There is currently a special loophole in the tax codes of most states that allows online retailers like Amazon.com and Overstock.com to avoid charging the very same sales tax that brick-and-mortar stores are required to collect from customers. This loophole denies states billions of dollars of tax revenue. For example, in “2011 alone, Wisconsin will lose an estimated $127 million in uncollected sales tax on purchases made online.”
Yesterday, the Daytona Beach News-Journal asked Florida Gov. Rick Scott (R) about this loophole. Scott admitted that the loophole is “not fair” to bricks-and-mortar stores, but then said he does not advocate closing it anyway because he doesn’t want to raise taxes:
Q: Today is Cyber Monday and thousands, if not millions, of Floridians will go online to make holiday purchases without paying the sales taxes they face in downtown shops. Bricks-and-mortar retailers not only provide jobs in our communities, but they pay property taxes that help fund services and education. What should the Legislature do to level the economic playing field?
SCOTT: It’s not fair. You shouldn’t be treated differently, whether you’re selling online or in bricks-and-mortar. That’s not fair. But, at the same time, my focus is not to do it where we raise taxes. I don’t want to take money out of the private sector. Is it raising taxes to have a mechanism that helps Florida collect the sales taxes we’re already supposed to pay? If it’s out of your pocket, that’s a tax.
Scott’s answer is disappointing, given how states ranging from California to Connecticut have moved to close this revenue-draining loophole.
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