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House Bill 1275c1

Florida House of Representatives - 1997 CS/HB 1275 By the Committee on Finance & Taxation and Representatives Valdes, Edwards, Lacasa, Garcia, Villalobos, Barreiro, Morse and Meek 1 A bill to be entitled 2 An act relating to taxation; providing 3 legislative intent with respect to the 4 municipal public service tax; amending s. 5 166.231, F.S.; providing that specified 6 governmental bodies are exempt from said tax; 7 exempting certain religious institutions from 8 the tax on telecommunication services; 9 providing that state universities shall not be 10 deemed sellers of taxable items under certain 11 circumstances; revising provisions relating to 12 determination of the situs of telecommunication 13 services; providing requirements for returns 14 and remittance of the tax on telecommunication 15 services; requiring certain purchasers claiming 16 exemptions to certify that they are qualified 17 therefor; requiring governmental bodies that 18 sell taxable services to nonexempt users to 19 collect and remit the tax; creating s. 166.233, 20 F.S.; providing requirements for levy of the 21 tax; specifying effective dates; providing 22 duties of the Department of Revenue; requiring 23 municipalities to furnish certain information 24 relating to the tax to the Department of 25 Revenue and to other persons; providing for 26 fees; providing limitations on the 27 responsibilities of sellers if information is 28 not furnished as required; providing procedures 29 that apply when more than one municipality 30 claims an address or when information does not 31 conform to the seller's address records; 1 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 creating s. 166.234, F.S.; providing procedures 2 for audits of sellers by municipalities; 3 prohibiting contingent fee audits; prescribing 4 record retention requirements for sellers; 5 providing time limitations on assessments of 6 taxes and on applications for refunds or 7 credits; providing for offsets of overpayments 8 against underpayments and for refunds and 9 credits; authorizing municipalities to assess 10 interest and penalties; providing requirements 11 with respect to a determination by a 12 municipality of amounts of tax; providing 13 protest procedures and judicial remedies; 14 providing for settlement or compromise of a 15 seller's liability for taxes; providing for 16 interest on refunds if a law is enacted 17 requiring interest on sales or gross receipts 18 tax refunds; providing rights and duties of 19 municipalities and sellers; providing for 20 communications between municipalities with 21 respect to specified matters relating to audits 22 and the identities of sellers; prescribing the 23 circumstances for assessment of audit expenses 24 against a seller; providing a schedule for 25 application of the requirements of the act; 26 amending ss. 203.01 and 203.63, F.S., relating 27 to taxes on gross receipts for utility services 28 and on interstate and international 29 telecommunication services; specifying that 30 certain sums charged as taxes under said 31 sections and under ch. 212, F.S., shall not be 2 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 subject to refund, notwithstanding requirements 2 relating to separate statement of such taxes on 3 bills or invoices; providing legislative 4 intent; providing an appropriation; providing 5 for severability; providing an effective date. 6 7 Be It Enacted by the Legislature of the State of Florida: 8 9 Section 1. It is the intent of the Legislature to 10 improve the ability of municipalities and sellers to 11 administer the municipal public service tax at reasonable 12 cost, to protect sellers who act in good faith, to improve the 13 information furnished to sellers to facilitate remitting 14 collected tax proceeds to the correct municipality, and to 15 prescribe a procedural framework for administration and 16 auditing functions. The Legislature finds that this act 17 fulfills an important state interest. 18 Section 2. Section 166.231, Florida Statutes, 1996 19 Supplement, is amended to read: 20 166.231 Municipalities; public service tax.-- 21 (1)(a) A municipality may levy a tax on the purchase 22 of electricity, metered natural gas, liquefied petroleum gas 23 either metered or bottled, manufactured gas either metered or 24 bottled, and water service. The tax shall be levied only upon 25 purchases within the municipality and shall not exceed 10 26 percent of the payments received by the seller of the taxable 27 item from the purchaser for the purchase of such service. 28 Municipalities imposing a tax on the purchase of cable 29 television service as of May 4, 1977, may continue to levy 30 such tax to the extent necessary to meet all obligations to or 31 for the benefit of holders of bonds or certificates which were 3 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 issued prior to May 4, 1977. Purchase of electricity means 2 the purchase of electric power by a person who will consume it 3 within the municipality. 4 (b) The tax imposed by paragraph (a) shall not be 5 applied against any fuel adjustment charge, and such charge 6 shall be separately stated on each bill. The term "fuel 7 adjustment charge" means all increases in the cost of utility 8 services to the ultimate consumer resulting from an increase 9 in the cost of fuel to the utility subsequent to October 1, 10 1973. 11 (2) Services competitive with those enumerated in 12 subsection (1) or subsection (9), as defined by ordinance, 13 shall be taxed on a comparable base at the same rates. 14 However, fuel oil shall be taxed at a rate not to exceed 4 15 cents per gallon. However, for municipalities levying less 16 than the maximum rate allowable in subsection (1), the maximum 17 tax on fuel oil shall bear the same proportion to 4 cents 18 which the tax rate levied under subsection (1) bears to the 19 maximum rate allowable in subsection (1). 20 (3) A municipality may exempt from the tax imposed by 21 this section any amount up to, and including, the first 500 22 kilowatt hours of electricity purchased per month for 23 residential use. Such exemption shall apply to each separate 24 residential unit, regardless of whether such unit is on a 25 separate meter or a central meter, and shall be passed on to 26 each individual tenant. 27 (4)(a) The purchase of natural gas or fuel oil by a 28 public or private utility, either for resale or for use as 29 fuel in the generation of electricity, or the purchase of fuel 30 oil or kerosene for use as an aircraft engine fuel or 31 4 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 propellant or for use in internal combustion engines is exempt 2 from taxation hereunder. 3 (b) A municipality may exempt from the tax imposed by 4 this section the purchase of metered or bottled gas (natural 5 liquefied petroleum gas or manufactured) or fuel oil for 6 agricultural purposes. As used in this paragraph, 7 "agricultural purposes" means bona fide farming, pasture, 8 grove, or forestry operations, including horticulture, 9 floriculture, viticulture, dairy, livestock, poultry, bee, and 10 aquaculture. 11 (5) Purchases by the United States Government, this 12 state, and all counties, school districts, and municipalities 13 of the state, and by public bodies exempted by law or court 14 order, are exempt from the tax authorized by this section. A 15 municipality may exempt from the tax imposed by this section 16 taxation hereunder the purchase of the taxable items by the 17 United States Government, this state, any other public body as 18 defined in s. 1.01, or by a nonprofit corporation or 19 cooperative association organized under chapter 617 which 20 provides water utility services to no more than 13,500 21 equivalent residential units, ownership of which will revert 22 to a political subdivision upon retirement of all outstanding 23 indebtedness, and shall exempt purchases by any recognized 24 church in this state for use exclusively for church purposes, 25 and shall exempt from the tax authorized by subsection (9) 26 purchases made by any religious institution that possesses a 27 consumer certificate of exemption issued under chapter 212. 28 (6) A municipality may exempt from the tax imposed by 29 this section any amount up to, and including, the total amount 30 of electricity, metered natural gas, liquefied petroleum gas 31 either metered or bottled, or manufactured gas either metered 5 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 or bottled purchased per month, or reduce the rate of taxation 2 on the purchase of such electricity or gas when purchased by 3 an industrial consumer which uses the electricity or gas 4 directly in industrial manufacturing, processing, compounding, 5 or a production process, at a fixed location in the 6 municipality, of items of tangible personal property for sale. 7 The municipality shall establish the requirements for 8 qualification for this exemption in the manner prescribed by 9 ordinance. Possession by a seller of a written certification 10 by the purchaser, certifying the purchaser's entitlement to an 11 exemption permitted by this subsection, relieves the seller 12 from the responsibility of collecting the tax on the 13 nontaxable amounts, and the municipality shall look solely to 14 the purchaser for recovery of such tax if it determines that 15 the purchaser was not entitled to the exemption. Any 16 municipality granting an exemption pursuant to this subsection 17 shall grant the exemption to all companies classified in the 18 same SIC Industry Major Group Number. 19 (7) The tax authorized hereunder shall be collected by 20 the seller of the taxable item from the purchaser at the time 21 of the payment for such service. The seller shall remit the 22 taxes collected to the municipality in the manner prescribed 23 by ordinance, except that remittance of taxes by sellers of 24 telecommunication services shall be governed by paragraph 25 (9)(f). Except as otherwise provided in ss. 166.233 and 26 166.234, the seller shall be liable for taxes that are due and 27 not remitted to the municipality. This shall not bar the 28 seller from recovering such taxes from purchasers; however, 29 the universities in the State University System shall not be 30 deemed a seller of any item otherwise taxable hereunder when 31 6 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 such item is provided to university residences incidental to 2 the provision of educational services. 3 (8) A municipality shall notify in writing any known 4 seller of items taxable hereunder of any change in the 5 boundaries of the municipality or in the rate of taxation. 6 (8)(9)(a) Beginning July 1, 1995, a municipality may 7 by ordinance exempt not less than 50 percent of the tax 8 imposed under this section on purchasers of electrical energy 9 who are determined to be eligible for the exemption provided 10 by s. 212.08(15) by the Department of Revenue. The exemption 11 shall be administered as provided in that section. A copy of 12 any ordinance adopted pursuant to this subsection shall be 13 provided to the Department of Revenue not less than 14 days 14 prior to its effective date. 15 (b) If In the event an area that is nominated as an 16 enterprise zone pursuant to s. 290.0055 has not yet been 17 designated pursuant to s. 290.0065, a municipality may enact 18 an ordinance for such exemption; however, the ordinance shall 19 not be effective until such area designated pursuant to s. 20 290.0065. 21 (c) This subsection shall expire and be void on 22 December 31, 2005, except that any qualified business which 23 has satisfied the requirements of this subsection prior to 24 December 31, 2005, shall be allowed the full benefit of the 25 exemption allowed under this subsection as if this subsection 26 had not expired on December 31, 2005. 27 (9)(10) A municipality may levy a tax on the purchase 28 of telecommunication services as defined in s. 203.012 as 29 follows: 30 (a)1. Only upon purchases within the municipality of 31 local telephone service as defined in s. 203.012(3) at a rate 7 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 not to exceed 10 percent of the monthly recurring customer 2 service charges, excluding public telephone charges collected 3 on site, access charges, and any customer access line charges 4 paid to a local telephone company; or 5 2. Only upon purchases within the municipality of 6 telecommunications service that which originates and 7 terminates in this state at a rate not to exceed 7 percent of 8 the total amount charged for any telecommunications service 9 provided within the municipality or, if the location of the 10 telecommunications service provided cannot be determined as 11 part of the billing process, the total amount billed for such 12 telecommunications service to a telephone or telephone number, 13 a telecommunications number or device, a service address, or a 14 customers' billing address located within the municipality, 15 excluding public telephone charges collected on site, charges 16 for any foreign exchange service or any private line service 17 except when such services are used or sold as a substitute for 18 any telephone company switched service or dedicated facility 19 by which a telephone company provides a communication path, 20 access charges, and any customer access line charges paid to a 21 local telephone company. However, telecommunications service 22 as defined in s. 203.012(5)(b) shall be taxed only on the 23 monthly recurring customer service charges excluding variable 24 usage charges. 25 (b) For the purpose of compensating the seller, the 26 seller shall be allowed 1 percent of the amount of the tax 27 collected and due to the municipality in the form of a 28 deduction from the amount collected for remittance. The 29 deduction shall be allowed as compensation for the keeping of 30 records and for the collection of, and the remitting of, the 31 tax. 8 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 (c) A municipality shall elect by ordinance the tax 2 specified in subparagraph (a)1. or subparagraph (a)2., and any 3 such election shall not be changed until after the expiration 4 of at least 12 months after the effective date of the 5 ordinance levying the tax specified in such subparagraph. A 6 municipality shall notify the companies responsible for 7 collecting such tax at least 120 days prior to such change of 8 election. 9 (d) A municipality electing by ordinance the tax 10 specified in subparagraph (a)2. shall provide to a 11 telecommunications service provider who is responsible for 12 collecting the tax, upon its request, a printed alphabetical 13 listing of all street names including block numbers and street 14 numbers for streets which cross or form municipal boundaries 15 within the municipality for use by the provider of the 16 telecommunications service in calculating the proper amount of 17 tax payable to the municipality. The municipality shall be 18 responsible for updating this listing as changes occur and for 19 providing this information to the telecommunications service 20 provider. The provider, in turn, shall be responsible for 21 charging the tax only to service and billing addresses 22 contained in this listing. The municipality shall be entitled 23 to collect a fee not to exceed the actual cost of providing 24 the information to the telecommunications service provider 25 requesting it. 26 (c)(e) A municipality may audit the records of any 27 provider of telecommunications service taxable by the such 28 municipality under s. 166.234.; each such provider shall 29 provide to the municipality, upon 60 days' notice, access to 30 all applicable records for such telecommunications service. 31 In an audit, the telecommunications service provider shall be 9 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 liable only for its taxable accounts collected corresponding 2 to the information provided to it by the municipality. 3 However, any information received by the municipality or its 4 agent in connection with such audit is confidential and exempt 5 from the provisions of s. 119.07(1). 6 (d)(f)1. If the sale of a taxable telecommunication 7 service also involves the sale of an exempt cable television 8 service, the tax shall be applied to the value of the taxable 9 service when it is sold separately. 10 2. If the company does not offer this service 11 separately, the consideration paid shall be separately 12 identified and stated with respect to the taxable and exempt 13 portions of the transaction as a condition of the exemption. 14 3. The amounts identified as taxable in subparagraph 15 2. shall not be less than the statewide average tariff rates 16 set forth by the local exchange telecommunications companies 17 in the tariffs filed with the Public Service Commission on 18 January 1, 1995, and on January 1 of each year thereafter for 19 the equivalent services subject to this section. The Public 20 Service Commission shall publish the statewide average tariff 21 rates annually, beginning on January 1, 1996. 22 4. If the total amount of municipal utility tax 23 collected by a municipality or charter county from 24 telecommunication services pursuant to this subsection for the 25 period of July 1, 1995, to June 30, 1996, is less than the 26 amount collected for the period July 1, 1994, to June 30, 27 1995, the municipality or charter county shall assess each 28 company that remits such tax a pro rata share of the 29 shortfall. The shortfall shall be prorated based on the 30 amount of tax remitted by each company for the period July 1, 31 1995, to June 30, 1996, and the total amount of tax remitted 10 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 for the same period. By September 1, 1996, the municipality 2 or charter county shall certify to each company the amount of 3 additional tax owed and the tax shall be remitted to the 4 municipality or charter county by October 1, 1996. Provided, 5 however, that this assessment may only be imposed if, in 6 addition to the conditions above, a municipality or charter 7 county has levied the applicable maximum tax rate allowed 8 under this paragraph during the period July 1, 1995, and June 9 30, 1996, and has not switched between the two options allowed 10 under subparagraph (f)1. or subparagraph (f)2. during the 11 period July 1, 1995, and June 30, 1996. 12 (e) Purchases of local telephone service or other 13 telecommunications service for use in the conduct of a 14 telecommunications service for hire or otherwise for resale 15 are exempt from the tax imposed by this subsection. 16 (f) A seller of services which are subject to the tax 17 imposed by a municipality under this subsection shall file a 18 return with the municipality each month. The form of the 19 return shall be determined by the seller, and the return shall 20 be deemed sufficient if it identifies the name and address of 21 the seller, the period of the return, the amount collected 22 from the sale of taxable services, any collection allowance 23 taken, the amount of tax remitted with the return, and the 24 name and telephone number of a person authorized by the seller 25 to respond to inquiries from municipalities concerning the 26 seller's administration of the tax. A municipality may not 27 require any return or payment of public service tax other than 28 on a date returns and payments of tax are required under 29 chapter 212. However, a municipality may grant an extension of 30 the due date for a return or payment upon written request from 31 the seller. The deduction authorized by paragraph (b) shall 11 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 not be allowed in the event of an untimely return, unless the 2 seller has in writing requested and been granted an extension 3 of time for filing such return. Extensions of time shall be 4 granted if reasonable cause is shown, whether requested before 5 or after the due date of the return. 6 (g) Notwithstanding any other provision of this 7 section, in the event the total amount of tax anticipated to 8 be collected within a calendar quarter does not exceed $120, 9 the seller of such service may, with the written authorization 10 of the municipality, remit the taxes collected during such 11 calendar quarter to the municipality quarterly. In such case, 12 the tax shall be due on or before the 20th day of the month 13 following the end of the calendar quarter in which the taxes 14 were collected. 15 (10) A purchaser who claims an exemption under 16 subsection (4), subsection (5), or paragraph (9)(e) shall 17 certify to the seller that he or she qualifies for the 18 exemption, which certification may encompass all purchases 19 after a specified date or other multiple purchases. For 20 purchases made under paragraph (9)(e) which are exempted, upon 21 the presentation of a certificate, from the tax imposed by 22 chapter 212, the certification required by this subsection may 23 be satisfied by presentation of a certificate that satisfies 24 the requirements of chapter 212. A seller accepting the 25 certification required by this subsection is relieved of the 26 obligation to collect and remit tax; however, a governmental 27 body that is exempt from the tax authorized by this section 28 shall not be required to furnish such certification, and a 29 seller is not required to collect tax from such an exempt 30 governmental body. 31 12 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 (11) Governmental bodies which sell or resell taxable 2 service to nonexempt end users must collect and remit the tax 3 levied under this section. 4 Section 3. Section 166.233, Florida Statutes, is 5 created to read: 6 166.233 Public service tax; effective dates; 7 procedures for informing sellers of tax levies and related 8 information.-- 9 (1) As used in this section and ss. 166.231, 166.232, 10 and 166.234: 11 (a) "Department" means the Department of Revenue or 12 its designated agent. 13 (b) "Effective date," with respect to any levy, repeal 14 of a levy, or update to a list required under this section, 15 means the effective date of the related obligation or change 16 in the obligation of sellers to collect the tax; however, with 17 respect to taxable service that is regularly billed on a 18 monthly cycle basis, each levy, repeal, or update applies to 19 any bill dated on or after the effective date of such event. 20 (c) "Levy" means and includes the imposition of a tax 21 under s. 166.231 or s. 166.232, all changes in the rate of a 22 tax imposed under either of those sections, and all changes of 23 election under s. 166.231(9)(a). 24 (d) "Seller" means a person who sells a service that 25 is subject to a levy. 26 (2)(a) A tax levy must be adopted by ordinance, and 27 the effective date of every levy or repeal thereof must be a 28 subsequent January 1, April 1, July 1, or October 1. A 29 municipality shall notify the department of the adoption or 30 repeal of a levy at least 120 days before the effective date 31 thereof. Such notification must be furnished on a form 13 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 prescribed by the department and must specify the services 2 taxed under the authority of s. 166.231 or s. 166.232, 3 including any election under s. 166.231(9)(a), the rate of tax 4 applied to each service, the effective date of the levy or 5 repeal thereof, and the name, mailing address, and telephone 6 number of a person designated by the municipality to respond 7 to inquiries concerning the tax. The department shall maintain 8 this information for the purpose of responding to inquiries 9 with respect thereto, and any person may in writing request 10 such information from the department. For purposes of this 11 section, a response to such a person is timely if in writing 12 and dated no later than 20 days after the receipt of the 13 request. The department shall charge such persons a fee to 14 recover the actual cost of maintaining and furnishing such 15 information. The department has no liability for any loss of 16 or decrease in revenue by reason of any error, omission, or 17 untimely action that results in the nonpayment of the tax 18 imposed under s. 166.231 or s. 166.232. The provisions of this 19 paragraph which prescribe effective dates and require 20 municipalities to furnish notifications to the department do 21 not apply to taxes levied on service, other than 22 telecommunication service, provided by the municipality 23 levying the tax or by a separate utility authority, board, or 24 commission of the municipality. 25 (b) The department may contract with a private entity 26 to maintain and furnish the information described in paragraph 27 (a); however, the department shall establish the fee charged 28 to persons requesting that information. 29 (3) A municipality shall provide to any person, within 30 20 days following receipt of the person's written request, a 31 copy of the ordinance adopting any levy and all amendments 14 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 thereto, and shall advise such person in writing of the types 2 of media on which the lists described in this subsection are 3 available, the charges, if any, for supplying the lists on 4 each available medium, and the address to which a request for 5 such lists should be transmitted. Within 20 days following 6 receipt of a written request therefor accompanied by payment 7 of the cost, the municipality shall transmit the following to 8 the person requesting them: 9 (a) A list containing each street name, known street 10 name aliases, street address number ranges, applicable 11 directionals, and zip codes associated with each street name, 12 for all street addresses located within the municipality. For 13 a range of street address numbers located within a 14 municipality which consists only of odd or even street 15 numbers, the list must specify whether the street numbers in 16 the range are odd or even. The list shall be alphabetical, 17 except that numbered streets shall be in numerical sequence; 18 (b) A list containing each postal zip code and all the 19 city names associated therewith for all zip codes assigned to 20 geographic areas located entirely within the municipality, 21 including zip codes assigned to post office boxes; and 22 (c) A sequential list containing all post office box 23 number ranges and the city names and zip codes associated 24 therewith, for all post office boxes located within the 25 municipality, except that post office boxes with postal zip 26 codes entirely within the municipality which are included on 27 the list furnished under paragraph (b) need not be duplicated. 28 29 The lists shall be printed, except that, if a list is 30 available on another medium, the municipality shall, upon 31 request, furnish the list on such medium in addition to or in 15 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 lieu of the printed lists. The municipality shall be 2 responsible for updating the lists as changes occur and for 3 furnishing this information to all sellers affected by the 4 changes. Each update shall specify an effective date which 5 shall be either the next ensuing January 1, April 1, July 1, 6 or October 1; shall be furnished to sellers not less than 60 7 days prior to the effective date; and shall identify the 8 additions, deletions, and other changes to the preceding 9 version of the list. The seller shall be responsible for 10 charging the tax only to service and billing addresses 11 contained in the lists which include all the required elements 12 required by this subsection, including lists furnished to it 13 by a municipality without the seller's request. The 14 municipality shall be entitled to collect a fee not to exceed 15 the actual cost of duplicating the information furnished to 16 the person requesting it. 17 (4) The obligation of a seller to collect and remit 18 the tax for any municipality is conditioned upon the timely 19 availability to the seller of accurate information as 20 described in subsections (2) and (3) in the manner prescribed 21 in those subsections. For purposes of determining the 22 timeliness of such information, the date of a request, 23 response, update, or other transmittal is the date received. 24 If any such information is not timely furnished to a seller, 25 any related obligation to collect and remit tax is suspended 26 during the period of delay, except that: 27 (a) If a request for information described in 28 subsection (2) or subsection (3) precedes the date on which a 29 municipality is required to furnish notification to the 30 department as prescribed in subsection (2), the lack of a 31 16 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 timely response to the request does not affect the seller's 2 obligation to collect and remit tax for that municipality. 3 (b) If a seller is properly collecting and remitting 4 tax on a taxable service from customers within a municipality 5 as of the date of any request for information under subsection 6 (2) or subsection (3), the lack of a timely response to the 7 request does not affect the seller's obligation to continue 8 collecting and remitting the tax levied on the same service 9 from the same customers. 10 (c) If a failure to furnish timely information under 11 subsection (2) or subsection (3) causes a delay in a seller's 12 receipt of a list or update required by subsection (3) to a 13 date less than 60 days before the effective date of a levy or 14 update, the obligation to collect and remit tax pursuant 15 thereto may not commence until the next subsequent January 1, 16 April 1, July 1, or October 1. 17 (5) If it is determined from lists or updates 18 furnished under subsection (3) that more than one municipality 19 claims the same address or group of addresses, the seller 20 shall notify the municipalities affected within 60 days. Upon 21 resolution of the competing claims, the affected 22 municipalities shall furnish the seller with a signed 23 agreement describing the resolution. The seller shall begin 24 collecting and remitting tax pursuant to the agreement as of 25 the next ensuing January 1, April 1, July 1, or October 1 that 26 is at least 60 days after its receipt of the signed agreement. 27 Prior to such date, the seller shall continue its prior tax 28 treatment of charges to customers with addresses subject to 29 competing claims. For purposes of this subsection, "prior tax 30 treatment" means the practice of collecting and remitting or 31 not collecting and remitting tax during periods prior to 17 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 discovery of the competing claims. The seller has no liability 2 to any affected municipality for amounts not collected and 3 remitted before the agreement was implemented, except to the 4 extent that the seller's prior tax treatment was confirmed as 5 correct in the agreement. 6 (6) If a list or update furnished pursuant to 7 subsection (3) contains all the elements required by that 8 subsection, but such information does not conform with address 9 information in the seller's records, the seller may so notify 10 the municipality that furnished the list or update. The 11 notification shall identify the portion of the list or update 12 that is in question and describe the nature of the problem. If 13 the seller furnishes such a notification within 60 days after 14 first receiving the list or update from the municipality, the 15 seller shall not be obligated to collect and remit the tax 16 with respect to the portion of the list or update at issue 17 until the next ensuing January 1, April 1, July 1, or October 18 1 which is at least 60 days after the municipality furnishes 19 the seller with information which resolves the issue raised by 20 the seller. 21 Section 4. Section 166.234, Florida Statutes, is 22 created to read: 23 166.234 Public service tax; administrative provisions; 24 rights and remedies.-- 25 (1) A municipality may, during the seller's normal 26 business hours at the official location of the seller's books 27 and records, audit the records of any seller of a service that 28 is taxable by the municipality under s. 166.231 or s. 166.232, 29 for the purpose of ascertaining whether taxable services have 30 been provided or the correctness of any return that has been 31 filed or payment that has been made, if the municipality's 18 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 power to assess tax or grant a refund is not barred by the 2 applicable limitations period. Each such seller must provide 3 to the municipality, upon 60 days' written notice of intent to 4 audit from the municipality, access to applicable records for 5 such service, except an extension of this 60-day period must 6 be granted if reasonably requested by the seller. The seller 7 may at its option waive the 60-day notice requirement. If 8 either the municipality or the seller requires an additional 9 extension, it must give notice to the other no less than 30 10 days before the existing extension expires, except in cases of 11 bona fide emergency or waiver of the notice requirement by the 12 other party. In an audit, the seller is liable only for its 13 taxable accounts collected which correspond to the information 14 provided to it by the municipality under s. 166.233(3). As 15 used in this section, "applicable records" means records kept 16 in the ordinary course of business which establish the 17 collection and remittance of taxes due. Such applicable 18 records may be provided to the municipality on an electronic 19 medium if agreed to by the seller and the municipality. No 20 fee or any portion of a fee for audits conducted on behalf of 21 a municipality shall be based upon the amount assessed or 22 collected as a result of the audit, and no determination based 23 upon an audit conducted in violation of this prohibition shall 24 be valid. 25 (2) Each seller of services that are taxable under s. 26 166.231 or s. 166.232 shall preserve applicable records 27 relating to such taxes until the expiration of the time within 28 which the municipality may make an assessment with respect to 29 that tax; however, a seller is not required to retain 30 duplicative or redundant records. 31 19 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 (3) Before auditing a seller under subsection (1), the 2 municipality shall, upon request of the seller, discuss with 3 the seller the municipality's proposed audit methodology. The 4 municipality shall prepare and furnish to the seller a report 5 of each audit which identifies the nature of any deficiency or 6 overpayment, the amount thereof, and the manner in which the 7 amount was computed. In addition, the municipality, upon 8 request and no less than 45 days before issuing a 9 determination under subsection (8), shall furnish the seller 10 with all other information or material in possession of the 11 municipality or its agents which is necessary to supplement 12 the audit findings. 13 (4)(a) A municipality may issue a proposed assessment 14 of tax levied under s. 166.231 or s. 166.232 within 3 years 15 after the date the tax was due. However, this limitation is 16 tolled for 1 year if within the 3-year period the municipality 17 issues to the seller a notice of intent to audit. If the 18 audit cannot be completed prior to the expiration of this 19 limitation period as extended by tolling, and such condition 20 is due to the seller's refusal or delay in allowing access to 21 applicable records, the municipality may make a proposed 22 assessment from an estimate based upon the best information 23 available for the taxable period, unless the seller agrees in 24 writing to extend the limitations period. The municipality 25 may also make a proposed assessment from such an estimate if, 26 notwithstanding agreed extensions of the limitations period to 27 a date which is 3 years following issuance of the notice of 28 intent to audit, the seller does not allow access to 29 applicable records prior to such date. 30 (b) A seller may apply to a municipality for refund 31 of, or may take a credit for, any overpayment of tax or 20 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 interest or penalty thereon within 3 years following 2 remittance by the seller, and the municipality must refund or 3 allow the seller credit for such overpayments as were remitted 4 to the municipality. However, in the case of an overpayment 5 which the seller has previously refunded or credited to a 6 purchaser in accordance with subsection (6), the limitation 7 period for the seller's refund application or credit shall 8 expire 3 years following the seller's remittance to the 9 municipality or 60 days following the seller's issuance of the 10 refund or credit to the purchaser, whichever is later. 11 (c) Upon expiration of the periods set forth in this 12 subsection, the municipality's right to assess tax, interest, 13 or penalty and the seller's right to apply for a refund or 14 credit expire and are barred, unless fraud has occurred; 15 however, sellers and municipalities may enter into agreements 16 to extend these periods. 17 (5) Notwithstanding subsection (4), a municipality 18 shall offset a seller's overpayment of any tax, interest, or 19 penalty revealed by an audit against any deficiency of tax, 20 interest, or penalty which is determined to be due for the 21 same audit period, and such offsets must be reflected in any 22 proposed assessment. If the overpayments by the seller exceed 23 the deficiency, the municipality must refund to the seller the 24 amount by which the aggregate overpayments exceed the total 25 deficiency. Absent proof to the contrary, the methodology 26 that is employed in computing the amount of a deficiency is 27 presumed to yield an appropriate computation of the amount of 28 any overpayments. As used in subsection (4) and this 29 subsection, "overpayment" to a municipality means and includes 30 all remittances of public service tax, interest, or penalty 31 21 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 which were not due to the municipality, including amounts 2 properly collected but remitted to the incorrect municipality. 3 (6) Any purchaser of a service may request from a 4 seller a refund of, or credit for, taxes collected from the 5 purchaser upon the ground that the amounts collected were not 6 due to any municipality. The seller shall issue the refund or 7 allow a credit to the purchaser entitled thereto, if the 8 request is made within 3 years following collection of the tax 9 from the purchaser. In any event, a seller shall issue a 10 refund or credit to a purchaser within 45 days following the 11 seller's determination of the amount of taxes collected from 12 the purchaser within the preceding 3 years that were not due 13 to any municipality. 14 (7) Municipalities are authorized to assess interest 15 and penalties in accordance with this subsection for failure 16 to pay any tax when due or to file any required return, except 17 that no penalty shall be assessed absent willful neglect, 18 willful negligence, or fraud. Interest may be assessed at a 19 maximum rate of 1 percent per month of the delinquent tax from 20 the date the tax was due until paid. Penalties may be 21 assessed at a maximum rate of 5 percent per month of the 22 delinquent tax, not to exceed a total penalty of 25 percent, 23 except that a municipality may provide that in no event will 24 the penalty for failure to file a return be less than $15. In 25 the case of a fraudulent return or a willful intent to evade 26 payment of the tax, the seller making such fraudulent return 27 or willfully attempting to evade payment of the tax, shall be 28 liable for a specific penalty of 100 percent of the tax. 29 Interest and penalties shall be computed on the net tax due 30 after application of any overpayments, and are subject to 31 22 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 compromise pursuant to subsection (14). Interest or penalties 2 and the rates thereof shall be authorized by ordinance. 3 (8) Any proposed assessment or finding of amounts due 4 the seller constitutes a determination of the municipality for 5 purposes of this section. A determination must separately 6 state the amounts of tax, interest, and penalty claimed to be 7 due or to be refunded, must be accompanied by a written 8 narrative explanation of the basis for the municipality's 9 determinations, must inform the seller of the remedies 10 available to it if it disagrees with any such determination, 11 and must state the consequences of the seller's failure to 12 comply with any demand of the municipality which is stated in 13 the determination. 14 (9) 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 (10) 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 28 secured a written extension of time and fails to file a 29 protest within the extended time period, the proposed 30 assessment becomes a final assessment at the expiration of the 31 extended filing period. If a protest is timely filed and the 23 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 seller and the municipality are unable to resolve the disputed 2 issues, the determination becomes final as of the date of 3 issuance of the notice of decision, unless the seller timely 4 files a petition for reconsideration. If a petition for 5 reconsideration is timely filed, the determination becomes 6 final upon issuance of a notice of reconsideration. 7 (11) 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 (12) 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, penalty, or interest assessed under this section, 18 the plaintiff must pay the municipality the amount of the tax, 19 penalty, and accrued interest which is not being contested by 20 the seller. Venue lies in the county where the municipality 21 is located. The defendant in any such action is the 22 municipality. 23 (13) A seller's failure to protest a determination 24 under this section administratively or judicially does not 25 waive or impair the seller's right to seek refund of any 26 overpayment within the time allowed under subsection (4). 27 (14) A seller's liability for any tax, interest, or 28 penalty may be settled or compromised by the municipality upon 29 the grounds of doubt as to liability or doubt as to the 30 collectibility of such tax, interest, or penalty. A 31 municipality and a seller may enter into a written closing 24 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 agreement that reflects the terms of any settlement or 2 compromise. When such a closing agreement has been approved 3 on behalf of the municipality and the seller, it is final, 4 conclusive, and binding on the parties with respect to all 5 matters set forth therein; and, except upon a showing of fraud 6 or misrepresentation of material fact, additional assessment 7 may not be made against the seller for the tax, interest, or 8 penalty 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, interest, or penalty paid under the closing 12 agreement. In issuing a determination, a municipality must 13 include in its notification thereof to the seller the names of 14 the persons authorized to approve compromises and to execute 15 closing agreements. A municipality may also enter into 16 agreements for scheduling payments of taxes, interest, and 17 penalties, which agreements must recognize both the seller's 18 financial condition and the best interest of the municipality, 19 if the seller gives accurate, current information and meets 20 all other tax obligations on schedule. 21 (15) All notices of intent to audit, determinations, 22 notices of decisions, and notices of reconsideration issued 23 under this section must be transmitted to the seller by 24 certified mail, return receipt requested, and the date of 25 issuance is the postmark date of the transmittal. All 26 protests and petitions for reconsideration are timely filed if 27 postmarked or received by the municipality within the time 28 prescribed by this section. If mailed, protests and petitions 29 must be transmitted by certified mail, return receipt 30 requested. 31 25 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 (16) A seller may pay any contested amount, in whole 2 or in part, at any time, and the payment does not impair any 3 of the seller's remedies as provided in this section. 4 (17) Each municipality that levies the public service 5 tax shall furnish sellers with prompt, accurate responses to 6 questions and to requests for tax assistance. In the event a 7 law is enacted requiring payment of interest on refunds of 8 taxes paid pursuant to chapter 203 or chapter 212, 9 municipalities shall pay interest on public service tax 10 refunds at the rate required by such law. 11 (18) In all matters connected with the administration 12 of the public service tax, sellers have the right: 13 (a) To be represented by counsel or other qualified 14 representatives; 15 (b) To procedural safeguards with respect to the 16 recording of interviews during tax determination processes 17 conducted by the municipality; and 18 (c) To have audits, inspections of records, and 19 interviews conducted at a reasonable time and place. 20 (19) Municipalities may communicate with each other 21 concerning the following: 22 (a) Technical information concerning a seller's tax 23 and accounting system necessary to conduct an accurate and 24 efficient audit of a specific company; however, in no event 25 shall the information include any data relevant to a specific 26 purchaser or account or the seller's tax treatment of specific 27 services; 28 (b) Names and addresses of companies selling taxable 29 services within their respective jurisdictions; and 30 (c) The name of any company issued a refund of taxes 31 and the total amount of taxes refunded to such company. 26 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 (20) Except as otherwise provided in this subsection, 2 a municipality may not assess or attempt to assess a seller 3 for any costs incurred by or charged to the municipality in 4 connection with performing an audit of the seller's books and 5 records, including all travel expenses. Any assessment or 6 proposed assessment of such costs shall be void and 7 unenforceable. A municipality may, however, assess and 8 collect from the seller the reasonable travel expenses 9 incurred by or charged to the municipality in connection with 10 performing an audit of the seller's books and records if the 11 seller received timely notice requesting access to such books 12 and records in accordance with subsection (1) and the seller 13 failed or refused to allow such access and did not propose an 14 alternative date on which the audit was to commence, or if the 15 seller and the municipality agreed in writing to an 16 alternative date on which the audit was to commence but the 17 seller then failed or refused to permit reasonable access to 18 its books and records on the alternative date. 19 (21) The provisions of this section, other than 20 subsection (6), shall not apply to the extent that the seller 21 is the municipality levying the tax under audit or a separate 22 utility authority, board, or commission of such municipality. 23 Section 5. (1) No later than September 1, 1997, each 24 municipality levying a tax under s. 166.231 or s. 166.232, 25 Florida Statutes, shall furnish to the Department of Revenue a 26 notification that specifies the services taxed by such 27 municipality under the authority of either section, including 28 any election chosen by the municipality under s. 29 166.231(9)(a), Florida Statutes; the rate of tax applied to 30 each service; the effective date of the levy; and the name, 31 mailing address, and telephone number of a person designated 27 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 by the municipality to respond to inquiries concerning the 2 tax. The notification must include such information for levies 3 with prior and future effective dates. 4 (2) Address listings and updates that conform to the 5 requirements of s. 166.231(10)(d), Florida Statutes, as in 6 effect before the effective date of this act, are in 7 compliance with this act and sellers may rely thereon, until 8 July 1, 1998. However, no later than January 1, 1998, each 9 municipality shall make available lists which conform to the 10 requirements of this act, and such lists shall have an 11 effective date of July 1, 1998. 12 (3) Section 166.234, Florida Statutes, as created by 13 this act, applies to all taxes, assessments, and audits for 14 periods before and after the effective date of this act, 15 except as follows: 16 (a) Provisions requiring the performance of acts 17 before the commencement of an audit do not apply to audits 18 commenced before the effective date of this act. 19 (b) Nothing in s. 166.234, Florida Statutes, affects 20 taxes and assessments that have been resolved by concession of 21 liability and payment, by settlement, or by other means, 22 before the effective date of this act. 23 (c) The requirements that municipalities furnish the 24 information prescribed in s. 166.234(3) and (8), Florida 25 Statutes, do not apply to determinations issued before the 26 effective date of this act, except that upon the seller's 27 request a municipality shall furnish such information to the 28 seller. No notice, report, determination, protest, petition, 29 or other document issued before the effective date of this act 30 is invalid merely because its contents or the manner or timing 31 28 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 of its transmittal do not comply with s. 166.234, Florida 2 Statutes. 3 (d) In the case of audits that are the subject of 4 pending litigation as of the effective date of this act, the 5 requirements and limitations of s. 166.234(12), Florida 6 Statutes, do not apply to actions filed before the effective 7 date of this act. 8 (e) The provisions of s. 166.234(4)(a), Florida 9 Statutes, shall not apply to taxes due prior to July 1, 1994. 10 A proposed assessment for taxes due prior to July 1, 1994, may 11 be issued on or before July 1, 1997, for any audit period 12 beginning on or after July 1, 1992, which is specified in a 13 notice of intent to audit issued before March 1, 1997. After 14 July 1, 1997, the municipality's right to assess such taxes 15 shall expire and be barred. However, if the municipality is 16 unable to complete such an audit due to the seller's refusal 17 or delay in allowing access to applicable records, the 18 municipality may make an estimate based upon the best 19 information available unless the seller agrees in writing to 20 extend the limitations period. 21 Section 6. Subsection (10) is added to section 203.01, 22 Florida Statutes, 1996 Supplement, to read: 23 203.01 Tax on gross receipts for utility services.-- 24 (10) Notwithstanding the provisions of subsection (5) 25 and s. 212.07(2), sums that were charged or billed as taxes 26 under this section and chapter 212 and that were remitted to 27 the state in full as taxes shall not be subject to refund by 28 the state or by the utility which remitted the sums, when the 29 amount remitted was not in excess of the amount of tax imposed 30 by chapter 212 and this section. 31 29 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 CS/HB 1275 696-118-97 1 Section 7. Subsection (4) is added to section 203.63, 2 Florida Statutes, to read: 3 203.63 Tax on interstate and international 4 telecommunication services.-- 5 (4) Notwithstanding the provisions of subsection (1) 6 and s. 212.07(2), sums that were charged or billed as taxes 7 under this section and chapter 212 and that were remitted to 8 the state in full as taxes shall not be subject to refund by 9 the state or by the utility which remitted the sums, when the 10 amount remitted was not in excess of the amount of tax imposed 11 by chapter 212 and this section. 12 Section 8. It is the intent of the Legislature that 13 the creation of s. 203.01(10), Florida Statutes, 1996 14 Supplement, and s. 203.63(4), Florida Statutes, by this act 15 are remedial and are intended to clarify existing law. 16 Section 9. The sum of $35,000 is appropriated to the 17 Department of Revenue from the Administrative Trust Fund for 18 fiscal year 1997-1998, and one full-time-equivalent position 19 is authorized, for the purpose of performing the functions 20 identified in s. 166.233(2), Florida Statutes, as created by 21 this act. 22 Section 10. If any provision of this act or the 23 application thereof to any person or circumstance is held 24 invalid, the invalidity shall not affect other provisions or 25 applications of the act which can be given effect without the 26 invalid provision or application, and to this end the 27 provisions of this act are declared severable. 28 Section 11. This act shall take effect upon becoming a 29 law. 30 31 30