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Wednesday, Apr 23, 2014
Editorials

Scott wrong on Amazon deal

Published:

Gov. Rick Scottís rejection of Amazonís plans to build a warehouse in Florida is puzzling at best. At worst, it smacks of politics getting in the way of whatís best for Florida.

Itís hard to tell exactly where the decision falls because the governor isnít sharing the details of his negotiations with the online retailer over a plan that could have delivered jobs and boosted state revenue.

Based on the available information, we think it was the wrong decision.

Like every state, Florida is at a disadvantage when it comes to collecting sales tax from online retailers with no physical presence in the state. Federal law prohibits states from requiring out-of-state retailers to remit state sales taxes. Instead, customers are supposed to remit the tax. Of course, that almost never happens.

Which is why Amazonís interest in building a warehouse in Florida seemed like a windfall. Once that warehouse was up and running, the state could begin collecting the 6 percent sales tax on Amazon purchases, the same 6 percent tax it collects from brick-and-mortar retailers across the state.

In early 2012, the Seattle-based retailer considered building two warehouses and possibly employing as many as 2,500 workers. More recently, it considered a single warehouse to open by 2015 with an undisclosed number of jobs. Amazon has similar deals with several other states.

But after months of negotiations, Scott announced last week there would be no deal. His spokeswoman said the governor considered the prospect of collecting the 6 percent sales tax to be a tax increase on Floridians. The unspoken motivation for Scottís decision is that it might cast him as pro-tax when seeking re-election next year.

Itís a false argument that a decision to tax Amazon sales represents an additional tax on Floridians when the state collects the sales tax on brick-and-mortar retailers. In many ways, the rationale is an insult to retailers who must compete with online behemoths such as Amazon. Those retailers are all too familiar with shoppers who price goods on the store shelves, then leave the store to buy those products online without the sales tax.

Scott isnít the only politician turning his back on this inequity. State lawmakers this past legislative session considered a bill to force online retailers to remit sales taxes. It was an attempt to position the state for a possible change in federal law that will open the door for states to collect the sales taxes.

The measure failed, despite estimates that between $200 million and $800 million a year could be collected in taxes remitted by online retailers without a presence in the state.

A U.S. Senate measure passed recently that would force online retailers to remit the sales tax to the states where the purchase occurred. But the U.S. House of Representatives seems disinclined to pass the measure, claiming it represents a tax increase.

The issue is about fairness, not taxes. State leaders, if they wish, can make the collection of online sales tax revenue neutral by cutting other taxes. Refusing to force online retailers to collect and remit the sales taxes creates an uneven playing field that harms local merchants.

Getting huge retailers such as Amazon to contribute to the stateís economy is a no-brainer. Until politics enters the equation.

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