Melanie from Affiliate Advocacy just posted the following on her blog:

Internet sales tax talk is already gaining momentum in several states. In Florida, Senator Nancy Detert has announced that she is continuing to research requiring merchants to collect sales tax on online sales. It appears likely that legislation will be introduced in Florida during the upcoming legislative session.

Brick and mortar stores in Florida embrace her decision to tax online purchases but there is additional support coming from other groups and organizations. Florida, like most states, is facing a substantial budget deficit. Many school boards believe that the increased sales tax revenue will increase the funds for education. Estimates in Florida are that Internet sales tax will result in revenue of nearly $2 billion annually.

Legislators believe that taxing online sales is only fair and levels the playing field with local stores which are required to collect sales tax. Florida, like most states, has a sales and use tax. If sales tax is not collected at time of purchase, Florida residents are required to pay the sales tax direct to revenue department and it is then called a use tax. The main problem with use tax is that many are unaware of it. As a result, as online shopping increases, sales tax revenue decreases.

Affiliates in Florida should immediately reach out to their Senators and Representatives. Request to meet with them to explain the impact on your business of Internet sales tax legislation. Educate them as to how your business operates. In addition, ask that they push for Federal legislation on this issue. Sales tax on online purchases must be addressed on a Federal level if we wish to really level the playing field. Last year a few states did send notice to both the President and Congress requesting action on a Federal level. Merchants in all states should also push for Federal action.

Currently, New York, North Carolina and Rhode Island all have laws that specifically require out of state merchants to collect sales tax if certain thresholds are met. Many other states also have existing legislation the may require out of state merchants to collect sales tax. It is important for merchants to understand the nexus definitions in each state and seek counsel to ensure they are in compliance.

Affiliates in Florida and other states should prepare for pending legislation that will clearly require out of state merchants to collect sales tax. The 2010 legislative session will keep us busy as several states have announced that they will introduce legislation. Affiliate Advocacy will continue to monitor the activity.

To learn more, go to the Affiliate Advocacy blog.

Roger Snow