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February 1, 2012

The Honorable Ellyn BogdanoffChair, Senate Budget Subcommittee on Finance and Tax

212 Senate Office BuildingTallahassee, Florida 32399

Dear Chair Bogdanoff:

I am writing you, on behalf of Americans for Prosperitys 92,000 Florida activists, in opposition

of SB 7206, which is scheduled to be considered at the Thursday, February 2nd meeting of theSenate Budget Subcommittee on Finance and Tax.

Americans for Prosperity feels that SB 7206 is a prime example of government picking the

winners and losers in business. It unfairly changes standards to tax out-of-state companies asthough they are in-state. Big-box retailers will try to claim that SB 7206 will level the playing

field between online and brick-and-mortar stores, however it will actually give in-state stores anunfair advantage by exchanging the internet sales tax for specialized sales tax holidays that apply

to chosen retailers and merchants.

One must also question the constitutionality of SB 7206. Despite the Supreme Courts ruling

that states cannot tax an entity without a presence in the state, a number of other states havesought to change their nexus standards to include retailers like Amazon that use an affiliatedreferral structure. In Florida Amazon does not have a physical presence or employees, but relies

on in-state websites for referrals to Amazons proper website. Some argue that referrals meet thephysical presence standard, and therefore should be subject to in-state sales tax collection.

However, similar laws have resulted in extensive litigation and been ruled unconstitutional inother states including Colorado and North Carolina.

As a result of the passing of a similar law in California, Amazon immediately notified all of their

California affiliates that they would no longer be doing business with them. Instead of collectingthe increased sales tax, Californians immediately lost income. In other states, affiliates have

relocated to non-taxing states (see the attached article from the New York Times). SB 7206 willresult in a loss of income for Floridians, and at a time when we are desperately in need of jobs.

Americans for Prosperity Florida does not support any new tax exemptions that will give onegroup of retailers an unfair advantage over another. We also do not support further distorting the

free-market by swapping an increased sales tax with sales tax holidays. SB 7206 will not evenout the market, but it will likely result in the loss of income for Floridians and, according to the

Tax Foundation, other states have collected little, if any, revenue from the change.

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We ask for your serious reconsideration of SB 7206 and suggest that, at a time when Florida is in

need of job creation and economic growth, the Legislature would be better served to promotelegislation that will encourage new business in Florida and lessen the tax burden on Floridians.

Sincerely,

Slade OBrien Abigail MacIverState Director Director of Policy

Americans for Prosperity-Florida Americans for Prosperity-Florida

Cc: Governor Rick Scott

Senate President Mike HaridopolosHouse Speaker Dean Cannon

Members of the Senate Budget Subcommittee on Finance & TaxRepresentative Steve Precourt