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House Bill 1275

Florida House of Representatives - 1997 HB 1275 By Representatives Valdes, Edwards, Lacasa, Garcia, Villalobos, Barreiro, Morse and Meek 1 A bill to be entitled 2 An act relating to the municipal public service 3 tax; providing legislative intent; amending s. 4 166.231, F.S.; providing that specified 5 governmental bodies are exempt from the tax; 6 providing that religious institutions that 7 possess sales tax exemption certificates are 8 exempt from the tax; providing that religious 9 institutions that possess sales tax exemption 10 certificates are exempt from the tax on 11 telecommunication services; providing for the 12 liability of sellers for taxes that are not 13 remitted; requiring purchasers claiming 14 exemptions to certify that they are qualified 15 therefor; creating s. 166.233, F.S.; providing 16 requirements for levy of the tax; specifying 17 effective dates; providing duties of the 18 Department of Revenue; requiring municipalities 19 to furnish certain information relating to the 20 tax to the Department of Revenue and to other 21 persons; providing for fees; providing 22 limitations on the responsibilities of sellers 23 if information is not furnished as required; 24 providing procedures that apply when more than 25 one municipality claims an address; creating s. 26 166.234, F.S.; providing procedures for audits 27 by municipalities of sellers of services; 28 prescribing record retention requirements for 29 sellers; providing time limitations on 30 assessments of taxes and on applications for 31 refunds or credits; providing for offsets of 1 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 overpayments against underpayments and for 2 refunds and credits; providing requirements 3 with respect to a determination by a 4 municipality of amounts of tax; providing 5 protest procedures and judicial remedies; 6 providing for settlement or compromise of a 7 seller's liability for taxes; providing rights 8 and duties of municipalities and sellers; 9 providing that public service tax payment dates 10 and return filing dates must conform to due 11 dates established under ch. 212, F.S.; 12 providing a schedule for application of the 13 requirements of the act; providing an 14 appropriation; providing for severability; 15 providing an effective date. 16 17 Be It Enacted by the Legislature of the State of Florida: 18 19 Section 1. The Legislature find that a taxpayer bill 20 of rights has not been prescribed for the municipal public 21 service tax in accordance with Section 25, Article I of the 22 State Constitution. It is therefore the intent of the 23 Legislature to improve the ability of municipalities and 24 sellers to administer this tax at reasonable cost, to protect 25 sellers who act in good faith, to ensure that sellers are 26 furnished the information necessary for remitting collected 27 tax proceeds to the correct municipality, and to prescribe a 28 procedural framework for the administration and auditing 29 functions. The Legislature finds that this act fulfills an 30 important state interest. 31 2 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 Section 2. Section 166.231, Florida Statutes, 1996 2 Supplement, is amended to read: 3 166.231 Municipalities; public service tax.-- 4 (1)(a) A municipality may levy a tax on the purchase 5 of electricity, metered natural gas, liquefied petroleum gas 6 either metered or bottled, manufactured gas either metered or 7 bottled, and water service. The tax shall be levied only upon 8 purchases within the municipality and shall not exceed 10 9 percent of the payments received by the seller of the taxable 10 item from the purchaser for the purchase of such service. 11 Municipalities imposing a tax on the purchase of cable 12 television service as of May 4, 1977, may continue to levy 13 such tax to the extent necessary to meet all obligations to or 14 for the benefit of holders of bonds or certificates which were 15 issued prior to May 4, 1977. Purchase of electricity means 16 the purchase of electric power by a person who will consume it 17 within the municipality. 18 (b) The tax imposed by paragraph (a) shall not be 19 applied against any fuel adjustment charge, and such charge 20 shall be separately stated on each bill. The term "fuel 21 adjustment charge" means all increases in the cost of utility 22 services to the ultimate consumer resulting from an increase 23 in the cost of fuel to the utility subsequent to October 1, 24 1973. 25 (2) Services competitive with those enumerated in 26 subsection (1) or subsection (9), as defined by ordinance, 27 shall be taxed on a comparable base at the same rates. 28 However, fuel oil shall be taxed at a rate not to exceed 4 29 cents per gallon. However, for municipalities levying less 30 than the maximum rate allowable in subsection (1), the maximum 31 tax on fuel oil shall bear the same proportion to 4 cents 3 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 which the tax rate levied under subsection (1) bears to the 2 maximum rate allowable in subsection (1). 3 (3) A municipality may exempt from the tax imposed by 4 this section any amount up to, and including, the first 500 5 kilowatt hours of electricity purchased per month for 6 residential use. Such exemption shall apply to each separate 7 residential unit, regardless of whether such unit is on a 8 separate meter or a central meter, and shall be passed on to 9 each individual tenant. 10 (4)(a) The purchase of natural gas or fuel oil by a 11 public or private utility, either for resale or for use as 12 fuel in the generation of electricity, or the purchase of fuel 13 oil or kerosene for use as an aircraft engine fuel or 14 propellant or for use in internal combustion engines is exempt 15 from taxation hereunder. 16 (b) A municipality may exempt from the tax imposed by 17 this section the purchase of metered or bottled gas (natural 18 liquefied petroleum gas or manufactured) or fuel oil for 19 agricultural purposes. As used in this paragraph, 20 "agricultural purposes" means bona fide farming, pasture, 21 grove, or forestry operations, including horticulture, 22 floriculture, viticulture, dairy, livestock, poultry, bee, and 23 aquaculture. 24 (5) A purchase made by the United States Government, 25 by this state, or by any county, municipality, school 26 district, or public body that is exempted by law or court 27 order is exempt from the tax authorized by this section. A 28 municipality may exempt from the tax imposed by this section 29 taxation hereunder the purchase of the taxable items by the 30 United States Government, this state, any other public body as 31 defined in s. 1.01, or by a nonprofit corporation or 4 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 cooperative association organized under chapter 617 which 2 provides water utility services to no more than 13,500 3 equivalent residential units, ownership of which will revert 4 to a political subdivision upon retirement of all outstanding 5 indebtedness, and shall exempt purchases by any recognized 6 church in this state for use exclusively for church purposes, 7 and shall exempt from the tax authorized in subsection (8) 8 purchases made by any religious institution that possesses a 9 consumer certificate of exemption issued under chapter 212. 10 (6) A municipality may exempt from the tax imposed by 11 this section any amount up to, and including, the total amount 12 of electricity, metered natural gas, liquefied petroleum gas 13 either metered or bottled, or manufactured gas either metered 14 or bottled purchased per month, or reduce the rate of taxation 15 on the purchase of such electricity or gas when purchased by 16 an industrial consumer which uses the electricity or gas 17 directly in industrial manufacturing, processing, compounding, 18 or a production process, at a fixed location in the 19 municipality, of items of tangible personal property for sale. 20 The municipality shall establish the requirements for 21 qualification for this exemption in the manner prescribed by 22 ordinance. Possession by a seller of a written certification 23 by the purchaser, certifying the purchaser's entitlement to an 24 exemption permitted by this subsection, relieves the seller 25 from the responsibility of collecting the tax on the 26 nontaxable amounts, and the municipality shall look solely to 27 the purchaser for recovery of such tax if it determines that 28 the purchaser was not entitled to the exemption. Any 29 municipality granting an exemption pursuant to this subsection 30 shall grant the exemption to all companies classified in the 31 same SIC Industry Major Group Number. 5 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 (7) The tax authorized hereunder shall be collected by 2 the seller of the taxable item from the purchaser at the time 3 of the payment for such service. The seller shall remit the 4 taxes collected to the municipality in the manner prescribed 5 by ordinance. 6 (8) A municipality shall notify in writing any known 7 seller of items taxable hereunder of any change in the 8 boundaries of the municipality or in the rate of taxation. 9 (8)(9)(a) Beginning July 1, 1995, a municipality may 10 by ordinance exempt not less than 50 percent of the tax 11 imposed under this section on purchasers of electrical energy 12 who are determined to be eligible for the exemption provided 13 by s. 212.08(15) by the Department of Revenue. The exemption 14 shall be administered as provided in that section. A copy of 15 any ordinance adopted pursuant to this subsection shall be 16 provided to the Department of Revenue not less than 14 days 17 prior to its effective date. 18 (b) If In the event an area that is nominated as an 19 enterprise zone pursuant to s. 290.0055 has not yet been 20 designated pursuant to s. 290.0065, a municipality may enact 21 an ordinance for such exemption; however, the ordinance shall 22 not be effective until such area designated pursuant to s. 23 290.0065. 24 (c) This subsection shall expire and be void on 25 December 31, 2005, except that any qualified business which 26 has satisfied the requirements of this subsection prior to 27 December 31, 2005, shall be allowed the full benefit of the 28 exemption allowed under this subsection as if this subsection 29 had not expired on December 31, 2005. 30 31 6 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 (9)(10) A municipality may levy a tax on the purchase 2 of telecommunication services as defined in s. 203.012 as 3 follows: 4 (a)1. Only upon purchases within the municipality of 5 local telephone service as defined in s. 203.012(3) at a rate 6 not to exceed 10 percent of the monthly recurring customer 7 service charges, excluding public telephone charges collected 8 on site, access charges, and any customer access line charges 9 paid to a local telephone company; or 10 2. Only upon purchases within the municipality of 11 telecommunications service that which originates and 12 terminates in this state at a rate not to exceed 7 percent of 13 the total amount charged for any telecommunications service 14 the source of which is ascribed to the municipality on the 15 basis of billing address or service address as used 16 consistently by the seller, provided within the municipality 17 or, if the location of the telecommunications service provided 18 cannot be determined, the total amount billed for such 19 telecommunications service to a telephone or telephone number, 20 a telecommunications number or device, or a customers' billing 21 address located within the municipality, excluding public 22 telephone charges collected on site, charges for any foreign 23 exchange service or any private line service except when such 24 services are used or sold as a substitute for any telephone 25 company switched service or dedicated facility by which a 26 telephone company provides a communication path, access 27 charges, and any customer access line charges paid to a local 28 telephone company. However, telecommunications service as 29 defined in s. 203.012(5)(b) shall be taxed only on the monthly 30 recurring customer service charges excluding variable usage 31 charges. 7 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 (b) For the purpose of compensating the seller, the 2 seller shall be allowed 1 percent of the amount of the tax 3 collected and due to the municipality in the form of a 4 deduction from the amount collected for remittance. The 5 deduction shall be allowed as compensation for the keeping of 6 records and for the collection of, and the remitting of, the 7 tax. 8 (c) A municipality shall elect by ordinance the tax 9 specified in subparagraph (a)1. or subparagraph (a)2., and any 10 such election shall not be changed until after the expiration 11 of at least 12 months after the effective date of the 12 ordinance levying the tax specified in such subparagraph. A 13 municipality shall notify the companies responsible for 14 collecting such tax at least 120 days prior to such change of 15 election. 16 (d) A municipality electing by ordinance the tax 17 specified in subparagraph (a)2. shall provide to a 18 telecommunications service provider who is responsible for 19 collecting the tax, upon its request, a printed alphabetical 20 listing of all street names including block numbers and street 21 numbers for streets which cross or form municipal boundaries 22 within the municipality for use by the provider of the 23 telecommunications service in calculating the proper amount of 24 tax payable to the municipality. The municipality shall be 25 responsible for updating this listing as changes occur and for 26 providing this information to the telecommunications service 27 provider. The provider, in turn, shall be responsible for 28 charging the tax only to service and billing addresses 29 contained in this listing. The municipality shall be entitled 30 to collect a fee not to exceed the actual cost of providing 31 8 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 the information to the telecommunications service provider 2 requesting it. 3 (c)(e) A municipality may audit the records of any 4 provider of telecommunications service taxable by the such 5 municipality under s. 166.234.; each such provider shall 6 provide to the municipality, upon 60 days' notice, access to 7 all applicable records for such telecommunications service. 8 In an audit, the telecommunications service provider shall be 9 liable only for its taxable accounts collected corresponding 10 to the information provided to it by the municipality. 11 However, any information received by the municipality or its 12 agent in connection with such audit is confidential and exempt 13 from the provisions of s. 119.07(1). 14 (d)(f)1. If the sale of a taxable telecommunication 15 service also involves the sale of an exempt cable television 16 service, the tax shall be applied to the value of the taxable 17 service when it is sold separately. 18 2. If the company does not offer this service 19 separately, the consideration paid shall be separately 20 identified and stated with respect to the taxable and exempt 21 portions of the transaction as a condition of the exemption. 22 3. The amounts identified as taxable in subparagraph 23 2. shall not be less than the statewide average tariff rates 24 set forth by the local exchange telecommunications companies 25 in the tariffs filed with the Public Service Commission on 26 January 1, 1995, and on January 1 of each year thereafter for 27 the equivalent services subject to this section. The Public 28 Service Commission shall publish the statewide average tariff 29 rates annually, beginning on January 1, 1996. 30 4. If the total amount of municipal utility tax 31 collected by a municipality or charter county from 9 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 telecommunication services pursuant to this subsection for the 2 period of July 1, 1995, to June 30, 1996, is less than the 3 amount collected for the period July 1, 1994, to June 30, 4 1995, the municipality or charter county shall assess each 5 company that remits such tax a pro rata share of the 6 shortfall. The shortfall shall be prorated based on the 7 amount of tax remitted by each company for the period July 1, 8 1995, to June 30, 1996, and the total amount of tax remitted 9 for the same period. By September 1, 1996, the municipality 10 or charter county shall certify to each company the amount of 11 additional tax owed and the tax shall be remitted to the 12 municipality or charter county by October 1, 1996. Provided, 13 however, that this assessment may only be imposed if, in 14 addition to the conditions above, a municipality or charter 15 county has levied the applicable maximum tax rate allowed 16 under this paragraph during the period July 1, 1995, and June 17 30, 1996, and has not switched between the two options allowed 18 under subparagraph (f)1. or subparagraph (f)2. during the 19 period July 1, 1995, and June 30, 1996. 20 (e) Purchases of local telephone service or other 21 telecommunications service for use in the conduct of a 22 telecommunications service for hire or otherwise for resale 23 are exempt from the tax imposed by this subsection. 24 (9) A purchaser who claims an exemption under 25 subsection (4), subsection (5), or paragraph (8)(e) shall 26 certify to the seller that he or she qualifies for the 27 exemption, which certification may encompass all purchases 28 after a specified date or other multiple purchases. For 29 purchases made under paragraph (8)(e) which are exempted upon 30 the presentation of a certificate from the tax imposed by 31 chapter 212, the certification required by this subsection may 10 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 be satisfied by presentation of a certificate that satisfies 2 the requirements of chapter 212. A seller accepting the 3 certification required by this subsection is relieved of the 4 obligation to collect and remit tax; however, a governmental 5 body that is exempt from the tax authorized by this section 6 may not be required to furnish such certification, and a 7 seller is not required to collect tax from such an exempt 8 governmental body. 9 Section 3. Section 166.233, Florida Statutes, is 10 created to read: 11 166.233 Public service tax; effective dates; 12 procedures for informing sellers of tax levies and related 13 information.-- 14 (1) As used in this section, ss. 166.231, 166.232, and 15 166.234, the term: 16 (a) "Address database" means a database created by the 17 department from information provided by the municipalities as 18 prescribed in paragraphs (4)(a)-(c). 19 (b) "Department" means the Department of Revenue or 20 its designated agent. 21 (c) "Effective date" with respect to any levy, repeal 22 of a levy, or update to a list required under this section 23 means the effective date of the related obligation or change 24 in the obligation of sellers to collect the tax; however, with 25 respect to taxable service that is regularly billed on a 26 monthly cycle basis, each levy, repeal, or update applies to 27 any bill dated on or after the effective date of such event. 28 (d) "Levy" means and includes the imposition of a tax 29 under s. 166.231 or s. 166.232, all changes in the rate of a 30 tax imposed under either of those sections, and all changes of 31 election under s. 166.231(8)(a). 11 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 (e) "Seller" means a person who sells a service that 2 is subject to a levy. 3 (2)(a) A tax levy must be adopted by ordinance, and 4 the effective date of every levy or repeal thereof must be a 5 subsequent January 1 or July 1. A municipality shall notify 6 the department of the adoption or repeal of a levy at least 7 120 days before the effective date thereof. Such notification 8 must be furnished in a manner prescribed by the department and 9 must specify the services taxed under s. 166.231 or s. 10 166.232, including any election under s. 166.231(8)(a), the 11 rate of tax applied to each service, the effective date of the 12 levy or repeal thereof, and the name, mailing address, and 13 telephone number of a person designated by the municipality to 14 respond to inquiries concerning the tax. In addition, the 15 municipality shall furnish the department address information 16 as required under subsections (4) and (5). The department 17 shall maintain this information for the purposes of seller 18 notification, database maintenance, and responses to inquiries 19 with respect thereto. Any person may request, in writing, such 20 information from the department. For purposes of this section, 21 a response to such a person is timely if in writing and dated 22 no later than 20 days after the receipt of the request. The 23 department has no liability for any loss of or decrease in 24 revenue by reason of any error, omission, or untimely action 25 that results in the nonpayment of the tax imposed by ss. 26 166.231 and 166.232. The provisions of this paragraph which 27 prescribe effective dates and require municipalities to 28 furnish notifications and address information to the 29 department do not apply to taxes levied on service, other than 30 telecommunication service, provided by the municipality 31 12 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 levying the tax or by a separate utility authority, board, or 2 commission of the municipality. 3 (b) The department may contract with a private entity 4 to maintain and furnish to sellers the information described 5 in paragraph (a). 6 (3) A municipality shall provide to any person, within 7 10 days following receipt of the person's written request, a 8 copy of the ordinance adopting any levy and all amendments 9 thereto. 10 (4) The address database must be available to sellers 11 electronically at no charge. The address database, or portions 12 thereof, must be available in another medium, and the 13 department shall publish the types of media on which the 14 address database described in this subsection are available, 15 the charges, if any, for supplying the information in each 16 available medium, and the address to which a request for such 17 information should be transmitted. Within 20 days after its 18 receipt of a written request for such information, accompanied 19 by payment of the cost, if any, the department must transmit 20 the information to the person who has requested it. 21 (5) For each municipality, the address database must 22 contain: 23 (a) For all street addresses located within the 24 municipality, each street name, including street name aliases, 25 street address number ranges, leading or trailing 26 directionals, all city names, and zip codes associated with 27 each street name, as approved by the United States Postal 28 Service for the delivery of mail. For a range of street 29 address numbers located within a municipality which consists 30 only of odd or even street numbers, the address database must 31 13 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 specify whether the street numbers in the range are odd or 2 even; 3 (b) Each postal zip code and all the city names 4 associated therewith, as approved by the United States Postal 5 Service for the delivery of mail, for all zip codes assigned 6 to geographic areas located entirely within the municipality, 7 including zip codes assigned to post office boxes; and 8 (c) All post office box number ranges and the city 9 names and zip codes associated therewith, as approved by the 10 United States Postal Service for the delivery of mail, for all 11 post office boxes located within the municipality, except that 12 post office boxes with postal zip codes entirely within the 13 municipality which are included on the list furnished under 14 paragraph (b) need not be duplicated. 15 16 The information required under this section must include the 17 effective date of any changes. Changes in the format of an 18 address necessitate the creation of a new address record, 19 except that, if there is a change in zip code only, the 20 original address record must be modified to include the new 21 zip code with a new effective date and, in addition, the 22 previous zip code with its corresponding effective date. 23 Historical data must be maintained in the address database for 24 a period of 7 years. The address database must separately 25 identify the additions, deletions, and other changes to the 26 preceding version of the address database. The seller is 27 responsible for charging the tax only to service and billing 28 addresses listed in the database. 29 (6) Each municipality shall provide this information 30 to the department in a format prescribed by the department. 31 The municipality shall provide updates to the address database 14 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 at least 120 days before the January 1 or July 1 on which the 2 database becomes effective. The department shall update the 3 database no later than 90 days before the January 1 or July 1 4 on which the changes are effective. Any changes to the address 5 database which are made less than 90 days before January 1 or 6 July 1 become effective on the following July 1 or January 1, 7 respectively. 8 (7) The obligation of a seller to collect and remit 9 the tax for any municipality is conditioned upon the timely 10 availability to the seller of accurate information as 11 described in subsections (2)-(6) in the manner prescribed in 12 those subsections. For purposes of determining the timeliness 13 of such information, the date of a request, response, update, 14 or other transmittal is the date received. If any such 15 information is not timely furnished to a seller, any related 16 obligation to collect and remit tax is suspended during the 17 period of delay, except that: 18 (a) If a request for information described in 19 subsections (2)-(6) precedes the date on which the department 20 is required to update the address database as prescribed in 21 subsection (6), the lack of a timely response to the request 22 does not affect the seller's obligation to collect and remit 23 tax for that municipality. 24 (b) If a seller is collecting and remitting tax on a 25 taxable service from customers within a municipality as of the 26 date of any request for information under subsections (2)-(6), 27 the lack of a timely response to the request does not affect 28 the seller's obligation to continue collecting and remitting 29 the tax levied on the same service from the same customers. 30 (c) If a failure to furnish timely information under 31 subsections (2)-(6) causes a delay in a seller's receipt of a 15 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 list or update required by subsections (2), (4), (5), and (6) 2 to a date less than 90 days before the effective date of a 3 levy or update, the obligation to collect and remit tax 4 pursuant to the revised levy may not commence until the next 5 subsequent January 1 or July 1. 6 (8) If it is determined from lists or updates 7 furnished under subsection (6) that more than one municipality 8 claims the same address or group of addresses, the department 9 shall notify the municipalities affected within 30 days after 10 receipt of the duplicative information. Upon resolution of the 11 competing claims, the affected municipalities shall furnish 12 the department with a signed agreement describing the 13 resolution. The department shall update the address database 14 pursuant to the agreement as of the next ensuing January 1 or 15 July 1 that is at least 120 days after its receipt of the 16 signed agreement. The seller has no liability to any affected 17 municipality for amounts not collected and remitted before the 18 agreement was implemented, except to the extent that the 19 seller's previous tax treatment was confirmed as correct in 20 the agreement. 21 (9) By submitting a written request and the relevant 22 formatting information, municipalities can elect to have the 23 address information formatted to the United States Postal 24 Service database for the delivery of mail by the department. 25 The department shall notify the municipalities within 30 days 26 of any address that cannot be matched to the postal database 27 so that the municipality may investigate the problem. The 28 department shall update the database once the address is 29 properly identified and formatted in accordance with the 30 postal database. The effective date for such addresses is the 31 16 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 next ensuing January 1 or July 1 that is at least 90 days 2 after the department updates its database. 3 Section 4. Section 166.234, Florida Statutes, is 4 created to read: 5 166.234 Public service tax; administrative provisions; 6 rights and remedies.-- 7 (1) A municipality may, during the seller's normal 8 business hours at the official location of the seller's books 9 and records, audit the records of any seller of a service that 10 is taxable by the municipality under s. 166.231 or s. 166.232, 11 for the purpose of ascertaining the correctness of any return 12 that has been filed or payment that has been made, if the 13 municipality's power to assess tax or grant a refund is not 14 barred by the applicable limitations period. Each such seller 15 must provide to the municipality, upon 60 days' written 16 notice, access to applicable records for such service, except 17 that extensions of this 60-day period must be granted if 18 reasonably requested by the seller. If either the municipality 19 or the seller requires an additional extension, it must give 20 notice to the other no less than 30 days before the existing 21 extension expires, except in cases of bona fide emergency or 22 waiver of the notice requirement by the other party. In an 23 audit, the seller is liable only for its taxable accounts 24 collected which correspond to the information provided to it 25 by the department under s. 166.233. As used in this section, 26 the term "applicable records" means records kept in the 27 ordinary course of business which establish the collection and 28 remittance of taxes due. A municipality may not charge any 29 seller for costs or expenses associated with an audit. An 30 employee or agent of a municipality may not be paid, 31 17 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 evaluated, or promoted on the basis of the amount of taxes 2 assessed or tax proceeds collected from sellers. 3 (2) Each seller of services that are taxable under s. 4 166.231 or s. 166.232 shall preserve applicable records 5 relating to such taxes until the expiration of the time within 6 which the municipality may make an assessment with respect to 7 that tax; however, a seller is not required to retain 8 duplicative or redundant records. 9 (3) Before auditing a seller under subsection (1), the 10 municipality shall, upon request of the seller, discuss with 11 the seller the municipality's proposed audit methodology. The 12 municipality shall prepare and furnish to the seller a report 13 of each audit which identifies the nature of any deficiency or 14 overpayment, the amount thereof, and the manner in which the 15 amount was computed. In addition, the municipality, upon 16 request and no less than 45 days before issuing a 17 determination under subsection (7), shall furnish the seller 18 with all other information or material in possession of the 19 municipality or its agents which is necessary to supplement 20 the audit findings, including any computer program or software 21 that pertains to or was used in the conduct of the audit and 22 the computation of the deficiency or overpayment. However, if 23 the identical computer program or software that was used in 24 conducting the audit is nontransferrable, the municipality 25 must furnish the seller with sufficient information to enable 26 the seller to procure such program or software. 27 (4) A municipality may issue a proposed assessment of 28 tax levied under s. 166.231 or s. 166.232 within 3 years after 29 the date the tax was due. A seller may apply to a municipality 30 for refund of, or may take a credit for, any overpayment of 31 such tax thereon within 3 years following remittance by the 18 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 seller, and the municipality must refund or allow the seller 2 credit for such overpayments as were remitted to the 3 municipality. Upon expiration of these 3-year periods, the 4 municipality's right to assess tax and the seller's right to 5 apply for a refund or credit expire and are barred, unless 6 fraud has occurred; however, sellers and municipalities may 7 enter into agreements to extend these periods. 8 (5) Notwithstanding subsection (4), a municipality 9 shall offset a seller's overpayment of any tax revealed by an 10 audit against any deficiency of such tax which is determined 11 to be due for the same audit period, and such offsets must be 12 reflected in any proposed assessment of tax. If the 13 overpayments by the seller exceed the deficiency, the 14 municipality must refund to the seller the amount by which the 15 aggregate overpayments exceed the total deficiency. Absent 16 proof to the contrary, the methodology that is employed in 17 computing the amount of a deficiency is presumed to yield an 18 appropriate computation of the amount of any overpayments. As 19 used in subsection (4) and this subsection, the term 20 "overpayment" to a municipality means and includes all 21 remittances of public service tax which were not owed to the 22 municipality, including amounts properly collected but 23 remitted to the incorrect municipality, except that the term 24 does not include remittances of amounts collected in error. 25 (6) Any purchaser of a service may request from a 26 seller a refund of, or credit for, taxes collected from the 27 purchaser upon the ground that the amounts collected were not 28 due to any municipality. The seller shall issue the refund or 29 allow a credit to the purchaser entitled thereto, if the 30 request is made within 3 years following collection of the tax 31 from the purchaser. In any event, a seller shall issue a 19 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 refund or credit to a purchaser following the seller's 2 determination that taxes collected from that purchaser within 3 the preceding 3 years were not due to any municipality. 4 (7) Any proposed assessment or finding of amounts due 5 the seller constitutes a determination of the municipality for 6 purposes of this section. A determination must separately 7 state the amounts of tax claimed to be due or to be refunded, 8 must be accompanied by a written narrative explanation of the 9 basis for the municipality's determinations, must inform the 10 seller of the remedies available to it if it disagrees with 11 any such determination, and must state the consequences of the 12 seller's failure to comply with any demand of the municipality 13 which is stated in the determination. 14 (8) A seller may file with the municipality a written 15 protest of any determination within 60 days after the 16 determination is issued. The municipality must consider the 17 protest and must, within 60 days, issue a written notice of 18 decision to the seller. The seller may petition the 19 municipality for reconsideration of a notice of decision 20 within 30 days after the issuance of the notice, and, 21 following reconsideration of such a petition, the municipality 22 must, within 30 days, issue a written notice of 23 reconsideration to the seller. 24 (9) A determination becomes final 60 days after the 25 date of issuance, unless the seller, before the 60-day period 26 expires, has filed a protest or secured a written extension of 27 time within which to file a protest. If the seller has secured 28 a written extension of time and fails to file a protest within 29 the extended time period, the proposed assessment becomes a 30 final assessment at the expiration of the extended filing 31 period. If a protest is timely filed and the seller and the 20 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 municipality are unable to resolve the disputed issues, the 2 determination becomes final as of the date of issuance of the 3 notice of decision, unless the seller timely files a petition 4 for reconsideration. If a petition for reconsideration is 5 timely filed, the determination becomes final upon issuance of 6 a notice of reconsideration. 7 (10) A notice of decision or a notice of 8 reconsideration must address each issue raised in the protest 9 or petition, must explain the reasoning underlying the 10 conclusions reached, and must advise the seller of the 11 remedies available to it if it disagrees with the 12 municipality's disposition of the issues. 13 (11) A seller may contest the legality of any 14 determination by filing an action in circuit court within 60 15 days after the date the determination becomes final. However, 16 in any action filed in circuit court to contest the legality 17 of any tax assessed under this section, the plaintiff must pay 18 the municipality the amount of the tax which is not being 19 contested by the seller. Venue lies in the county where the 20 municipality is located. The defendant in any such action is 21 the municipality. 22 (12) A seller's failure to protest a determination 23 under this section administratively or judicially does not 24 waive or impair the seller's right to seek refund of any 25 overpayment within the time allowed under subsection (4). 26 (13) A seller's liability for any tax may be settled 27 or compromised by the municipality upon the grounds of doubt 28 as to liability or doubt as to the collectibility of the tax. 29 In addition, municipalities may enter into settlements 30 prescribing the future tax treatment of specified 31 transactions. A municipality and a seller may enter into a 21 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 written closing agreement that reflects the terms of any 2 settlement or compromise. When such a closing agreement has 3 been approved on behalf of the municipality and the seller, it 4 is final, conclusive, and binding on the parties with respect 5 to all matters set forth therein; and, except upon a showing 6 of fraud or misrepresentation of material fact, additional 7 assessment may not be made against the seller for the tax 8 specified in the closing agreement for the time period 9 specified in the closing agreement, and the seller may not 10 institute any judicial or administrative proceeding to recover 11 any tax paid under the closing agreement. In issuing a 12 determination, a municipality must include in its notification 13 thereof to the seller the names of the persons authorized to 14 approve compromises and to execute closing agreements. A 15 municipality may also enter into agreements for scheduling 16 payments of taxes which agreements must recognize both the 17 seller's financial condition and the best interests of the 18 municipality, if the seller gives accurate, current 19 information and meets all other tax obligations on schedule. 20 (14) All determinations, notices of decision, and 21 notices of reconsideration issued under this section must be 22 transmitted to the seller by certified mail, return receipt 23 requested, and the date of issuance is the postmark date of 24 the transmittal. All protests and petitions for 25 reconsideration are timely filed if postmarked or received by 26 the municipality within the time prescribed by this section. 27 If mailed, protests and petitions must be transmitted by 28 certified mail, return receipt requested. 29 (15) A seller may pay any contested amount, in whole 30 or in part, at any time, and the payment does not impair any 31 of the seller's remedies as provided in this section. 22 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 (16) Each municipality that levies the public service 2 tax shall furnish sellers with prompt, accurate responses to 3 questions and to requests for tax assistance. 4 (17) In all matters connected with the administration 5 of the public service tax, sellers have the right: 6 (a) To be represented by counsel or other qualified 7 representatives; 8 (b) To procedural safeguards with respect to the 9 recording of interviews during tax determination processes 10 conducted by the municipality; and 11 (c) To have audits, inspections of records, and 12 interviews conducted at a reasonable time and place. 13 (18) A municipality may not require any report, 14 return, or payment of public service tax to be submitted on a 15 date other than as required under chapter 212. 16 Section 5. (1) No later than September 1, 1997, each 17 municipality levying a tax under section 166.231 or section 18 166.232, Florida Statutes, shall furnish to the Department of 19 Revenue a notification that specifies the services taxed by 20 the municipality under section 166.231 or section 166.232, 21 Florida Statutes, including any election under section 22 166.231(8)(a), Florida Statutes; the rate of tax applied to 23 each service; the effective date of the levy; and the name, 24 mailing address, and telephone number of a person designated 25 by the municipality to respond to inquires concerning the tax. 26 The notification must include such information for levies with 27 prior and future effective dates. 28 (2) Address listings and updates that conform to the 29 requirements of section 166.231(9)(d), Florida Statutes, as in 30 effect before July 1, 1997, are in compliance with this act 31 until December 31, 1998. By January 1, 1998, each municipality 23 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 shall make available to the department address information 2 that conforms to the requirements of this act and, if it 3 elects to have the department format such addresses to the 4 United States Postal Service database, the municipality must 5 so specify. The department must notify municipalities of any 6 addresses that have been claimed by multiple jurisdictions and 7 those that cannot be matched to the postal database as 8 provided, respectively, in subsections 166.231(7) and (8). The 9 updated address database must be made available to 10 municipalities for review by June 1, 1998, and to sellers by 11 July 1, 1998, and is effective January 1, 1999. Updates may be 12 issued with an effective date of January 1, 1999, if the lists 13 are received by the department by September 1, 1998. The 14 department shall update the database by October 1, 1998, for 15 the revisions. 16 (3) Section 166.234, Florida Statutes, as created by 17 this act, applies to all taxes, assessments, and audits for 18 periods both before and after the effective date of this act, 19 except for provisions requiring the performance of acts prior 20 to the commencement of an audit and except for taxes and 21 assessments that have been resolved by concession of liability 22 and payment, by settlement, or by other means. In addition, in 23 the case of audits that are the subject of pending litigation 24 as of the effective date of this section, the requirements and 25 limitations of section 166.234(3), (8)-(12), and (15), Florida 26 Statutes, do not apply to determinations, as defined by 27 section 166.234(8), Florida Statutes, issued before the 28 commencement of such litigation. 29 Section 6. The sum of $100,000 is appropriated to the 30 Department of Revenue from the Administrative Trust Fund for 31 fiscal year 1997-1998, and one full-time-equivalent position 24 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1275 225-196-97 1 is authorized, for the purpose of performing the functions 2 identified in section 166.233(2), Florida Statutes, as created 3 by this act. 4 Section 7. If any provision of this act or the 5 application thereof to any person or circumstance is held 6 invalid, the invalidity shall not affect other provisions or 7 applications of the act which can be given effect without the 8 invalid provision or application, and to this end the 9 provisions of this act are declared severable. 10 Section 8. This act shall take effect July 1, 1997. 11 12 ***************************************** 13 SENATE SUMMARY 14 Pertains to the municipal public service tax. Provides legislative intent. Provides that specified governmental 15 bodies are exempt from the tax. Provides that religious institutions that possess sales tax exemption 16 certificates are exempt from the municipal public service tax and from the tax on telecommunication services. 17 Provides for the liability of sellers for taxes that are not remitted. Requires purchasers claiming exemptions to 18 certify that they are qualified therefor. Provides requirements for levy of the tax. Specifies effective 19 dates. Provides duties of the Department of Revenue. Requires municipalities to furnish certain information 20 relating to the tax to the Department of Revenue and to other persons. Provides for fees. Provides limitations on 21 the responsibilities of sellers if information is not furnished as required. Provides procedures that apply 22 when more than one municipality claims an address. Provides procedures for audits by municipalities of 23 sellers of services. Prescribes record retention requirements for sellers. Provides time limitations on 24 assessments of taxes and on applications for refunds or credits. Provides for offsets of overpayments against 25 underpayments and for refunds and credits. Provides requirements with respect to a determination by a 26 municipality of amounts of tax. Provides protest procedures and judicial remedies. Provides for settlement 27 or compromise of a seller's liability for taxes. Provides rights and duties of municipalities and sellers. Provides 28 that public service tax payment and return filing dates must conform to due dates established under ch. 212, F.S. 29 Provides a schedule for application of the requirements of the act. Provides an appropriation. Provides for 30 severability. 31 25