EDITORIAL: Use sales taxes for jobs, children

It’s time for state leaders to do something about online retailers, many of them out of state that fail to remit sales taxes on Internet purchases.

This produces unfair advantages to out-of-state businesses that have little stake in the state, while placing an additional burden on a state budget that is under stress.

The Florida Center for Fiscal and Economic Policy lays out many of the advantages that have been preached by Florida TaxWatch in recent years.

A TaxWatch study in 2009 estimated that over 112,000 jobs were lost for the $11.2 billion e-commerce sales in 2008, which means a little over 10,000 lost jobs for every $1 billion worth of online shopping.

State and local governments are losing about $250 million a year in sales tax revenue not collected from online sales, the center reported. That’s the low estimate. The high estimate is $800 million.

Meanwhile, online retailers enjoy more than a 6 percent price advantage in state and local sales taxes.

This trend is only continuing as more Americans use online sales, now at 7 percent of all sales nationally.

An additional problem for Florida is its unbalanced reliance on sales taxes to fund state government.

Other states have used strategies to collect online sales taxes. Attempts to force online retailers to pay sales taxes have been called “Amazon laws,” a reference to the popular online retailer.

In response, Amazon has used a dual strategy: fight the taxes in court or offer to hire workers and build facilities instead of passing along the taxes.

A total of 35 states have entered into agreements to collect online sales taxes in 2002, with it being fully operational in 24 of them. The best solution would be a national one. A bill in the Senate would authorize states that have adopted the streamlined sales tax agreement to require online sellers doing more than $500,000 in annual sales to collect the tax on remote sales.

Another idea is to cut other taxes and fees elsewhere in the state in return for collecting the online taxes. The idea here is this amounts to a new tax simply because it had not been collected.

If Florida’s tax system were not so unbalanced, and if valid needs were being met, the revenue neutral idea would make more sense.

But Florida’s taxation system was described by the Florida Center for Fiscal and Economic Policy as “antiquated, inadequate and unfair.”

Florida’s reliance on the sales tax means it has the second-worst tax structure in the nation when assessed for fairness. About 83 percent of the state’s revenue is collected from various sales taxes, which hit the poor hardest.

Florida officials ought to take action to begin collecting the online sales tax and then devote the increased revenue to clear priorities that produce jobs, support the state’s future through its children and result in a fairer tax system.

Here are a few ideas for the revenue that this page has often supported:

Hope, future, kids

Florida’s kids are not being sufficiently supported either through the Voluntary pre-Kindergarten program, through state funding of Medicaid and through ridiculously low reimbursement of dental care through Medicaid.

An investment in children produces major benefits later in life, to the child, the family and the state. Florida should not be racing to the bottom in funding children’s programs.

Jobs and trust funds

Florida has routinely raided trust funds for the general fund, even funds that are directly connected to job creation.

One trust fund that has wide support and a track record of success is the Sadowski fund for affordable housing. Its private-public partnership model has worked well. The hard-hit housing sector could desperately use the boost from a fund that was designed for it.

Let the sales tax from online retailers go to the general revenue fund where it belongs and put the trust back into trust funds.

Another is a transportation trust fund that would produce immediate impacts for a state with a growing backlog of road and bridge needs. Local companies have been struggling to stay afloat while trust funds for road building have been diverted from their original intentions.

Let’s collect the taxes that are already owed in the state and invest in the state’s future and creating jobs.

The state’s economy is struggling for air. We need to provide a lifeline. It’s no time for lectures to suck it up.