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Kiss Your Tax-Free Amazon Orders Goodbye: Company’s I-4 Warehouses On the Way

| October 27, 2013

A view on sales taxes.

A view on sales taxes.

The confirmation by that it will build a pair of massive “fulfillment” centers along the Interstate 4 corridor means that sometime in the next two years Floridians will have to start paying sales taxes on purchases from the online retail giant.

But even with Amazon eventually joining other businesses located in Florida in collecting the state’s sales tax, some groups will continue pushing to eliminate an exemption that has allowed out-of-state online retailers including eBay and Overstock to avoid the tax.

The Florida Retail Federation, which has long called for ending the exemption, estimates that between $80 million to $90 million a year in sales taxes will be paid once Amazon starts collecting. Amazon announced this week that it would build distribution centers — or what it calls “fulfillment” centers — in Lakeland and Ruskin.

The Department of Revenue requires online companies to begin collecting sales taxes once “a company has a physical presence in the state,” said Renee Watters, a department spokeswoman. That has allowed many out-of-state online retailers, including Amazon, to avoid adding the taxes to online purchases. Floridians are supposed to pay the taxes themselves when they buy from online retailers, but few do.

It remains unclear when the tax will be included on the Amazon website.

That could be when dirt is first turned on either of the distribution centers that Amazon announced this week, or when the first package is ready to roll out the doors of either location.

“It is a very fact-based situation and it depends on the facts of each individual circumstance,” Watters said.

Asked about when construction of the new centers could begin or when the first packages will be shipped, Amazon spokeswoman Kelly Cheeseman instead replied in an email that the Seattle-based company was “excited” to bring full-time jobs to Florida and that when hiring begins jobs will be posted online.

The distribution facilities in Lakeland and Ruskin are part of a growing competition among businesses to shorten delivery time, which could be an indication that Amazon will want to quickly get the centers up and operational.

The company already has the support of each local community, which should help speed the permit approval process. Hillsborough and Polk counties approved incentives packages to help attract Amazon.

Amazon’s entry into Florida’s brick-and-mortar retail landscape won’t end efforts by some business groups to get Florida to impose what they call “e-Fairness” tax laws and Congress to approve the Marketplace Fairness Act. The federal act would give states the authority to require online and catalog retailers — regardless of where they are — to collect sales taxes at the time of transaction.

“Amazon really hasn’t changed the legislative situation at all,” said John Fleming, a spokesman for the Florida Retail Federation. “There is still a loophole in Florida law, there is still a loophole in federal law as far as we’re concerned. We’re still going to need legislation to close this loophole.”

The Florida Chamber of Commerce agrees.

“The day that Amazon comes on line they will begin paying sales tax and that will greatly contribute to a fairness between main street and online retailers, but that does not do away with the argument because unfairness will remain until lawmakers take a look at how to address that,” said chamber spokeswoman Edie Ousley.

Lawmakers for years have looked at online sales as a possible source of tax revenue. Eight bills on the issue died during the 2013 state legislative session, including one (SB 316) that would have offset the additional revenue collected by lowering other taxes.

The proposal was strongly supported by Florida retailers that rely on non-Internet sales and have claimed for years they’re at a disadvantage because buyers can purchase items online without paying sales taxes.

The hurdle has been the reluctance of state lawmakers to impose new taxes, a barrier that could be greater next year when many will be up for re-election.

And the disparity between online and brick-and-mortar retailers, even with Amazon joining the side of companies collecting sales taxes in Florida, is only expected to widen, Fleming said.

Online sales are growing. They are estimated by the retail federation to account for about 5 percent of all sales in Florida, of which Amazon is about 10 percent.

“It’s a huge market and those are conservative numbers,” Fleming said.

When the governor’s office announced in June that Amazon intended to expand into Florida, the news release said Amazon would begin collecting Florida sales taxes “at such time as it is required under current Florida law.”

The June announcement came a month after the deal was considered scuttled as the two sides were unable to reach an agreement on when Amazon would have to start collecting the taxes. Reports at the time noted that Amazon was seeking a two-year exemption from collecting state sales taxes.

The Lakeland facility will concentrate on packing and shipping large items, such as kayaks and televisions, while the center along I-75 in Ruskin will handle smaller items, ranging from books to electronics and consumer goods.

–News Service of Florida

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7 Responses for “Kiss Your Tax-Free Amazon Orders Goodbye: Company’s I-4 Warehouses On the Way”

  1. tulip says:

    I don’t mind paying the sales tax to Amazon, or any other online company that has a presence in Florida. At least it will bring some money into our state and a lot of new jobs will be created at Amazon.
    It’s no big deal to pay 70 cents on a $10 order or $7.00 on a hundred dollar order. I only order on line when I can’t find something locally and the shipping charges can equal or surpass the sales tax amount if you bought the item in a local store.

    People that purchase things online deprive a brick and mortar business of a certain percentage of income. At least the sales tax will help the state, which in turn spreads some of it around to all the counties.

    • The Truth says:

      People that purchase things online deprive a brick and mortar business of a certain percentage of income?

      Isn’t that called “competition”? I order on Amazon not because it’s tax free, but because I like the convenience of home delivery. I have a Prime membership, I order a lot of things and get them in two days or less and I save quite a bit of money doing so. Amazon’s customer service is top notch and I like supporting a company that treats me well. I will never step foot in another Walmart as long as possible. I dislike the companies values and the way they treat their customers (telling them to get food stamps and medicaid instead of providing a reasonable wage to those who help them get their record profits quarter after quarter).

      I’ll continue to support Amazon long after the sales tax comes to Florida. I am hoping that with a warehouse so close that same day shipping will be possible as they are starting to do in another areas near warehouses.

    • Nancy N. says:

      You speak of brick and mortar businesses as if they are some sort of holy place. You do realize that online businesses also employ and support people, right? I mean, who do you think is on the other end of that computer? They just conduct their business in a different way. There are plenty of people running online businesses from their homes in this community, bringing money into the state from outside.

      I don’t shop online for the tax free shopping I get (in fact, I often shop online at places like Lowe’s that charge local sales tax to get things I can’t get locally in the store). I shop online to get more selection and better prices – before tax. Not to mention the convenience of shopping in my pajamas from my couch if I want, and easily comparing multiple stores in only a few minutes.

  2. Marissa says:

    …and free shipping on orders was raised from $25 to $35 an order. Still not bad.

  3. Florida Native. says:

    Congrats to Lakeland and Ruskin for landing Amazon distribution centers. It will bolster their economy and put people to work unlike Plam Coast which DOESN’T welcome new business,isn’t business friendly and is anti-business. Of course the red light cameras are bringing in money but that’s just a scam. A big distribution center employee’s hundreds and pays a huge amount of taxes. If Publix,Wal-Mart, and Target were to pull out of Palm Coast today you could bulldoze this clap trap to the ground. Come election time lets elect responsible leaders that will welcome new business and not discourage growth and make getting building permits virtually impossible. Great job and again congrats Lakeland and Ruskin.

  4. Lt. Dan says:

    If I get taxed for ANYTHING else this year, I can claim POVERTY when tax time rolls around !

  5. neverwas says:

    I remember a couple years back when amazon was looking to build here in Palm Coast. Read about it once or twice and then it never happened. I guess our city leaders did not want to make a deal. Its a shame, it would of lowered our unemployed to a single digit, first time in many years and more to come.

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