There has been much discussion of late about online sales tax, the Marketplace and Main Street Fairness Acts, and Streamlined Sales Tax. Folks who pay attention to the news may now realize that, in many states, internet purchases that are not charged sales tax are probably subject to consumer use tax. Even so, a number of state departments of revenue are assuming ignorance and are reminding residents to pay use tax on remote purchases if it is due. The California Board of Equalization issued a news release on the subject last month. Now it’s the Florida DOR’s turn.
Under “Current Topics” on the home page of the Florida Department of Revenue website is this headline: Shopping Online? Make Sure You Pay Tax. Follow the link and land on an explanation page that details which purchases are subject to Florida use tax. It begins with, “Most Florida citizens are not aware that this state has a ‘use tax.’ Use tax normally applies to items purchased outside Florida, including another country, which are brought or delivered into this state and would have been taxed if purchased in Florida.”
The DOR lists the following examples of purchases that are subject to Florida use tax, which, like the Florida sales tax, is 6%:
“Purchases made through the Internet;
Mail-order catalogue purchases;
Purchases made in another country;
Furniture purchased from dealers located in another state;
Computer equipment ordered from out-of-state vendors advertising in magazines.”
There are a few exceptions to the rule, notably items purchased in another area of the United States and used “for 6 months or longer before bringing them into Florida… .” This exception does not apply to purchases made in another country: “You cannot use any sales tax paid in another country as a credit against the Florida tax due.”
But I Already Paid Sales Tax in Another State
You may argue that you don’t owe Florida use tax if you paid a different state’s sales tax at the time of purchase. That’s true if you make a purchase in a state or area that has a sales tax of at least 6%, such as Washington State (6.5%) or the District of Columbia (6%). However, were you to purchase an item in Georgia and pay only the Georgia base state sales tax rate of 4%, you would owe the difference between 4% and the Florida sales tax rate of 6%; Florida’s Department of Revenue would expect a use tax payment of 2% on that purchase.
Florida takes their use tax to heart a bit more than some other states. California, for example, expects residents to pay use tax on non-exempt purchases when sales tax has not been paid to out-of-state retailer. Florida wants to collect any amount of tax under the 6% it charges.
Florida use tax is due quarterly. Individuals are expected to file and pay use tax online or submit a check and completed Form DR-15MO.
Florida businesses are expected in include use tax on “their sales and use tax returns.” The DOR reminds that “failure to voluntarily comply with Florida sales and use tax laws subjects you to certain penalties.”