Real taxes for not real economy

In Florida the same taxes and rules that apply to a traditional “Main Street” merchant will apply to merchants who carry out business over the Internet. Use tax at the rate of six percent that is levied on sales made by customary means is also levied on e-commerce transactions. Electronic merchants are obligated to collect and remit applicable use tax for all of their transactions.
Florida statute chapter 212.05 deals with the provision of taxation on sales, use and other transactions over the internet. According to this statute anyone who engages in the business of selling tangible personal property at retail in Florida, or anyone who stores for use or consumption any item or article of tangible personal property in the state of Florida is liable to be taxed.

Use tax applies to purchases of taxable goods or services that are brought into Florida. Anyone purchasing taxable items or services through the internet or from a mail-order catalog company, or making purchases in another state that are shipped to Florida will be obligated to pay use tax. Use tax is to be paid if sales tax is not paid when the item is being bought, or if the sales tax paid to another state was less than what would have been required to be paid in Florida.

A registered sales and use tax dealer is responsible for accruing and paying use tax and a discretionary sales surtax on taxable purchases. A use tax accrual account must be set up either by the dealer or his bookkeeper to record and pay use tax. Use tax and discretionary sales surtax must be reported on the return for the collection period during which the item was used.

Return and payment in the state of Florida are due on the 1st and late after the 20th day of the month following each collection period. Dealers must file a return even if no tax is due.

Pursuant to Florida’s recently enacted Senate Bill 404, internet access charges are not considered to be taxable telecommunications services, and thus are not subject to sales tax or any other tax.

Anyone purchasing any advertising space on a company homepage is not liable to tax.

In the matter Dept. of Revenue, State of Florida v. Quotron Systems, Inc., 615 So.2d 774 (Fl. 1993), Quotron was carrying on the business of transmitting financial data to customers by electronic means. The Florida Department of Revenue evaluated an approximate amount of $ 3.8 million as unpaid sales tax along with interest and penalties payable by Quotron for a period of four years. According to its business plan, Quotron charged only for the use of data. Customers who used their own display terminals paid likewise to those who used Quotron's terminals. According to the Department of Revenue, Quotron was liable to pay sales tax on its transmission of electronic data, since the transmission of electronic images is a sale of tangible personal property; as such images are perceptible to the senses.

The Florida Court of Appeals, however, held that Quotron was not liable to pay sales tax. According to the Court, the images on the screen were not capable of being either touched or possessed, and hence the images could not be treated as tangible personal property subject to sales tax.

What is the “discretionary sales surtax”?

The “discretionary sales surtax”, which is also known as county tax, is imposed by many Florida counties and applies to most transactions which are subject to sales tax. This surtax is collected in addition to Florida's general sales tax of six percent. The rate of discretionary sales surtax is dependent on the rate in effect for the county where taxable merchandise or services are delivered. A few counties do not impose the surtax.

The Department of Revenue collects the discretionary sales surtax and distributes it back to the counties that levy the surtax. The fund that contains each county’s collected surtax is used for specifically authorized projects within the specific county.

All registered sales tax dealers, as well as out-of-state dealers, who sell and deliver taxable merchandise or services within a county imposing the discretionary sales surtax, are required to collect and remit the surtax. This requirement applies to all dealers doing business in the taxing county, regardless of where the selling dealer is located.

Dealers are not required to collect surtax when the sale or delivery of taxable merchandise or service is made within a county that does not impose surtax.

What are the responsibilities of e-merchants in Florida?

Registered dealers act as agents of the state and are responsible for collecting sales tax on each taxable transaction. The responsibilities of e-merchants include paying the use tax on items used by the business that were purchased tax-exempt or which have been removed from inventory and will not be resold. Tax can be paid online. E-merchants can send a completed Sales and Use Tax Return (DR-15) with a check to the appropriate authority. The dealer must keep complete and accurate records on all sales and purchases.