Telecommunications

A. Tax on Telecommunications (Gross Receipts Tax, State and Local Sales and Use Tax, and Municipal Utility Tax) -- Chapters 166, 203, and 212, F.S.

Current Situation:

The tax rate on telecommunications services varies considerably in Florida. Telecommunications services are subject to four different taxes: Gross Receipts (2.5%), State Sales and Use Tax (7%), Local Option Tax (max. 1%), and Municipal Utility Tax (max. 7%). Telephone and cable companies also pay franchise fees to municipalities for using public rights-of-way.

Legislative Change:

Senate Bill 1338 (SB 1338), prefiled 2/10/00, substantially rewrites Florida’s communications tax law. The bill creates a new Chapter 202, F.S., the Communications Services Tax Simplification Law, and provides that communications services are subject to a uniform statewide tax rate and a local tax to be administered by the Department of Revenue.

The bill does not set the state and local communications services tax rates. The industry and local governments are directed to supply pertinent information to the Department of Revenue for use by the Revenue Estimating Conference for calculating revenue neutral rates to be presented to the Legislature for review and approval during the 2001 Regular Session. Unless action is taken by the Legislature before June 30, 2001, the act is repealed. These provisions took effect July 1, 2000.