Florida Senate - 2017              PROPOSED COMMITTEE SUBSTITUTE
       Bill No. SB 378
       
       
       
       
       
                               Ì687590AÎ687590                          
       
       576-02638-17                                                    
       Proposed Committee Substitute by the Committee on Appropriations
       (Appropriations Subcommittee on Finance and Tax)
    1                        A bill to be entitled                      
    2         An act relating to taxation; amending s. 212.031,
    3         F.S.; revising the tax rate applicable to the rental
    4         or granting of a license to use real property;
    5         providing applicability; amending s. 212.20, F.S.;
    6         revising the distribution of proceeds from certain
    7         taxes to specified trust funds; amending s. 624.509,
    8         F.S.; deleting the credit against the insurance
    9         premium tax which is based on the amount paid in
   10         salaries to certain employees within this state;
   11         conforming provisions to changes made by the act;
   12         amending ss. 624.5091 and 624.51055, F.S.; conforming
   13         provisions to changes made by the act; providing
   14         applicability; providing effective dates.
   15          
   16  Be It Enacted by the Legislature of the State of Florida:
   17  
   18         Section 1. Effective January 1, 2018, paragraphs (c) and
   19  (d) of subsection (1) of section 212.031, Florida Statutes, are
   20  amended to read:
   21         212.031 Tax on rental or license fee for use of real
   22  property.—
   23         (1)
   24         (c) For the exercise of such privilege, a tax is levied in
   25  an amount equal to 5 6 percent of and on the total rent or
   26  license fee charged for such real property by the person
   27  charging or collecting the rental or license fee. The total rent
   28  or license fee charged for such real property shall include
   29  payments for the granting of a privilege to use or occupy real
   30  property for any purpose and shall include base rent, percentage
   31  rents, or similar charges. Such charges shall be included in the
   32  total rent or license fee subject to tax under this section
   33  whether or not they can be attributed to the ability of the
   34  lessor’s or licensor’s property as used or operated to attract
   35  customers. Payments for intrinsically valuable personal property
   36  such as franchises, trademarks, service marks, logos, or patents
   37  are not subject to tax under this section. In the case of a
   38  contractual arrangement that provides for both payments taxable
   39  as total rent or license fee and payments not subject to tax,
   40  the tax shall be based on a reasonable allocation of such
   41  payments and shall not apply to that portion which is for the
   42  nontaxable payments.
   43         (d) When the rental or license fee of any such real
   44  property is paid by way of property, goods, wares, merchandise,
   45  services, or other thing of value, the tax shall be at the rate
   46  of 5 6 percent of the value of the property, goods, wares,
   47  merchandise, services, or other thing of value.
   48         Section 2. The amendments made by this act to s. 212.031,
   49  Florida Statutes, apply to payments due on or after January 1,
   50  2018, for taxable leases and licenses to use real property. The
   51  tax rate in effect at the time that the tenant or licensee
   52  occupies, uses, or is entitled to the occupancy or use of the
   53  real property is the tax rate applicable to a transaction
   54  taxable under s. 212.031, Florida Statutes, regardless of when
   55  the rent or license fee is paid. The applicable tax rate may not
   56  be avoided by delaying rent or license fee payments.
   57         Section 3. Effective February 1, 2018, paragraph (d) of
   58  subsection (6) of section 212.20, Florida Statutes, is amended
   59  to read:
   60         212.20 Funds collected, disposition; additional powers of
   61  department; operational expense; refund of taxes adjudicated
   62  unconstitutionally collected.—
   63         (6) Distribution of all proceeds under this chapter and ss.
   64  202.18(1)(b) and (2)(b) and 203.01(1)(a)3. is as follows:
   65         (d) The proceeds of all other taxes and fees imposed
   66  pursuant to this chapter or remitted pursuant to s. 202.18(1)(b)
   67  and (2)(b) shall be distributed as follows:
   68         1. In any fiscal year, the greater of $500 million, minus
   69  an amount equal to 4.6 percent of the proceeds of the taxes
   70  collected pursuant to chapter 201, or 5.2 percent of all other
   71  taxes and fees imposed pursuant to this chapter or remitted
   72  pursuant to s. 202.18(1)(b) and (2)(b) shall be deposited in
   73  monthly installments into the General Revenue Fund.
   74         2. After the distribution under subparagraph 1., 9.0720
   75  8.9744 percent of the amount remitted by a sales tax dealer
   76  located within a participating county pursuant to s. 218.61
   77  shall be transferred into the Local Government Half-cent Sales
   78  Tax Clearing Trust Fund. Beginning July 1, 2003, the amount to
   79  be transferred shall be reduced by 0.1 percent, and the
   80  department shall distribute this amount to the Public Employees
   81  Relations Commission Trust Fund less $5,000 each month, which
   82  shall be added to the amount calculated in subparagraph 3. and
   83  distributed accordingly.
   84         3. After the distribution under subparagraphs 1. and 2.,
   85  0.0975 0.0966 percent shall be transferred to the Local
   86  Government Half-cent Sales Tax Clearing Trust Fund and
   87  distributed pursuant to s. 218.65.
   88         4. After the distributions under subparagraphs 1., 2., and
   89  3., 2.1060 2.0810 percent of the available proceeds shall be
   90  transferred monthly to the Revenue Sharing Trust Fund for
   91  Counties pursuant to s. 218.215.
   92         5. After the distributions under subparagraphs 1., 2., and
   93  3., 1.3810 1.3653 percent of the available proceeds shall be
   94  transferred monthly to the Revenue Sharing Trust Fund for
   95  Municipalities pursuant to s. 218.215. If the total revenue to
   96  be distributed pursuant to this subparagraph is at least as
   97  great as the amount due from the Revenue Sharing Trust Fund for
   98  Municipalities and the former Municipal Financial Assistance
   99  Trust Fund in state fiscal year 1999-2000, no municipality shall
  100  receive less than the amount due from the Revenue Sharing Trust
  101  Fund for Municipalities and the former Municipal Financial
  102  Assistance Trust Fund in state fiscal year 1999-2000. If the
  103  total proceeds to be distributed are less than the amount
  104  received in combination from the Revenue Sharing Trust Fund for
  105  Municipalities and the former Municipal Financial Assistance
  106  Trust Fund in state fiscal year 1999-2000, each municipality
  107  shall receive an amount proportionate to the amount it was due
  108  in state fiscal year 1999-2000.
  109         6. Of the remaining proceeds:
  110         a. In each fiscal year, the sum of $29,915,500 shall be
  111  divided into as many equal parts as there are counties in the
  112  state, and one part shall be distributed to each county. The
  113  distribution among the several counties must begin each fiscal
  114  year on or before January 5th and continue monthly for a total
  115  of 4 months. If a local or special law required that any moneys
  116  accruing to a county in fiscal year 1999-2000 under the then
  117  existing provisions of s. 550.135 be paid directly to the
  118  district school board, special district, or a municipal
  119  government, such payment must continue until the local or
  120  special law is amended or repealed. The state covenants with
  121  holders of bonds or other instruments of indebtedness issued by
  122  local governments, special districts, or district school boards
  123  before July 1, 2000, that it is not the intent of this
  124  subparagraph to adversely affect the rights of those holders or
  125  relieve local governments, special districts, or district school
  126  boards of the duty to meet their obligations as a result of
  127  previous pledges or assignments or trusts entered into which
  128  obligated funds received from the distribution to county
  129  governments under then-existing s. 550.135. This distribution
  130  specifically is in lieu of funds distributed under s. 550.135
  131  before July 1, 2000.
  132         b. The department shall distribute $166,667 monthly to each
  133  applicant certified as a facility for a new or retained
  134  professional sports franchise pursuant to s. 288.1162. Up to
  135  $41,667 shall be distributed monthly by the department to each
  136  certified applicant as defined in s. 288.11621 for a facility
  137  for a spring training franchise. However, not more than $416,670
  138  may be distributed monthly in the aggregate to all certified
  139  applicants for facilities for spring training franchises.
  140  Distributions begin 60 days after such certification and
  141  continue for not more than 30 years, except as otherwise
  142  provided in s. 288.11621. A certified applicant identified in
  143  this sub-subparagraph may not receive more in distributions than
  144  expended by the applicant for the public purposes provided in s.
  145  288.1162(5) or s. 288.11621(3).
  146         c. Beginning 30 days after notice by the Department of
  147  Economic Opportunity to the Department of Revenue that an
  148  applicant has been certified as the professional golf hall of
  149  fame pursuant to s. 288.1168 and is open to the public, $166,667
  150  shall be distributed monthly, for up to 300 months, to the
  151  applicant.
  152         d. Beginning 30 days after notice by the Department of
  153  Economic Opportunity to the Department of Revenue that the
  154  applicant has been certified as the International Game Fish
  155  Association World Center facility pursuant to s. 288.1169, and
  156  the facility is open to the public, $83,333 shall be distributed
  157  monthly, for up to 168 months, to the applicant. This
  158  distribution is subject to reduction pursuant to s. 288.1169. A
  159  lump sum payment of $999,996 shall be made after certification
  160  and before July 1, 2000.
  161         e. The department shall distribute up to $83,333 monthly to
  162  each certified applicant as defined in s. 288.11631 for a
  163  facility used by a single spring training franchise, or up to
  164  $166,667 monthly to each certified applicant as defined in s.
  165  288.11631 for a facility used by more than one spring training
  166  franchise. Monthly distributions begin 60 days after such
  167  certification or July 1, 2016, whichever is later, and continue
  168  for not more than 20 years to each certified applicant as
  169  defined in s. 288.11631 for a facility used by a single spring
  170  training franchise or not more than 25 years to each certified
  171  applicant as defined in s. 288.11631 for a facility used by more
  172  than one spring training franchise. A certified applicant
  173  identified in this sub-subparagraph may not receive more in
  174  distributions than expended by the applicant for the public
  175  purposes provided in s. 288.11631(3).
  176         f. Beginning 45 days after notice by the Department of
  177  Economic Opportunity to the Department of Revenue that an
  178  applicant has been approved by the Legislature and certified by
  179  the Department of Economic Opportunity under s. 288.11625 or
  180  upon a date specified by the Department of Economic Opportunity
  181  as provided under s. 288.11625(6)(d), the department shall
  182  distribute each month an amount equal to one-twelfth of the
  183  annual distribution amount certified by the Department of
  184  Economic Opportunity for the applicant. The department may not
  185  distribute more than $7 million in the 2014-2015 fiscal year or
  186  more than $13 million annually thereafter under this sub
  187  subparagraph.
  188         g. Beginning December 1, 2015, and ending June 30, 2016,
  189  the department shall distribute $26,286 monthly to the State
  190  Transportation Trust Fund. Beginning July 1, 2016, the
  191  department shall distribute $15,333 monthly to the State
  192  Transportation Trust Fund.
  193         7. All other proceeds must remain in the General Revenue
  194  Fund.
  195         Section 4. Subsections (5) through (9) of section 624.509,
  196  Florida Statutes, are amended to read:
  197         624.509 Premium tax; rate and computation.—
  198         (5)(a)1. There shall be allowed a credit against the net
  199  tax imposed by this section equal to 15 percent of the amount
  200  paid by an insurer in salaries to employees located or based
  201  within this state and who are covered by the provisions of
  202  chapter 443.
  203         2. As an alternative to the credit allowed in subparagraph
  204  1., an affiliated group of corporations which includes at least
  205  one insurance company writing premiums in Florida may elect to
  206  take a credit against the net tax imposed by this section in an
  207  amount that may not exceed 15 percent of the salary of the
  208  employees of the affiliated group of corporations who perform
  209  insurance-related activities, are located or based within this
  210  state, and are covered by chapter 443. For purposes of this
  211  subparagraph, the term “affiliated group of corporations” means
  212  two or more corporations that are entirely owned directly or
  213  indirectly by a single corporation and that constitute an
  214  affiliated group as defined in s. 1504(a) of the Internal
  215  Revenue Code. The amount of credit allowed under this
  216  subparagraph is limited to the combined Florida salary tax
  217  credits allowed for all insurance companies that were members of
  218  the affiliated group of corporations for the tax year ending
  219  December 31, 2002, divided by the combined Florida taxable
  220  premiums written by all insurance companies that were members of
  221  the affiliated group of corporations for the tax year ending
  222  December 31, 2002, multiplied by the combined Florida taxable
  223  premiums of the affiliated group of corporations for the current
  224  year. An affiliated group of corporations electing this
  225  alternative calculation method must make such election on or
  226  before August 1, 2005. The election of this alternative
  227  calculation method is irrevocable and binding upon successors
  228  and assigns of the affiliated group of corporations electing
  229  this alternative. However, if a member of an affiliated group of
  230  corporations acquires or merges with another insurance company
  231  after the date of the irrevocable election, the acquired or
  232  merged company is not entitled to the affiliated group election
  233  and shall only be entitled to calculate the tax credit under
  234  subparagraph 1.
  235  
  236  In no event shall the salary paid to an employee by an
  237  affiliated group of corporations be claimed as a credit by more
  238  than one insurer or be counted more than once in an insurer’s
  239  calculation of the credit as described in subparagraph 1. or
  240  subparagraph 2. Only the portion of an employee’s salary paid
  241  for the performance of insurance-related activities may be
  242  included in the calculation of the premium tax credit in this
  243  subsection.
  244         (b) For purposes of this subsection:
  245         1. The term “salaries” does not include amounts paid as
  246  commissions.
  247         2. The term “employees” does not include independent
  248  contractors or any person whose duties require that the person
  249  hold a valid license under the Florida Insurance Code, except
  250  adjusters, managing general agents, and service representatives,
  251  as defined in s. 626.015.
  252         3. The term “net tax” means the tax imposed by this section
  253  after applying the calculations and credits set forth in
  254  subsection (4).
  255         4. An affiliated group of corporations that created a
  256  service company within its affiliated group on July 30, 2002,
  257  shall allocate the salary of each service company employee
  258  covered by contracts with affiliated group members to the
  259  companies for which the employees perform services. The salary
  260  allocation is based on the amount of time during the tax year
  261  that the individual employee spends performing services or
  262  otherwise working for each company over the total amount of time
  263  the employee spends performing services or otherwise working for
  264  all companies. The total amount of salary allocated to an
  265  insurance company within the affiliated group shall be included
  266  as that insurer’s employee salaries for purposes of this
  267  section.
  268         a. Except as provided in subparagraph (a)2., the term
  269  “affiliated group of corporations” means two or more
  270  corporations that are entirely owned by a single corporation and
  271  that constitute an affiliated group of corporations as defined
  272  in s. 1504(a) of the Internal Revenue Code.
  273         b. The term “service company” means a separate corporation
  274  within the affiliated group of corporations whose employees
  275  provide services to affiliated group members and which are
  276  treated as service company employees for reemployment assistance
  277  or unemployment compensation and common law purposes. The
  278  holding company of an affiliated group may not qualify as a
  279  service company. An insurance company may not qualify as a
  280  service company.
  281         c. If an insurance company fails to substantiate, whether
  282  by means of adequate records or otherwise, its eligibility to
  283  claim the service company exception under this section, or its
  284  salary allocation under this section, no credit shall be
  285  allowed.
  286         5. A service company that is a subsidiary of a mutual
  287  insurance holding company, which mutual insurance holding
  288  company was in existence on or before January 1, 2000, shall
  289  allocate the salary of each service company employee covered by
  290  contracts with members of the mutual insurance holding company
  291  system to the companies for which the employees perform
  292  services. The salary allocation is based on the ratio of the
  293  amount of time during the tax year which the individual employee
  294  spends performing services or otherwise working for each company
  295  to the total amount of time the employee spends performing
  296  services or otherwise working for all companies. The total
  297  amount of salary allocated to an insurance company within the
  298  mutual insurance holding company system shall be included as
  299  that insurer’s employee salaries for purposes of this section.
  300  However, this subparagraph does not apply for any tax year
  301  unless funds sufficient to offset the anticipated salary credits
  302  have been appropriated to the General Revenue Fund prior to the
  303  due date of the final return for that year.
  304         a. The term “mutual insurance holding company system” means
  305  two or more corporations that are subsidiaries of a mutual
  306  insurance holding company and in compliance with part IV of
  307  chapter 628.
  308         b. The term “service company” means a separate corporation
  309  within the mutual insurance holding company system whose
  310  employees provide services to other members of the mutual
  311  insurance holding company system and are treated as service
  312  company employees for reemployment assistance or unemployment
  313  compensation and common-law purposes. The mutual insurance
  314  holding company may not qualify as a service company.
  315         c. If an insurance company fails to substantiate, whether
  316  by means of adequate records or otherwise, its eligibility to
  317  claim the service company exception under this section, or its
  318  salary allocation under this section, no credit shall be
  319  allowed.
  320         (c) The department may adopt rules pursuant to ss.
  321  120.536(1) and 120.54 to administer this subsection.
  322         (5)(6)(a) The total of the credit granted for the taxes
  323  paid by the insurer under chapter 220 and the credit granted by
  324  subsection (5) may not exceed 65 percent of the tax due under
  325  subsection (1) after deducting therefrom the taxes paid by the
  326  insurer under ss. 175.101 and 185.08 and any assessments
  327  pursuant to s. 440.51.
  328         (b) To the extent that any credits granted by subsection
  329  (5) remain as a result of the limitation set forth in paragraph
  330  (a), such excess credits related to salaries and wages of
  331  employees whose place of employment is located within an
  332  enterprise zone created pursuant to chapter 290 may be
  333  transferred, in an aggregate amount not to exceed 25 percent of
  334  such excess salary credits, to any insurer that is a member of
  335  an affiliated group of corporations, as defined in sub
  336  subparagraph (5)(b)4.a., that includes the original insurer
  337  qualifying for the credits under subsection (5). The amount of
  338  such excess credits to be transferred shall be calculated by
  339  multiplying the amount of such excess credits by a fraction, the
  340  numerator of which is the sum of the salaries qualifying for the
  341  credit allowed by subsection (5) of employees whose place of
  342  employment is located in an enterprise zone and the denominator
  343  of which is the sum of the salaries qualifying for the credit
  344  allowed by subsection (5). Any such transferred credits shall be
  345  subject to the same provisions and limitations set forth within
  346  part IV of this chapter. The provisions of this paragraph do not
  347  apply to an affiliated group of corporations that participate in
  348  a common paymaster arrangement as defined in s. 443.1216.
  349         (6)(7) Credits and deductions against the tax imposed by
  350  this section shall be taken in the following order: deductions
  351  for assessments made pursuant to s. 440.51; credits for taxes
  352  paid under ss. 175.101 and 185.08; credits for income taxes paid
  353  under chapter 220 and the credit allowed under subsection (5),
  354  as these credits are limited by subsection (5) (6); and all
  355  other available credits and deductions.
  356         (7)(8) The premium tax authorized by this section may not
  357  be imposed on:
  358         (a) Any portion of the title insurance premium, as defined
  359  in s. 627.7711, retained by a title insurance agent or agency.
  360  It is the intent of the Legislature that this exemption be
  361  contingent on title insurers adding employees to their payroll.
  362  This paragraph expires December 31, 2017, unless the Department
  363  of Economic Opportunity determines that title insurers holding a
  364  valid certificate of authority as of July 1, 2014, have added,
  365  in aggregate, at least 600 Florida-based full-time equivalent
  366  positions above those existing on July 1, 2014, including
  367  positions obtained from a temporary employment agency or
  368  employee leasing company or through a union agreement or
  369  coemployment under a professional employer organization
  370  agreement by July 1, 2017. For purposes of this paragraph, the
  371  term “full-time equivalent position” means a position in which
  372  the employee works an average of at least 36 hours per week each
  373  month.
  374         1. The Department of Economic Opportunity may verify
  375  information provided by title insurers concerning additional
  376  positions created with any appropriate agency or authority,
  377  including the Department of Revenue.
  378         2. To facilitate verification of additional positions
  379  created by title insurers, the Department of Economic
  380  Opportunity may provide a list of employees holding additional
  381  positions created by title insurers to any appropriate agency or
  382  authority, including the Department of Revenue.
  383         3. The Department of Economic Opportunity shall submit such
  384  determination to the President of the Senate, the Speaker of the
  385  House of Representatives, and the Department of Revenue by
  386  October 1, 2017.
  387         (b) Receipts of annuity premiums or considerations paid by
  388  holders in this state if the tax savings derived are credited to
  389  the annuity holders. Upon request by the Department of Revenue,
  390  an insurer availing itself of this provision shall submit to the
  391  department evidence that establishes that the tax savings
  392  derived have been credited to annuity holders. As used in this
  393  paragraph, the term “holders” includes employers contributing to
  394  an employee’s pension, annuity, or profit-sharing plan.
  395         (8)(9) As used in this section, “insurer” includes any
  396  entity subject to the tax imposed by this section.
  397         Section 5. Subsection (1) of section 624.5091, Florida
  398  Statutes, is amended to read:
  399         624.5091 Retaliatory provision, insurers.—
  400         (1)(a) When by or pursuant to the laws of any other state
  401  or foreign country any taxes, licenses, and other fees, in the
  402  aggregate, and any fines, penalties, deposit requirements, or
  403  other material obligations, prohibitions, or restrictions are or
  404  would be imposed upon Florida insurers or upon the agents or
  405  representatives of such insurers, which are in excess of such
  406  taxes, licenses, and other fees, in the aggregate, or which are
  407  in excess of the fines, penalties, deposit requirements, or
  408  other obligations, prohibitions, or restrictions directly
  409  imposed upon similar insurers, or upon the agents or
  410  representatives of such insurers, of such other state or country
  411  under the statutes of this state, so long as such laws of such
  412  other state or country continue in force or are so applied, the
  413  same taxes, licenses, and other fees, in the aggregate, or
  414  fines, penalties, deposit requirements, or other material
  415  obligations, prohibitions, or restrictions of whatever kind
  416  shall be imposed by the Department of Revenue upon the insurers,
  417  or upon the agents or representatives of such insurers, of such
  418  other state or country doing business or seeking to do business
  419  in this state. In determining the taxes to be imposed under this
  420  section, 80 percent and a portion of the remaining 20 percent as
  421  provided in paragraph (b) of the credit provided by s.
  422  624.509(5), as limited by s. 624.509(6) and further determined
  423  by s. 624.509(7), shall not be taken into consideration.
  424         (b) As used in this subsection, the term “portion of the
  425  remaining 20 percent” shall be calculated by multiplying the
  426  remaining 20 percent by a fraction, the numerator of which is
  427  the sum of the salaries qualifying for the credit allowed by s.
  428  624.509(5) of employees whose place of employment is located in
  429  an enterprise zone created pursuant to chapter 290 and the
  430  denominator of which is the sum of the salaries qualifying for
  431  the credit allowed by s. 624.509(5).
  432         Section 6. Subsection (1) of section 624.51055, Florida
  433  Statutes, is amended to read:
  434         624.51055 Credit for contributions to eligible nonprofit
  435  scholarship-funding organizations.—
  436         (1) There is allowed a credit of 100 percent of an eligible
  437  contribution made to an eligible nonprofit scholarship-funding
  438  organization under s. 1002.395 against any tax due for a taxable
  439  year under s. 624.509(1) after deducting from such tax
  440  deductions for assessments made pursuant to s. 440.51; credits
  441  for taxes paid under ss. 175.101 and 185.08; and credits for
  442  income taxes paid under chapter 220; and the credit allowed
  443  under s. 624.509(5), as such credit is limited by s. 624.509(5)
  444  s. 624.509(6). An insurer claiming a credit against premium tax
  445  liability under this section shall not be required to pay any
  446  additional retaliatory tax levied pursuant to s. 624.5091 as a
  447  result of claiming such credit. Section 624.5091 does not limit
  448  such credit in any manner.
  449         Section 7. The amendments made by this act to ss. 624.509,
  450  624.5091, and 624.51055, Florida Statutes, apply to the tax
  451  imposed on premiums received after December 31, 2016.
  452         Section 8. Except as otherwise expressly provided in this
  453  act, this act shall take effect upon becoming a law.