Senate Bill 1690c1
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Florida Senate - 1998 CS for SB 1690
By the Committee on Ways and Means; and Senator Ostalkiewicz
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1 A bill to be entitled
2 An act relating to taxes on sales, use, and
3 other transactions (RAB); amending s. 212.0506,
4 F.S.; revising guidelines for tax liability of
5 service warranties; amending s. 212.0515, F.S.;
6 providing tax liability for sales of nonfood
7 items from vending machines; revising
8 eligibility for rewards; amending s. 212.054,
9 F.S.; revising guidelines for determination of
10 exemption from partial sales surtaxes; amending
11 s. 212.0598, F.S.; revising provisions relating
12 to determination of air carriers' tax
13 liability; amending s. 212.06, F.S.; revising
14 guidelines for determining tax liability of
15 certain personal property; providing a
16 presumption with respect to tax liability for
17 sales of motor vehicles; providing for a use
18 tax on certain aircraft; defining the terms
19 "real property," "fixtures," and "improvements
20 to real property," for purposes of determining
21 when a person is improving real property;
22 providing guidelines for determining tax
23 liability on rock, shell, fill dirt, and
24 similar materials; providing an effective date.
25
26 Be It Enacted by the Legislature of the State of Florida:
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28 Section 1. Subsection (8) of section 212.0506, Florida
29 Statutes, is amended, present subsection (10) of that section
30 is renumbered as subsection (11), and a new subsection (10) is
31 added to that section, to read:
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1 212.0506 Taxation of service warranties.--
2 (8) If a transaction involves both the issuance of a
3 service warranty that which is subject to such tax and the
4 issuance of a warranty, guaranty, extended warranty or
5 extended guaranty, contract, agreement, or other written
6 promise that which is not subject to such tax, the
7 consideration shall be separately identified and stated with
8 respect to the taxable and nontaxable portions of the
9 transaction. If the consideration is separately apportioned
10 and identified in good faith, such tax shall apply to the
11 transaction to the extent that the consideration received or
12 to be received in connection with the transaction is payment
13 for a service warranty subject to such tax. If the
14 consideration is not apportioned in good faith, the department
15 may reform the contract; such reformation by the department is
16 to be considered prima facie correct, and the burden to show
17 the contrary rests upon the dealer. If the consideration for
18 such a transaction is not separately identified and stated,
19 the entire transaction is taxable.
20 (10) Materials and supplies used in the performance of
21 a factory or manufacturer's warranty are exempt if the
22 contract is furnished at no extra charge with the equipment
23 guaranteed thereunder and such materials and supplies are paid
24 for by the factory or manufacturer.
25 Section 2. Subsections (1), (2), (3), and (6) of
26 section 212.0515, Florida Statutes, are amended to read:
27 212.0515 Sales from vending machines; sales to vending
28 machine operators; special provisions; registration; quarterly
29 reports; penalties.--
30 (1) As used in this section:
31
2
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1 (a) "Vending machine" means a machine, operated by
2 coin, currency, credit card, slug, token, coupon, or similar
3 device, which dispenses food, beverages, or other or beverage
4 items of tangible personal property.
5 (b) "Operator" means any person who possesses a
6 vending machine for the purpose of generating sales through
7 that machine and who maintains the inventory in and removes
8 the receipts from that vending machine.
9 (2) Notwithstanding any other provision of law, the
10 amount of the tax to be paid on food, beverages, or other and
11 beverage items of tangible personal property that are sold in
12 vending machines shall be calculated by dividing the gross
13 receipts from such sales for the applicable reporting period
14 by a divisor, determined as provided in this subsection, to
15 compute gross taxable sales, and then subtracting gross
16 taxable sales from gross receipts to arrive at the amount of
17 tax due. The divisor shall be equal to the sum of 1.0665 for
18 beverage items, or 1.0645 for food items, or 1.0659 for other
19 items of tangible personal property, except that for counties
20 with a 0.5 percent sales surtax rate the divisor shall be
21 equal to the sum of 1.0707 for beverages and other beverage
22 items of tangible personal property, or 1.0686 for food items,
23 for counties with a 1 percent sales surtax rate the divisor
24 shall be equal to the sum of 1.0749 for beverages and other
25 beverage items of tangible personal property, or 1.0726 for
26 food items, and for counties with a 1.5 percent sales surtax
27 rate the divisor shall be equal to the sum of 1.0791 for
28 beverages and other beverage items of tangible personal
29 property or 1.0767 for food items. However, the amount of the
30 tax to be paid on natural fluid milk, homogenized milk,
31 pasteurized milk, whole milk, chocolate milk, or similar milk
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1 products, natural fruit juices, or natural vegetable juices
2 shall be calculated using the divisor that is specified for
3 food items. If an operator cannot account for each type of
4 item sold through a vending machine, the highest tax rate
5 shall be used for all products sold through that machine.
6 (3)(a) An operator of a vending machine may not
7 operate or cause to be operated in this state any vending
8 machine until the operator has registered with the department,
9 has obtained a separate registration certificate for each
10 county in which such machines are located, and has affixed a
11 notice to each vending machine selling food or beverages which
12 states the operator's name, address, and Federal Employer
13 Identification (FEI) number. If the operator is not required
14 to have an FEI number, the notice shall include the operator's
15 sales tax registration number. The notice must be
16 conspicuously displayed on the vending machine when it is
17 being operated in this state and shall contain the following
18 language in conspicuous type: NOTICE TO CUSTOMER: FLORIDA LAW
19 REQUIRES THIS NOTICE TO BE POSTED ON ALL FOOD AND BEVERAGE
20 VENDING MACHINES. REPORT ANY MACHINE WITHOUT A NOTICE TO
21 (TOLL-FREE NUMBER). YOU MAY BE ELIGIBLE FOR A CASH REWARD.
22 (b) The department shall establish a toll-free number
23 to report any violations of this section. Upon a
24 determination that a violation has occurred, the department
25 shall pay the informant a reward of up to 10 percent of
26 previously unpaid taxes recovered as a result of the
27 information provided. A person who receives information
28 concerning a violation of this section from an employee as
29 specified in s. 213.30 is not eligible for a cash reward.
30 (6) The provisions of this section do not apply to
31 vending machines owned and operated by churches, or
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1 synagogues, or nonprofit or charitable organizations exempt
2 pursuant to s. 212.08(7)(z).
3 Section 3. Paragraph (b) of subsection (2) of section
4 212.054, Florida Statutes, is amended to read:
5 212.054 Discretionary sales surtax; limitations,
6 administration, and collection.--
7 (2)
8 (b) However:
9 1. The tax on any sales amount above $5,000 on any
10 item of tangible personal property and on long-distance
11 telephone service shall not be subject to the surtax. For
12 purposes of administering the $5,000 limitation on an item of
13 tangible personal property, if two or more taxable items of
14 tangible personal property are sold to the same purchaser at
15 the same time and, under generally accepted business practice
16 or industry standards or usage, are normally sold in bulk or
17 are items that, when assembled, comprise a working unit or
18 part of a working unit, such items must be considered a single
19 item for purposes of the $5,000 limitation when supported by a
20 charge ticket, sales slip, invoice, or other tangible evidence
21 of a single sale or rental. The limitation provided in this
22 subparagraph does not apply to the sale of any other service.
23 2. In the case of utility, telecommunication, or
24 television system program services billed on or after the
25 effective date of any such surtax, the entire amount of the
26 tax for utility, telecommunication, or television system
27 program services shall be subject to the surtax. In the case
28 of utility, telecommunication, or television system program
29 services billed after the last day the surtax is in effect,
30 the entire amount of the tax on said items shall not be
31 subject to the surtax.
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1 3. In the case of written contracts which are signed
2 prior to the effective date of any such surtax for the
3 construction of improvements to real property or for
4 remodeling of existing structures, the surtax shall be paid by
5 the contractor responsible for the performance of the
6 contract. However, the contractor may apply for one refund of
7 any such surtax paid on materials necessary for the completion
8 of the contract. Any application for refund shall be made no
9 later than 15 months following initial imposition of the
10 surtax in that county. The application for refund shall be in
11 the manner prescribed by the department by rule. A complete
12 application shall include proof of the written contract and of
13 payment of the surtax. The application shall contain a sworn
14 statement, signed by the applicant or its representative,
15 attesting to the validity of the application. The department
16 shall, within 30 days after approval of a complete
17 application, certify to the county information necessary for
18 issuance of a refund to the applicant. Counties are hereby
19 authorized to issue refunds for this purpose and shall set
20 aside from the proceeds of the surtax a sum sufficient to pay
21 any refund lawfully due. Any person who fraudulently obtains
22 or attempts to obtain a refund pursuant to this subparagraph,
23 in addition to being liable for repayment of any refund
24 fraudulently obtained plus a mandatory penalty of 100 percent
25 of the refund, is guilty of a felony of the third degree,
26 punishable as provided in s. 775.082, s. 775.083, or s.
27 775.084.
28 4. In the case of any vessel, railroad, or motor
29 vehicle common carrier entitled to partial exemption from tax
30 imposed under this chapter pursuant to s. 212.08(4), (8), or
31 (9), the basis for imposition of surtax shall be the same as
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1 provided in s. 212.08 and the ratio shall be applied each
2 month to total purchases in this state of property qualified
3 for proration which is delivered or sold in the taxing county
4 to establish the portion used and consumed in intracounty
5 movement and subject to surtax.
6 Section 4. Subsection (2) of section 212.0598, Florida
7 Statutes, is amended to read:
8 212.0598 Special provisions; air carriers.--
9 (2) The basis of the tax shall be the ratio of Florida
10 mileage to total mileage as determined pursuant to chapter 220
11 and this section. The ratio shall be determined at the close
12 of the carrier's preceding fiscal year. However, during the
13 fiscal year in which the air carrier begins initial operations
14 in this state, the carrier may determine its mileage
15 apportionment factor based on an estimated ratio of
16 anticipated revenue miles in this state to anticipated total
17 revenue miles. In such cases, the air carrier shall pay
18 additional tax or apply for a refund based on the actual ratio
19 for that year. The applicable ratio shall be applied each
20 month to the carrier's total systemwide gross purchases of
21 tangible personal property and services otherwise taxable in
22 Florida. Additionally, the ratio shall be applied each month
23 to the carrier's total systemwide payments for the lease or
24 rental of, or license in, real property used by the carrier
25 substantially for aircraft maintenance if that carrier
26 employed, on average, during the previous calendar quarter in
27 excess of 3,000 full-time equivalent maintenance or repair
28 employees at one maintenance base that it leases, rents, or
29 has a license in, in this state. In all other instances, the
30 tax on real property leased, rented, or licensed by the
31 carrier shall be as provided in s. 212.031.
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1 Section 5. Present paragraph (d) of subsection (1) of
2 section 212.06, Florida Statutes, is redesignated as paragraph
3 (e) and a new paragraph (d) is added to that subsection,
4 subsections (7) and (10) of that section are amended, and
5 subsections (13), (14), and (15) are added to that section, to
6 read:
7 212.06 Sales, storage, use tax; collectible from
8 dealers; "dealer" defined; dealers to collect from purchasers;
9 legislative intent as to scope of tax.--
10 (1)
11 (d) For purposes of paragraph (b), the department may
12 establish a cost price amount for industry groups that
13 manufacture, produce, compound, process, or fabricate tangible
14 personal property for their own use in the performance of
15 contracts for improvements to real property. Such cost price
16 amount must be established as a percentage, rounded to the
17 nearest whole number, of the total contract price charged for
18 the improvement. The cost price percentages established must
19 be adopted by rule pursuant to the procedures provided in s.
20 120.54, upon petition of a majority of the members of an
21 industry group or by a statewide association that represents
22 such industry group, and must be based on a reasonable
23 estimate of average costs incurred by members of the
24 petitioning industry group. The department is required to
25 adopt a cost price percentage only if sufficient information
26 is available to determine such percentage. The information
27 considered by the department to establish the cost price
28 percentage must be that set forth in the petition or that
29 which is otherwise made available to the department. Any cost
30 price percentage so established must be available only by
31 election of a member of the industry group for which the
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1 percentage was established and may apply only to such periods
2 or contracts for which the election is made. The election must
3 be made by the taxpayer by timely accruing and remitting tax
4 on the contract using the established percentage figure. If
5 the taxpayer does not timely accrue and remit the use tax due
6 for a contract using the percentage figure, the taxpayer may
7 not later use this method of calculating the use tax due for
8 that contract. Taxpayers must maintain adequate records
9 showing the accrual of tax using the percentage figure on
10 total contract price. Any cost price so established must
11 remain available for use for a period of at least 5 years from
12 the date of its adoption and must be reviewed and be subject
13 to adjustment by the department no more frequently than at
14 5-year intervals. The provisions of this paragraph are not
15 available to persons subject to paragraph (c).
16 (7) The provisions of this chapter do not apply in
17 respect to the use or consumption of tangible personal
18 property or services, or distribution or storage of tangible
19 personal property for use or consumption in this state, upon
20 which a like tax equal to or greater than the amount imposed
21 by this chapter has been lawfully imposed and paid in another
22 state, territory of the United States, or the District of
23 Columbia. The proof of payment of such tax shall be made
24 according to rules and regulations of the department. If the
25 amount of tax paid in another state, territory of the United
26 States, or the District of Columbia is not equal to or greater
27 than the amount of tax imposed by this chapter, then the
28 dealer shall pay to the department an amount sufficient to
29 make the tax paid in the other state, territory of the United
30 States, or the District of Columbia and in this state equal to
31 the amount imposed by this chapter.
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1 (10) No title certificate may be issued on any boat,
2 mobile home, motor vehicle, or other vehicle, or, if no title
3 is required by law, no license or registration may be issued
4 for any boat, mobile home, motor vehicle, or other vehicle,
5 unless there is filed with such application for title
6 certificate or license or registration certificate a receipt,
7 issued by an authorized dealer or a designated agent of the
8 Department of Revenue, evidencing the payment of the tax
9 imposed by this chapter where the same is payable. A
10 presumption of sales and use tax applicability is created if
11 the motor vehicle is registered in this state. For the
12 purpose of enforcing this provision, all county tax collectors
13 and all persons or firms authorized to sell or issue boat,
14 mobile home, and motor vehicle licenses are hereby designated
15 agents of the department and are required to perform such duty
16 in the same manner and under the same conditions prescribed
17 for their other duties by the constitution or any statute of
18 this state. All transfers of title to boats, mobile homes,
19 motor vehicles, and other vehicles are taxable transactions,
20 unless expressly exempt under this chapter.
21 (13) Registered aircraft dealers who purchase aircraft
22 exclusively for resale and do not pay sales tax on the
23 purchase price at the time of purchase shall pay a use tax
24 computed on 1 percent of the value of the aircraft each
25 calendar month that the aircraft is used by the dealer.
26 Payment of such tax shall commence in the month during which
27 the aircraft is first used for any purpose for which income is
28 received by the dealer. A dealer may pay the sales tax on the
29 purchase of the aircraft in lieu of the monthly use tax. The
30 value of the aircraft shall include its acquisition cost and
31 the cost of reconditioning that enhances the value of the
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1 aircraft and shall generally be the value shown on the books
2 of the dealer in accordance with generally accepted accounting
3 principles. Notwithstanding the payment by the dealer of tax
4 computed on 1 percent of the value of any aircraft, if the
5 aircraft is leased or rented, the dealer shall collect from
6 the customer and remit the tax that is due on the lease or
7 rental of the aircraft; such payments do not diminish or
8 offset any use tax due from the dealer.
9 (14) For the purpose of determining whether a person
10 is improving real property, the term:
11 (a) "Real property" means the land and improvements
12 thereto and fixtures and is synonymous with the terms "realty"
13 and "real estate."
14 (b) "Fixtures" means items that are an accessory to a
15 building, other structure, or land and that do not lose their
16 identity as accessories when installed but that do become
17 permanently attached to realty. However, the term does not
18 include the following items, whether or not such items are
19 attached to real property in a permanent manner: trade
20 fixtures; property of a type that is required to be
21 registered, licensed, titled, or documented by this state or
22 by the United States Government, including, but not limited
23 to, mobile homes, except mobile homes assessed as real
24 property; or machinery or equipment. For an item to be
25 considered a fixture, it is not necessary that the owner of
26 the item also own the real property to which it is attached.
27 (c) "Improvements to real property" includes the
28 activities of building, erecting, constructing, altering,
29 improving, repairing, or maintaining real property.
30 (15)(a) When a contractor secures rock, shell, fill
31 dirt, or similar materials from a location that he or she owns
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1 or leases and uses such materials to fulfill a real property
2 contract on the property of another person, the contractor is
3 the ultimate consumer of such materials and is liable for use
4 tax thereon. This paragraph does not apply to a person who
5 secures such materials from a location that he or she owns for
6 use on his or her own property. The basis upon which the
7 contractor shall remit the tax is the fair retail market value
8 determined by establishing either the price he or she would
9 have to pay for it on the open market or the price he or she
10 would regularly charge if he or she sold it to other
11 contractors or users.
12 (b) When a contractor does not own or lease the land
13 but has entered into an agreement to purchase fill dirt, rock,
14 shell, or similar materials for his or her own use and wherein
15 the contractor will excavate and remove the material, the
16 taxable basis shall include the cost of the material plus all
17 costs of clearing, excavating, and removing, including labor
18 and all other costs incurred by the contractor.
19 (c) In lieu of the method described in paragraph (a)
20 for determining the taxable basis on rock, shell, fill dirt,
21 and similar materials a contractor uses in performing a
22 contract for the improvement of real property, the taxable
23 basis may be calculated as the land cost plus all costs of
24 clearing, excavating, and loading, including labor, power,
25 blasting, and similar costs.
26 (d) No tax is applicable when the Department of
27 Transportation furnishes without charge the borrow materials
28 or the pits where materials are to be extracted for use on a
29 road contract.
30 Section 6. This act shall take effect July 1, 1998.
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1 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
2 SB 1690
3
4 The following substantial change is made in the committee
substitute:
5
1. The provision stating that any person receiving
6 information from a Department of Revenue employee is not
eligible for any cash award for all taxes covered by
7 chapter 213, F.S., is removed from the bill. The bill's
effect is limited to awards dealing with vending
8 machines, which was the extent of the rule the Department
found to be without authority.
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