St. Petersburg Times Online: Business

Weather | Sports | Forums | Comics | Classifieds | Calendar | Movies

Byrd's resistance to interstate compact costs state billions in taxes

Published May 25, 2003

TALLAHASSEE - On the wall of an office building facing South Adams Street, a block from the Capitol, a large bright red digital clock counts off dollars too fast for the eye to follow: $40 a second, $3,456,000 a day. Even here, that's a lot of money.

It represents the uncollected sales tax that Floridians owe on goods they buy out of state by mail, by phone and over the Internet. Conservative estimates put that at $1.3-billion a year and growing as remote marketing continues to displace Main Street.

The clock, put up by the Florida Retail Federation, is aimed at persuading the Legislature to pass an interstate compact called the Streamlined Sales Tax Agreement. Congress has signaled that if enough states do, it might require remote sellers to collect the tax for participating states. Ten states have complied.

The Florida Senate passed the bill unanimously. Speaker Johnnie Byrd refused to let the House consider it.

Every big business lobby in Florida supports the legislation. They argue that if they have to charge the tax to their customers, so should their out-of-state competitors. (Then too, more success in sales tax collection would lessen the risk of new taxes on Florida businesses.)

Byrd has been their ally in every other regard, notably the highly controversial workers' compensation bill. But he's stiffing them on the tax collection issue.

Byrd's last word, relayed through his press secretary, is that he is not in favor of the bill "at this time." He objects that it would "require changing Florida's tax laws to fit the demands of other states." He will "continue to monitor the progress of the states in this project."

With all due respect to the majesty of his office, that's baloney. The changes effected by the bill would make tax compliance much simpler for businesses, be unnoticeable by most shoppers and insignificant to the budget. Delivery charges would be newly taxed but some candy, along with Popsicles, frozen fruit bars, ice cream and frozen yogurt sold in cones, cups or pints would become exempt. So Byrd is thwarting a tax break for kids.

He is taking his cue from a far-right Washington political committee called the Club for Growth, which stridently opposes the interstate compact.

"If there's a problem with fairness," says Stephen Moore, president of the Club for Growth, " . . . the states should cut their taxes."

The Club for Growth is a four-year-old Washington-based political committee that aggressively backs candidates "who support the Reagan vision of limited government and lower taxes." It attacks moderate Republicans as well as Democrats and was instrumental in defeating Bill Sublette, a highly regarded moderate legislator from Orlando, in a 2000 Republican runoff. More recently, it sponsored ads attacking Republican U.S. senators who wanted smaller tax cuts than President Bush requested.

Byrd wants the Club's support, which it would be eager to supply, for a potential future campaign.

Moore readily acknowledged, in a telephone interview, that he had lobbied Byrd "several times" against the interstate tax plan. He said he has spoken about it also to Gov. Jeb Bush and to members of the House Freedom Caucus.

"We've done whatever we can to block Florida from doing this," Moore said. "My main point of opposition is that I'm opposed to any sort of cartel among the states. . . . I'm a big believer in states competing against each other. . . "

The Club has several close ties to the libertarian Cato Institute, which also strongly opposes the sales tax project. Moore, for one, is also a senior fellow at Cato. He also writes for the National Review, in which he attacked the National Governors Association, main proponent of the interstate agreement, as "little more than a Washington lobby for Internet taxation."

Moore said he last spoke to Byrd "about three months ago when he came by my office and said, "I'm thinking of running for the U.S. Senate.'

"About a week later he announced he wasn't," Moore said.

In Tallahassee, Byrd's new goal is widely thought to be the U.S. House seat presently held by Rep. Michael Bilirakis, R-Tarpon Springs.

"I'd love to see Johnnie in Congress," Moore said. "If he ran, I certainly would like to help."

Moore wrote the Weekly Standard article, reprinted in Perspective May 11, touting Bush to succeed his brother the president in 2008. Bush has done nothing for or against the tax bill.

Byrd, meanwhile, refused three requests relayed through his press office that he confirm or deny a report that Byrd had said he didn't want to be known as "the speaker who taxed the Internet."

Nothing about the issue calls for taxing the Internet itself, or access to it.

It is easy to understand, however, how a politician like Byrd might want to keep on the good side of a right-wing lobby that persists in calling it Internet taxation.

© Copyright, St. Petersburg Times. All rights reserved.