Florida legislation that would have expanded the definition of a “mail order sale” has died in the Florida House Appropriations Committee. The legislation attempted to specifically include “Internet” sales within Florida’s definition of “mail order sales.” It also sought to impose a sales-tax collection and remittance obligation on out-of-state vendors that enter into agreements where a person within Florida directly or indirectly refers customers for a commission or other type of payment.
Imposing a collection and remittance obligation on an out-of-state Internet vendor in the manner described above is commonly referred to as “click-through nexus” or “affiliate nexus.” The tax usually applies to sales that originate from links placed on the websites of independent partners that have physical presence nexus within the taxing jurisdiction. The obligation is imposed on the out-of-state vendor even though the vendor does not have a physical presence within the taxing jurisdiction.
New York was one of the first states to use this type of nexus. California, Colorado, Georgia, and Illinois are examples of states that have click-through nexus statutes or rules. It has become a popular strategy for states wishing to increase their revenue.
The views expressed in this article are those of the authors and do not necessarily reflect the position or policy of Berkeley Research Group, LLC.
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