September 8, 2000

Tax Administration Bill

Holland & Knight Newsletter
Eddie Williams III

House Bill (HB 2433) provides the following changes regarding Florida taxes. These provisions took effect June 21, 2000, except as otherwise provided in the bill.

A. Administrative Changes

  • Section 95.091(3)(a), F.S., is amended so that effective July 1, 2002, the statute of limitations period is 3 years for all open periods. After July 1, 2002, all records created prior to July 1, 1999, will no longer be subject to audit.

  • Section 106.265(2), F.S., is amended to transfer the responsibility for the collection of civil penalties assessed by the Elections Commission from the Department of Revenue to the Elections Commission.

  • Section 120.80, F.S., is amended by awarding attorney fees in cases where the court finds that the Department of Revenue improperly rejected or modified a conclusion of law.

  • Sections 175.111 and 185.09, F.S., are amended to delete the filing of an annual report by an insurance company to the Department of Management Services Division of Retirement. The reporting requirement to the Department of Revenue is retained.

  • For purposes of future calculations only (firefighters and police officer pension plans), the base year revenue received by a municipality for the calendar year 1997, as provided in sections 175.351(1) and 185.35(1), F.S., shall be adjusted by the Division of Retirement based on all original 1997 insurance returns as adjusted by all amended 1997 insurance returns received by the Department of Revenue no later than February 28, 2001.

  • Section 213.053, F.S., is amended to provide for the sharing of specified information by the Department of Revenue with the Department of Management Services and the Department of Highway Safety and Motor Vehicles.

  • Section 213.235(6), F.S., is repealed. Section 213.235(1)-(5), F.S., set out in detail how the new floating interest rate shall be applied to tax deficiencies. Thus, section 213.235(6) was redundant and had the potential to confuse taxpayers on how the floating rate of interest would be administered.

  • Section 213.27(9), F.S., is created to give the Department authority to enter into contracts with public and private vendors to develop and implement a voluntary system for sales and use tax collection and administration.

  • The Bill provides that Chapter 220, F.S., must be updated regarding references to the Internal Revenue Code each year to include changes made in the Internal Revenue Code. The definition of “Internal Revenue Code” provides for “piggybacking” each change made during 1999 in the Internal Revenue Code.

B. Sales and Use Tax

  • Section 212.051, F.S., is amended to add to the sales tax exemption on equipment or machinery for pollution control, specialty chemical or bioaugmentation products. The bill also provides that “specialty chemicals” means those chemicals used to enhance or further treat waste including, but not limited to, defoamers, nutrients, and polymers; and “bioaugmentation products” means the microorganisms used in waste treatment plants to break down solids and consume organic matter.

  • Section 212.06(1)(c), F.S., is amended to remove ambiguity and to clearly reflect the intent of the legislature. The Bill states that the indexed tax on manufactured asphalt for use in public works projects is reduced by 20% and that the reduction applies to all public works projects, including federal.

  • Section 212.08(5)(a), F.S., is amended to provide a sales and use tax exemption for moveable receptacles in which portable containers are placed when used for processing farm products.

  • Section 212.08(5)(c), F.S., is amended to provide a full sales and use tax exemption if it is determined that 15% or less of all electrical or steam energy generated was produced by burning residual fuel.

  • Section 212.08(7)(ii) is amended by providing a retroactive tax exemption for steam or electrical energy used by cigar manufacturers.

  • Section 212.08(7)(eee), F.S., is amended by adding SIC code 35 to the exemption for repair and labor charges.

  • Section 212.08(7)(eee), F.S., is amended to extend the application of the sales tax exemption for materials and labor used in the repair of industrial machinery and equipment to include machinery and equipment used in the preparation of items for shipping.

  • Section 212.11(1)(c), F.S., is amended to allow taxpayers to remain in a less frequent filing status even when the taxpayer remits an amount of tax greater than the threshold for their present filing status. The taxpayer must demonstrate to the Department that the increase in tax remitted represents nonrecurring business.

  • Section 212.12(6)(c), F.S., is amended to remove the term “statistically.” This amendment codifies the practices of the Department. The Department will be required to project sales tax overpayments over the entire audit period and refund net overpayments.

C. Gross Receipts Tax

  • Section 203.01(1)(g), F.S., is created to allow the Department of Revenue to require the following:

  • a quarterly return when the gross receipts tax remitted for the preceding four calendar quarters did not exceed $1,000;
  • a semiannual return when the gross receipts tax remitted for the preceding four calendar quarters did not exceed $500; or
  • an annual return when the gross receipts tax remitted for the preceding four calendar quarters did not exceed $100.

D. Intangible Tax

  • Section 220.62(2), F.S., is amended by adding savings association holding companies to the list of entities exempt from the intangibles tax.

E. Documentary Tax

  • The bill provides a retroactive documentary stamp tax exemption for renewals of promissory notes for revolving obligations, if the renewal extends the existing agreement certain term obligations.

F. Ad Valorem Tax

  • The bill creates section 189.420, F.S., to provide that facilities regulated under chapter 513 (mobile homes or recreational vehicle park facilities) shall be assessed by independent or dependent special districts in the same manner as a hotel, motel, or other similar facility.
  • The bill provides that the Department of Revenue would be required to promulgate rules which give standards for assessing utility property based on a unit method of valuation. In addition, the Department is required to provide an allocation formula which is based on net book value. Finally special provisions allowing deductions for decommissioning nuclear power plants are also provided.

G. Motor Fuels Tax

  • Sections 206.09 and 206.095, F.S., are amended to allow the Department to suspend reporting requirements for terminal operator and bulk carriers when the Excise Summary Terminal Activity Reporting System (“Ex-STARS” - national fuel tracking system) data becomes available to the Department.

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