Tax Services