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Simpson, Sprowls announce plan to prevent tax hikes, replenish unemployment fund

by | Mar 10, 2021

Facing budget shortfalls due to COVID-19, GOP leadership announced a plan on Wednesday to help Florida businesses and its workers recover from the pandemic.

Florida Senate President Wilton Simpson and House Speaker Chris Sprowls made the announcement in a press release, stating the plan would help rescue Florida businesses from looming tax increases and level the playing field on online sales tax collections and the $713 million unemployment tax increase facing job creators. Their plan would ensure that $1 billion of uncollected sales tax from out-of-state retailers would be collected and deposited into Florida’s Unemployment Compensation Trust Fund annually until it is replenished to pre-pandemic levels.

Simpson says the plan would help reduce the burden placed on the backs of Florida businesses and give them a lifeline to survive the challenges brought forth by the virus.

“Under the law, online purchases are not tax-free. Every time government turns a blind eye on collecting taxes, we put a greater burden on the businesses and Floridians who are following the law. Making sure we are collecting existing taxes that are owed is the right thing to do,” said Simpson. “Rather than treating additional revenue that is already owed to the state as a windfall for the spending priorities of the day, the prudent thing to do is to reinvest these funds in our Unemployment Compensation Trust Fund, helping businesses survive a situation no one could have anticipated, and shoring up benefits for the struggling Floridians who have lost their jobs as a result of this pandemic.”

Sprowls agreed, saying beefing up the trust fund would prevent an automatic increase in unemployment (reemployment assistance) taxes facing businesses, and ensure that the fund remains solvent for employees when they need to claim their benefits.

“Our plan makes responsible use of the resources we have so that we can rescue Florida business owners from a major tax increase. Florida businesses must be able to retain and hire employees and contribute to our recovering economy. They can’t do that if they’re facing substantial tax hikes that, in some cases, would amount to a 700% increase in four years over what they would pay in Florida unemployment (reemployment) taxes under this plan,” said Speaker Sprowls. “This fiscally responsible legislation will cut taxes for our business owners, ensure that Florida’s small businesses and retailers with a physical presence in our state are competitive, and keep us the most business-friendly state in the nation.”

Proposals (SB 50/HB 15) pushed by State Senator Joe Gruters and State Representative Chuck Clemons seek to balance the scale between entities — both brick and mortar and online — while promoting a fair climate for those doing business in Florida. Their legislation would require out-of-state retailers and marketplace providers with no physical presence in Florida to collect Florida’s sales tax on sales of taxable items delivered to purchasers in Florida if the out-of-state retailer or marketplace provider makes a substantial number of sales into Florida.

“Businesses with brick and mortar stores are already acting in good faith and accordance with the law by collecting sales tax for online purchases at the point of sale. Unfortunately, right now, Florida-based, brick and mortar businesses are at a disadvantage because they collect sales tax, and their out-of-state competition does not,” said Gruters. “Sales tax is money already owed to the state, and collecting it is the right thing to do. Investing this revenue in our Unemployment Compensation Trust Fund alleviates a huge and unexpected burden on Florida business, while also making certain that unemployment compensation benefits are available when Floridians need them.”

Following the announcement, the Florida Chamber of Commerce applauded the plan, saying it would help those in Florida navigate the pandemic.

“Today’s welcome announcement benefits Florida’s main street businesses by leveling the playing field on sales tax collections, while at the same time providing much-needed relief from a looming $713 million tax increase on employers,” said Florida Chamber of Commerce President and CEO Mark Wilson. “The Florida Chamber of Commerce and job creators across our state applaud the leadership of President Simpson and Speaker Sprowls to protect Florida businesses and accelerate the recovery of Florida’s economy from the pandemic-driven recession.”

A recent Revenue Estimating Conference comprised of professional staff representatives of the Senate, House, Governor’s Office, and the Legislature’s Office of Economic and Demographic Research determined the bills could result in the collection of an additional $973.6 million in Fiscal Year 2021-2022 and by $1.08 billion each year thereafter.

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