Let Us Compete
By Lary Sinewitz | BrandsMart USA
Over the past 38 years, I’ve witnessed firsthand how the internet has changed the retail ecosystem. We’ve adapted to an industry which has transformed significantly, forcing us to contend with brick-and-mortar and online retailers around this country and the world. In terms of competition, I ask nothing more than the ability to do so on a level playing field. However, as e-commerce boomed, a glaring disparity positioned my business and other Florida retailers at a significant disadvantage to online and out-of-state competitors. Our state now has the opportunity to eliminate a legal loophole that will ensure fair competition and support Florida-based businesses, jobs and communities.
Last year, the U.S. Supreme Court’s ruling in South Dakota v. Wayfair reversed a decades-old decision permitting out-of-state retailers to evade the collection of sales tax when shipping goods into states where the retailer had no presence. Upon this reversal, most states immediately amended their sales tax rules which subsequently forced out-of-state retailers to collect sales taxes. Florida is now the largest state that has failed to make this modification.
We believe BrandsMart USA offers the lowest prices possible, but currently we are burdened with 6 to 8 percent tax that out-of-state retailers do not collect. We have thus far been hindered by a loss in profit dollars which affects all areas of our company, from expansion to employee compensation. Even more devastating, these out-of-state retailers offer nothing by way of support towards our state infrastructure.
The U.S. Supreme Court passed the responsibility directly on states to enact laws ending this disparity and our leaders in the state Capitol should waste no time in ending this unfair and unwise practice. More than 30 states have already adopted legislation requiring remote sellers to pay sales taxes, including many of our southern neighbors. We must do the same.
Florida law already addresses remote sales, so adopting comprehensive sales tax legislation would not result in a new state tax or tax increase. In fact, these taxes have always been due, but the duty falls on the consumer, who rarely reports it. This is about modernizing our tax code which has already designed the basic structure. This would streamline our system and bolster our position as one of the most business-friendly states in the country.
The importance of closing this loophole cannot be underemphasized. Its presence negatively impacts in-state businesses as well as our communities. The retail environment has evolved and so must the laws that govern it. Florida should be a place where free markets reign and businesses thrive. Implementing e-fairness should be the first step in creating that reality.
Lary Sinewitz is the Executive Vice President of BrandsMart USA.