1% Transaction Fee

Tax season is upon us, so our thoughts are usually fine-tuned to the expansion of our government services, either by tax, or fee increases, to the public. One fee that is not widely known by the public is the 1% vendor transaction fee required to be paid by all businesses working for, or supplying goods, for the state of Florida as vendors. Governor Jeb Bush had a good plan to initiate a more streamlined system (for purchasing), that lead to the implementation of MyFloridaMarketPlace, which was meant to cut government waste through consolidated purchasing at the state level. The Florida Legislature set up of MyFloridaMarketPlace in 2003, with a across-the-board, 1% vendor transaction fee imposed on all vendors that do business with the state, to cover start-up costs of this new system. While this new system was suppose to save taxpayers money, it has ultimately cost more with the hidden transaction fees required by vendors. The imposition of this 1% vendor transaction fee is based on each invoice or bid total from private business to the state. This 1% transaction fee was implemented on vendors with the thought that it would not cost the state taxpayers a cent. The system is suppose to generate more revenue for the vendors doing business with the state, thusly creating their lower costs. The thought was that businesses would actually save money by increasing their (businesses) gross profits. This approach was flawed from the start, since private business will not absorb this transaction fee because it affects their bottom line. Businesses have had to increase their prices to the state of Florida to cover overhead costs in their respective businesses. With the vendors charging more, taxpayers are ultimately paying more for the necessary services required by the state. This is virtually a silent way to increase the cost of government in the state of Florida, by using private business as a vehicle to generate more cash flow into the state budget. Taxpayers are not even aware that state services are costing substantially more, even though vendors have no control over this system. Imagine how much money is being generated at 1% with just one multi-million dollar road contract. It should be noted that vendors are prohibited from itemizing this 1% transaction fee on their invoices submitted to the state, even though increases have been built into their pricing to cover the cost of doing business. No trace of this fee can be seen in vendor invoices. This overall transaction fee was implemented to help pay for the acquisition, development, implementation and operations of MyFloridaMarketPlace system but when will that 1% transaction fee be enough? According to their current website, it appears that this fee has become a permanent part of doing business with the state at MyFloridaMarketPlace. The only losers in this system are the taxpayers of this state, with the ever-rising cost of government in the state of Florida.