Florida reverses course and reaches deal with Amazon
Published: Thursday, June 13, 2013 at 4:44 p.m.
Last Modified: Thursday, June 13, 2013 at 4:44 p.m.
TALLAHASSSEE — Floridians will have to start paying sales taxes sometime next year on anything they purchase through Internet retailer Amazon.com.
Gov. Rick Scott, who just a few weeks ago had rejected a deal with the Seattle-based company, announced Thursday that the company has now pledged to come to the state. The move will mean thousands of jobs and more than $300 million spent on new warehouses between now and 2016.
"Amazon's commitment to create more than 3,000 new jobs in Florida is further proof that we've turned our economy around," said Scott in a statement.
But Amazon's decision to finally bring warehouses to the state also means that the retailer will be required to start charging its Florida-based customers the state's 6 percent sales tax.
There was no firm timeline on when that would be in Scott's announcement. Scott's office said that Amazon would begin collecting state sales taxes from residents at the time it is required under state law.
Currently, Floridians are supposed to pay taxes for online purchases, but there's no way to enforce the law. The state can't force companies like Amazon to collect the tax unless it has a physical presence such as a warehouse or store.
Amazon is expected to construct two sets of two warehouses in Florida over the next 24 months, but the first pair of warehouses will likely be finished sometime next year. Thursday's announcement did not include any details on a likely site for the warehouses.
The governor, who has made job creation a top priority, said Thursday that Amazon would work with the state's economic development agency as it "chooses locations" for its warehouses. He left open the possibility that Amazon could wind up getting incentives from the state before it begins construction.
Amazon's decision to come to Florida isn't unexpected given the retailer's desire to put in a system to guarantee quicker delivery of products ordered online. The company has reached similar agreements regarding warehouses and payment of sales taxes in several other states.
The governor had previously said no to a deal to bring Amazon to the state. He had expressed concerns that signing off on such a deal would result in tax increases for Floridians.
"Based on the opportunity I had at the time, it didn't make sense," Scott said just last month during a stop at a Tampa manufacturing plant. "I haven't seen something I think is good for Florida taxpayers."
There was no clear indication what prompted Scott to change his mind. But the governor has been lobbied on the deal by high-profile lobbyists such as Brian Ballard. Ballard is a well-known fundraiser for Republicans in the state.
The state's legislative leaders — who have been pushed the last several years by the state's business groups to pass bills to force online merchants to collect sales taxes — praised Scott for reaching a deal with Amazon.
"Bringing Amazon to Florida will provide a tremendous boost to our economy," said House Speaker Will Weatherford, R-Wesley Chapel, in a statement.
The deal with Amazon comes at a time Congress has been debating whether to allow states to collect sales taxes on Internet purchases their residents make with out-of-state companies. The measure passed the U.S. Senate but it has encountered resistance in the U.S. House.
When Amazon representatives made their first pitch to Scott and legislative leaders back in early 2012 the proposal drew sharp opposition from retailers because it called for exempting the retailer from sales taxes for two years.
Some groups such as the Florida Retail Federation, however, dropped their opposition to the last proposal that had been floated a few months ago. A spokesman for the organization said the group could not comment on the final deal because they were unaware of the details.