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Florida issues Emergency Rules Regarding Remote Sales and Marketplace Providers

Published: July 6th, 2021

By: Mark E. Holcomb H. French Brown, IV

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Florida’s new remote seller and marketplace provider law went into effect July 1, 2021. Chapter 2021-2, Laws of Florida, imposes sales tax on “remote sales” and requires tax collection by sellers lacking a physical presence in Florida. The new law excludes small businesses from these requirements unless they make a “substantial number of remote sales,” defined as retail sales for delivery into Florida exceeding an aggregate of $100,000 in the previous calendar year. In addition, the new law extends these sales tax collection responsibilities to marketplace providers that facilitate and collect payment for sales made by remote sellers utilizing their platforms. We previously discussed more details of the new law here

To implement this new law, the Florida Department of Revenue has recently issued several emergency rules, effective July 1st. Emergency Rule 12AER21-13 is the main emergency rule providing the statutory definitions of remote sale, remote seller, marketplace seller, and marketplace provider. Additional guidance is also provided in other emergency rules regarding registration, return filing and tax payment requirements.

 

Registration

These emergency rules require remote sellers and marketplace providers conducting a substantial number of remote sales to register with the Florida Department of Revenue electronically using the new Florida Business Tax Application for Marketplace Providers and Remote Sales, Form DR-1MP, effective July 2021, available on the Department’s website at floridarevenue.com/taxes/registration. See Emergency Rule 12AER21-9.

A separate application is required for each place of business in Florida. Each marketplace is deemed a separate place of business. Out-of-state businesses can submit one application for all out-of-state locations.

 

Returns & Remittance

The Emergency Rules also provide that registered marketplace providers and remote sellers must timely file Florida sales and use tax returns and remit sales and discretionary sales surtaxes to the Department electronically. Sales and use tax returns are generally due monthly; however, the Department may allow less frequent filing if the taxpayer remitted less than $1,000 in tax during the preceding four calendar quarters.  See Paragraphs 212.11(1)(c) & (d), Fla. Stat. Additionally, registered dealers must file and remit estimated taxes if the amount of tax paid during the preceding July 1 – June 30 is greater than or equal to $200,000.  See Paragraphs 212.11(1)(a) & (4), Fla. Stat.

 

Conclusion

Affected marketplace providers and remote sellers should review the Department’s emergency rules to ensure compliance with Florida’s new remote sales tax laws. Dean Mead’s State and Local Tax Team is prepared to assist you with these and other state and local tax needs.

 

About the Authors:

French Brown, IV focuses on state and local taxation, governmental relations and lobbying, and administrative law. He began his legal career at the Florida Department of Revenue, where he quickly rose to the position of Deputy Director of Technical Assistance and Dispute Resolution. Mr. Brown also assists businesses with Florida tax planning and controversies. He may be reached at fbrown@deanmead.com.

Mark E. Holcomb has over 35 years of experience practicing in state and local taxation. He represents clients before the Florida Department of Revenue and local taxing authorities, and in litigation at the trial and appellate levels. Mr. Holcomb advises clients on a broad range of state and local taxes, including corporate income and franchise tax, sales and use tax, documentary stamp tax, communication services tax, insurance premium tax, ad valorem tax and motor fuels tax, in tax controversy work and in planning opportunities. He may be reached at mholcomb@deanmead.com.