New Florida Economic Nexus Law to Impact DtC Wine Shippers

Florida Governor Ron DeSantis signed SB 50 into law on April 19, which makes Florida the latest state to adopt economic nexus rules to impose a sales tax liability on remote sellers, including direct-to-consumer (DtC) shippers of wine.

Unlike most other states, Florida does not currently require DtC wine shippers to assume a sales tax obligation in the state to make sales. Previously, DtC wine shippers were only liable for Florida sales tax if they had physical presence nexus in the state. Under the new economic nexus rules, however, many more DtC wine shippers will now be required to collect and remit Florida sales tax.

Under SB 50, the economic nexus threshold in Florida is established at $100,000 in annual, taxable sales in the state. Since the threshold applies only to taxable sales made by remote sellers, this would exclude sales to Florida wholesalers (as those are non-taxable sales for resale). As such, DtC wine shippers should only assess their direct sales to Florida consumers when they determine they have economic nexus.

SB 50 is set to become effective on July 1, 2021, so DtC wine shippers have until that date to prepare for collecting and remitting Florida sales tax if they meet the annual sales threshold (looking back at the previous year’s sales).

Economic nexus rules have swept across the U.S. since the Supreme Court ruled in the 2018 South Dakota v. Wayfair case that states could establish sales tax obligations on remote sellers if the requirements and conditions were not too onerous. Similar law changes in California, Colorado, Minnesota, Iowa, D.C., Wyoming, and Louisiana establishing new sales tax rules for remote sellers have previously affected DtC wine shippers. Florida is just the latest state, and one of the last, to adopt economic nexus rules.

Florida’s state sales tax rate is at 6%, though local communities can impose an additional amount of up to 2%.

DtC wine shippers with economic nexus in Florida should prepare to collect and remit the state’s sales tax by the effective date of July 1. This will require registering an account with the Florida Department of Revenue (DOR) to file those taxes. Sovos ShipCompliant users currently can find support for collecting and filing Florida sales tax in their accounts. However, they should not adjust those settings until they have an active sales tax account with the Florida DOR.