The $1.5 Billion Loophole

REVIEW SUMMARY
What. Collecting sales taxes owed by out-of-state businesses.
Issue. How to close the Internet sales tax loophole.
Impact. By one estimate, the loophole costs Florida $1.5 billion a year.

In the world of sporting equipment sales, customers have several retailers to choose from. But Sandy Fortin, owner of 28 franchises of sporting goods store Play It Again Sports in Florida, says he's competing on an unlevel playing field with his online competitors because of a legal loophole: out-of-state Internet retailers don't charge sales tax.

“The challenge we have is that people will come into our store and ask to be fitted for the right bat, and then go on the Internet and buy that product,” says Fortin, who's also treasurer of the Florida Retail Federation. “We end up spending payroll and time with customers, and then they go spend it on the Internet.”