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SALT Alert: Florida Adopts Economic Nexus Rules For Sales And Use Taxes



SALT Alert: Florida Adopts Economic Nexus Rules For Sales And Use Taxes

On April 8, 2021, the Florida legislature passed economic nexus and marketplace facilitator legislation, which the governor has indicated that he will sign the bill into law. Florida’s economic nexus law becomes effective July 1, 2021. If you are selling to customers in Florida, then you must be aware of the new nexus standards in Florida.

Highlights of the law are as follows:

  • The threshold of economic nexus will be $100,000 of sales during the previous calendar year (with 2020 as the initial threshold year).  The law DOES NOT adopt a transaction threshold.
  • The law applies to sales made after July 1, 2021. However, to determine whether a seller has met the threshold on July 1, 2021, the seller’s non-marketplace sales during 2020 are compared against the $100,000 threshold.
  • Sales made through and taxed by a Marketplace Provider do not count towards the $100,000 economic nexus threshold and should not be reported as sales by the remote seller.
  • A “Marketplace Provider” is subject to the sales tax collection and remittance requirements imposed on dealers in Florida.
  • A Marketplace Provider is defined:

as a person who facilitates a retail sale by a marketplace seller by listing or advertising for sale by the marketplace seller tangible personal property in a marketplace, and who directly, or indirectly through agreements or arrangements with third parties, collects payment from the customer and transmits the payment to the marketplace seller, regardless of whether the marketplace provider receives compensation or other consideration in exchange for its services.

Nexus laws and rules are complex and vary from state to state.  Taxpayers with prior-year nexus concerns may be candidates for the voluntary disclosure process.

 

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