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Florida Enacts Economic Nexus Law

The state will require out-of-state sellers to collect sales tax on tangible personal property

Following the South Dakota v. Wayfair et al. U.S. Supreme Court case in June 2018, many states rushed to enact economic nexus statutes, requiring out-of-state sellers to collect sales tax if the annual sales the seller delivered in-state exceeded a specified threshold. Florida was a notable holdout and, through the end of 2020, still hadn’t issued any official guidance requiring out-of-state sellers to collect Florida sales tax on the basis of economic nexus.

In April 2021, this changed. Florida has now enacted an economic nexus law, slated to take effect on July 1, 2021.

The law will require out-of-state sellers to collect sales tax on sales of tangible personal property delivered into Florida if the seller made sales in excess of $100,000 during the preceding calendar year.

Because this economic nexus test looks back to the 2020 calendar year to determine whether or not a remote seller has nexus, many remote sellers will be considered under Florida’s new law to have economic nexus as of July 1, 2021. We therefore recommend that any sellers who may be affected begin considering now whether or not they will need to register in Florida to collect and remit Florida sales tax beginning on July 1, 2021.

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