Florida, long a holdout, has become the newest state to enact economic nexus legislation. The new law goes into effect on July 1, 2021 and this post details everything you need to know as an e-commerce business making sales into Florida about this major sales tax change.
What is economic nexus in Florida?
With the 2018 South Dakota v. Wayfair Supreme Court ruling in favor of South Dakota, states are now free to pursue sales tax from e-commerce businesses who have a “significant presence” in their state.
Significant presence or “nexus” was previously defined as having a physical presence (ex: brick and mortar store, employee, or inventory in a fulfillment center like FBA). But with the Wayfair Supreme Court ruling, now this definition has been expanded to include economic activity in a state as well. This concept of triggering sales tax responsibility because of your economic activity in a state is now referred to as economic nexus.
Most important, this now means that if you pass a state’s economic threshold for total revenue in that state and/or number of sales transactions to buyers in that state, you’re now legally required to register, collect and remit sales tax for that state.
What’s the threshold for economic nexus law in Florida?
- State: Florida
- Threshold: $100,000 in revenue from buyers in the state in the previous calendar year (excluding marketplace sales for individual sellers)
- Summary: According to the state, sellers that meet both the state’s sales threshold are required to register for a Florida sales tax permit, collect sales tax on sales that ship into Florida, and remit sales tax to the state.
- Full text: You can read the text of the Florida economic nexus law here.
When did this Florida law go into effect or is it planned?
The law became effective on July 1, 2021.
Remote sellers that meet the economic nexus threshold are relieved of tax liability, penalties and interest as long as they register for a Florida sales tax permit by September 30, 2021.
I meet the economic threshold requirement in Florida. Now what?
Here’s a quick checklist of what to do next:
- Register for a sales tax permit in Florida (info below)
- Choose a technology like TaxJar to help you manage multi-state compliance. Sign up for a free 30-day trial to see how we can help you save time!
- Connect TaxJar once to all of the places you sell
- Ensure all your e-commerce channels are setup correctly to collect sales tax
- Enroll in AutoFile and tell us how often you need to file
- Relax, you now handled your sales tax exposure. We’ll handle the rest for you.
Can you help me register for a sales tax permit?
Certainly! TaxJar offers these two options:
- Read our do it yourself instructions for every state
- Visit TaxJar.com/register to have one of our expert partners do it for you (~$100 each state not including state’s fees)
Who can handle my Florida sales tax filings for me?
At TaxJar, we help more than 20,000 e-commerce businesses manage their sales tax needs every month. We help your business save on submitting your returns with our automated filing service called AutoFile. Read more about how AutoFile can handle all of your returns in as many states as you’d like.
I’ve met this threshold in Florida, now where can I ask questions?
We recommend speaking with a vetted sales tax expert to answer specific questions for your business.
And finally…I’m close to meeting this threshold for Florida. Will TaxJar notify me when I reach it?
Yes! With TaxJar’s Economic Nexus Insights Dashboard, you can see where your business currently has nexus, where your business is approaching nexus, and recommended next steps on how to begin complying with sales tax in all states.
Proactive notifications let you know when you’re approaching or have reached thresholds, so you can stay in front of any changes to your nexus requirements.