Florida Enacts Economic Nexus and Marketplace Legislation

On April 19, 2021, Florida’s governor signed S.B. 50 into law, making Florida one of the last states to adopt economic nexus and marketplace facilitator rules for sales tax purposes since the landmark U.S. Supreme Court decision in South Dakota v. Wayfair. Under Wayfair, the court held that physical presence is not required for states to assert nexus on out-of-state businesses, paving the way for states to impose sales tax collection obligations on remote sellers whose sales exceed a monetary or transaction threshold (e.g., $100,000 in sales). Like many other states, Florida has created a relatively low seller exemption threshold for remote sellers of $100,000 in sales without implementing a transactional limit (e.g., 200 transactions in the previous calendar year). Following the enactment of S.B. 50, Missouri is the only state without economic nexus or marketplace facilitator rules.
The law is effective July 1, 2021. However, certain persons may be eligible for relief on remote sales made before July 1, 2021 if they register with the Florida Department of Revenue by October 1, 2021.


Economic Nexus Threshold

Beginning July 1, 2021, out-of-state retailers (i.e., remote sellers) and marketplace providers (i.e.,  marketplace facilitators) with over $100,000 taxable “remote sales” to a Florida purchaser in the previous calendar year are considered “dealers” in Florida, with a requirement to register, collect and remit sales tax. If the $100,000 threshold is exceeded, all remote sales are considered “substantial.”
While many states define a remote seller or an out-of-state retailer within their economic nexus and marketplace facilitator laws, Florida is one of the only states to specifically define remote sales. The term “remote sales” means retail sales of tangible personal property ordered by mail, telephone, the internet or other means of communication from a person who receives the order outside of Florida and transports the property or causes the property to be transported from any jurisdiction, including Florida, to a location in the state.
This new law first applies to “remote sales” made or facilitated on or after July 1, 2021 by a person who made or facilitated a “substantial number of remote sales” in calendar year 2020. A marketplace seller (i.e., a remote seller that sells through a marketplace facilitator) only considers those sales made outside of a marketplace (i.e., direct sales) to determine whether it made a substantial number of sales in calendar year 2020.


Marketplace Facilitator Provisions

 While Florida’s definition of “marketplace provider” is fairly standard, the bill specifically excludes certain persons. For example, the term does not include a person who solely provides travel agency services, certain delivery network companies or certain payment processors whose sole activity with respect to the marketplace sales is to process payments. Marketplace providers subject to Florida tax must certify to their marketplace sellers that they will collect and remit the tax on taxable retail sales made through the marketplace.
A marketplace seller does not collect and remit sales tax on a taxable retail sale when the sale is made through the marketplace and the marketplace provider certifies that it will collect and remit such tax. As is common in many other states, marketplace sellers that are considered “dealers” in Florida are required to register, charge and collect tax on all taxable retail sales made outside of the marketplace.
Effective April 1, 2022, a marketplace provider and marketplace seller can contractually agree to have the marketplace seller collect and remit all applicable taxes and fees, if the marketplace seller has annual U.S. gross sales of more than $1 billion, provides evidence to the marketplace provider that it is registered and notifies the department.
Also effective April 1, 2022, additional taxes and fees are required to be collected by marketplace providers. Marketplace providers are required, at the time of sale, to collect other fees such as the prepaid wireless E911 fee, waste tire fee and lead-acid battery fee on any sales that it facilitates or makes itself.
For a marketplace provider under audit, the department may not examine the records or assess tax to the marketplace seller on retail sales facilitated though the marketplace. However, the marketplace provider may be relieved of liability in certain situations where the marketplace provider made a reasonable effort to obtain accurate information from marketplace seller regarding the sales facilitated through the marketplace, but the failure was that of the marketplace seller providing incorrect or incomplete information. The relief provision does not apply if the marketplace provider and the marketplace seller are related parties. The marketplace provider has the right to recover tax, interest and penalties from the marketplace seller. Finally, Florida is not authorized to collect sales tax from both the marketplace provider and the marketplace seller on the same retail sale.



For a person subject to Florida sales tax, the bill provides relief of liability for tax, penalties and interest on “remote sales” that occurred before July 1, 2021 if the person registers with the department before October 1, 2021. The bill also provides relief to a marketplace seller for “remote sales” made before July 1, 2021 that were facilitated by a marketplace provider. Finally, the bill provides relief to a marketplace provider with physical presence in Florida, but only for sales facilitated by the marketplace provider on behalf of the marketplace seller.
The bill specifies that the department may not use data received from registered marketplace providers or persons making “remote sales” for the purposes of identifying use tax liabilities occurring before July 1, 2021, from unregistered persons who but for their purchases from the registered taxpayer would not be required to remit sales or use tax directly to the department.
The relief provisions do not apply to a person who is under audit; has been issued a bill, notice, or demand of payment; or is under administrative or judicial proceeding as of July 1, 2021.


County Surtax

The bill requires out-of-state retailers and marketplace providers to collect the Florida county surtax when a taxable item is delivered into a county that imposes a surtax.