Snowbirds aren’t the only ones flocking to Florida this February. The E- commerce nexus battle has apparently also flown the coup to the Sunshine State. As of last week, there were four pieces of legislation—two in the Senate; two in the House—concerning affiliate nexus in Florida. The two Senate bills—SB 1514 and SB 2098—came up for action last week; SB 2098 was allowed an introduction in the Senate Finance and Tourism Committee and SB 1514—sponsored by Sen. Nancy Detert (R)—passed favorably out of the Senate Finance and Tourism Committee. While affiliate nexus is not presently the law in Florida, the introduction of SB 2098 and the passage of SB 1514 could be a harbinger of what may soon be the law in the state.
What Does SB 1514 Say?
For sales tax purposes, SB 1514 includes Internet sales in the state’s definition of mail order sales. The bill further provides that those dealers (read: remote sellers) making mail order sales into the state, will have nexus for sales tax purpose if they have: (a) substantial nexus (physical presence; ownership of tangible personal property or real property); or (b) an agreement with an agent or representative in Florida who, for commission or other consideration, directly or indirectly refers potential customers—by link on a website, an in-person ‘sales pitch’, telemarketing, or “otherwise.”
The bill contains two notable provisos: a rebuttable presumption to the preceding nexus elements and a so-called ‘small seller’ exception. The former provides that the rebuttable presumption of nexus may be defeated through proof that a Florida affiliate did not engage in any activity that was significantly associated with a remote seller’s ability to establish or maintain a market for sales in the state. This proof may come through sworn affidavits from affiliates that they did not engage in solicitation on behalf of the remote seller in Florida. The smaller seller exception would preclude the law’s effect on those sellers who have less than $10,000.00 in gross sales during a preceding 12-month period.
What About the Other Bills?
In addition to the passage out of Committee for SB 1514, the Committee allowed the introduction of SB 2098. The bill, which was championed by Senator Evelyn Lynn (R), would expand the definition of “physical nexus” and “affiliate nexus” to include online-only sellers, such as Amazon. Notably, SB 2098 contains a provision that would render it revenue-neutral. The bill is set to be voted out of committee at an upcoming meeting.
In addition to SB 2098 and SB 1514, Representative Mike Horner (R) has filed HB 861 in the Florida House to address online sales tax, and Representative Greg Steube has filed the fourth ecommerce bill, HB 1085.
2012 – The Year of Affiliate Nexus?
Florida is just the latest jurisdiction to enter this year’s crop of states looking at affiliate nexus. To date, since the start of 2012, click-through legislation has been introduced in the following states: Florida (four separate bills), Hawaii, Indiana, Maryland, Minnesota, Missouri, and Vermont.