Florida Enacts Remote Seller Nexus and Marketplace Provider Laws
On April 19, 2021, Florida joined a growing number of states in enacting legislation imposing sales and use tax collection obligations on remote sellers lacking a physical presence in the state and requiring so-called marketplace providers to collect and remit sales and use tax with respect to taxable sales that they facilitate through a marketplace. S.B. 50, 2021 Leg., 2021 Sess. (Fla. 2021). According to the Florida Senate’s fiscal note, Florida becomes the 44th state (plus the District of Columbia) to enact a remote seller nexus law and 39th state (plus the District of Columbia) to enact a marketplace provider/facilitator law. Fla. S., B. Analysis and Fiscal Impact Statement, S.B. 50, 2021 Leg., 2021 Sess. at 6 (2021). Of the states imposing sales and use tax, Missouri remains the only holdout in enacting a remote seller nexus law, though legislation is currently pending in Missouri on this issue. See H.B. 554, 101st Gen. Assemb., 1st Reg. Sess. (Mo. 2021).
Remote seller nexus laws like Florida’s come in the wake of the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc., 138 S. Ct. 2080 (2018), holding that physical presence was not a constitutional requirement for states to impose sales and use tax collection obligations on remote sellers. Taxpayers will nonetheless be wise to remember that while the Wayfair Court indicated that state nexus statutes will not be struck down as unconstitutional for lack of a physical presence requirement, these statues remain susceptible to constitutional challenges on other grounds (e.g., the statute discriminates against or places an undue burden on interstate commerce). Wayfair, 138 S. Ct. at 2099.
The new Florida law imposes sales and use tax collection obligations on all persons making “a substantial number of remote sales” in Florida, which is defined as “any number of taxable remote sales in the previous calendar year in which the sum of the sales prices. . . exceeded $100,000.” S.B. 50, 2021 Leg., 2021 Sess. at ln. 591-594 (Fla. 2021). The law further requires that marketplace providers with a taxable presence in Florida certify to marketplace sellers that they will collect and remit sales or use tax due on the marketplace seller’s sales. A “marketplace” is defined as “[a] physical place or electronic medium through which tangible personal property is offered for sale” and a “marketplace provider” is a person who facilitates sales by a marketplace seller by listing or advertising the sale in a marketplace and who collects payment from the customer and transmits all or part of the payment to the marketplace seller. Fla. S., B. Analysis and Fiscal Impact Statement, S.B. 50, 2021 Leg., 2021 Sess. at 6 (2021).
Florida’s law changes apply beginning with sales made or facilitated on or after July 1, 2021. The law changes will not apply retroactively to sales made or facilitated prior to July 1, 2021, provided that any person to whom the changes apply registers with the Department before October 1, 2021.
This article is one in a series of articles written for the May 2021 edition of The BR State + Local Tax Spotlight.