SALT Report 2098 – The Florida House of Representatives introduced legislation that, if enacted, would revise the definition of “mail order sales” to include sales of tangible personal property ordered through the Internet. The bill also provides that dealers who make mail order sales and have nexus in Florida will be required to collect and remit sales and use tax. The text of HB 497 follows:
The bill amends the taxability of mail order sales to include every dealer who makes a mail order sale if the person, other than a person acting as a common carrier, has substantial nexus with Florida and:
- Sells a similar line of products as the dealer and does so under the same or a similar business name,
- Maintains an office, distribution facility, warehouse, storage place, or similar place of business in the state to facilitate the delivery of property or services sold by the dealer to the dealer’s customers,
- Uses trademarks, service marks, or trade names that are the same as or substantially similar to those used by the dealer,
- Delivers, installs, assembles, or performs maintenance services for the dealer’s customers,
- Facilitates the delivery of property to Florida customers by allowing the dealer’s customers to pick up property sold by the dealer at an office, distribution facility, warehouse, storage place, or similar place of business maintained by the person in Florida, or
- Conducts any other activities in Florida that are significantly associated with the dealer’s ability to establish and maintain a market in Florida
The legislation also provides that a dealer who does not have a physical presence in Florida would be required to collect and remit sales or use tax if the activities conducted in Florida on the dealer’s behalf were associated with the dealer’s ability to establish and maintain a market, unless the dealer’s gross revenue from in-state sales are less than $100,000 per year.
The bill creates a rebuttable presumption that every dealer who makes mail order sales will be required to levy and collect sales and use tax if the dealer enters into an agreement with one or more Florida residents under which the resident, for a commission or other consideration, directly or indirectly refers potential customers to the dealer. Referrals can be through a link on an Internet website, an in-person oral presentation, telemarketing, or otherwise. The cumulative gross receipts from sales to in-state customers who are referred to the dealer by residents with this type of an agreement must be in excess of $10,000 during the preceding 12 months.
The presumption can be rebutted by submitting evidence proving that the residents with whom the dealer has an agreement did not engage in any activity that was associated with the dealer’s ability to establish or maintain a market in Florida. The evidence can include sworn affidavits from each resident verifying that he or she did not engage in any solicitation on the dealer’s behalf.
If enacted, this Bill would become effective July 1, 2013.
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