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Disappointing Holiday Sales

January 2nd, 2013 by flanews

It looks like holiday sales will fall desperately short of the robust 5.2 percent increase predicted by Florida retailers. According to a MasterCard Advisors Spending Pulse report, sales rose a meager .7 percent nationwide in the two months leading up to Christmas. As Whitney Ray tells us, the sluggish sales will have an impact on the state budget which relies heavily on sales tax dollars to fund the public sector.

After four straight years of slow holiday sales, the Florida Retail Federation foreshadowed a turnaround in 2012.

The federation expected a 5.2 percent increase, but a new report shows a sluggish .7 percent increase in holiday sales nationwide. Florida should do slightly better, but we won’t know for months.

“Holiday sales are an important part of retail, and retail is an important part of the state fiscal picture,” said Rob Weissert, VP of Research at Florida TaxWatch.

Weissert says a slow holiday shopping season will impact the state budget.

“Florida relies heavily on sales tax for funding general revenue and the operations of the government,” said Weissert.

That means everything, from teachers to the people fighting wildfires, depends on you shopping.

About three quarters of every dollar in the state’s general revenue fund comes from sales taxes.

Although the impact of the disappointing holiday shopping season won’t be known here at the state capitol for months, it comes amid a predicted 400 million dollar budget surplus.

“There is a predicted budget surplus, but again those predictions tend to change,” said Weissert.

State economists will meet again before the 2013 legislative session in March and their estimates, including the holiday shopping figures, will have an impact on what lawmakers decide to fund.

Besides the impact the lackluster holiday shopping season will have on the state budget, it could also affect the job market. Many stores use the holiday season to recruit new talent from the seasonal workforce. Sluggish sales will likely mean fewer of those workers will land fulltime jobs.

Online Shopper Tax Evader

Besides the sluggish holiday shopping sales, there’s another humbug feeding on state revenues. Online sales rose 16 percent this holiday shopping season, and most of those shoppers will pay NO state sales taxes. Online shops without locations in Florida aren’t required to collect sales taxes, although the buyers still owe it. Weissert says few shoppers will voluntarily do the math and pay the state.

“They have to go and individually calculate and pay their Florida state sales and use tax, but when they don’t, those collections drop because of tax evasion essentially,” said Weissert.

Last year just 7-thousand people statewide paid the tax. The form is called the DR-15MO. It’s on the Florida Department of Revenue’s Website. We’ve also linked it here on our webpage. http://dor.myflorida.com/dor/forms/2010/dr15mo.pdf

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