Senate Bill 0192

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    Florida Senate - 2000                                   SB 192

    By Senator Horne





    6-201-00

  1                      A bill to be entitled

  2         An act relating to the tax on intangible

  3         personal property; amending s. 199.023, F.S.;

  4         amending the definition of the term "beneficial

  5         interest"; amending s. 199.052, F.S.; relieving

  6         trustees of specified obligations; deleting a

  7         distinction between Florida-situs trusts and

  8         foreign-situs trusts; amending the obligations

  9         of Florida residents who have a beneficial

10         interest in a trust; imposing obligations on

11         certain agents other than trustees; exempting

12         certain banks and savings associations from

13         specified responsibilities; providing that a

14         bank's or savings association's management or

15         control of certain intangible personal property

16         may not be used as the basis for imposing the

17         tax; amending s. 199.175, F.S.; amending, for

18         purposes of determining taxable situs, the

19         definition of the term "any person domiciled in

20         this state"; amending s. 199.183, F.S.;

21         exempting from the tax certain intangible

22         personal property that is owned, managed, or

23         controlled by a trustee of a trust; providing

24         for retroactivity; providing an effective date.

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26  Be It Enacted by the Legislature of the State of Florida:

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28         Section 1.  Subsection (7) of section 199.023, Florida

29  Statutes, is amended to read:

30         199.023  Definitions.--As used in this chapter:

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    Florida Senate - 2000                                   SB 192
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  1         (7)  A person resident has a "beneficial interest" in a

  2  foreign trust if the person resident has a vested interest,

  3  even if subject to divestment, which includes at least a

  4  current right to income and either a power to revoke the trust

  5  or a general power of appointment, as defined in 26 U.S.C. s.

  6  2041(b)(1).

  7         Section 2.  Subsections (5), (6), (9), and (15) of

  8  section 199.052, Florida Statutes, are amended to read:

  9         199.052  Annual tax returns; payment of annual tax.--

10         (5)  The trustee of a Florida-situs trust is not

11  primarily responsible for returning the trust's intangible

12  personal property and is not required to pay any paying the

13  annual tax on it,.

14         (a)  A trust has a Florida situs when:

15         1.  All trustees are residents of the state;

16         2.  There are three or more trustees sharing equally in

17  the ownership, management, or control of the trust's

18  intangible property, and the majority of the trustees are

19  residents of this state; or

20         3.  Trustees consist of both residents and nonresidents

21  and management or control of the trust is with a resident

22  trustee.

23         (b)  When trustees consist of both residents and

24  nonresidents and management or control is with a nonresident

25  trustee, the trust does not have Florida situs and no return

26  is necessary by any resident trustee.

27         (c)  A portion of the trust has Florida situs when

28  there are two trustees, one a resident of this state and one a

29  nonresident, and they share equally in the ownership,

30  management, or control of the trust's intangible property. The

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    Florida Senate - 2000                                   SB 192
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  1  tax on such property shall be based on the value apportioned

  2  between them.

  3         (d)  If there is more than one trustee in the state,

  4  only one tax return for the trust must be filed.

  5         (e)  The trust's beneficiaries, however, may

  6  individually return their equitable shares of the trust's

  7  intangible personal property and pay the tax on such shares,

  8  in which case the trustee need not return such property or pay

  9  such tax, although the department may require the trustee to

10  file an informational return.

11         (6)  Each Florida resident with a beneficial interest,

12  as defined in s. 199.023(7), in a foreign-situs trust, that

13  is, a trust with situs outside of this state, is primarily

14  responsible for returning the resident's equitable share of

15  the trust's intangible personal property and paying the annual

16  tax on it.  The trustee of a foreign trust may return and pay

17  the tax on the equitable shares of all Florida residents

18  having beneficial interests, in which case the residents need

19  not return such property or pay such tax.

20         (9)  Where an agent other than a trustee has control or

21  management of intangible personal property, the principal is

22  primarily responsible for returning such property and paying

23  the annual tax on it, but the agent shall return such property

24  on behalf of the principal and pay the annual tax on it if the

25  principal fails to do so.  The department may in any case

26  require the agent to file an informational return.

27         (15)  If a bank or savings association, as defined in

28  s. 220.62, acts as a fiduciary or agent of a trust other than

29  as a trustee, the bank or savings association is not

30  responsible for returning the trust's intangible personal

31  property and is not required to pay any annual tax on it, and

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    Florida Senate - 2000                                   SB 192
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  1  intangible personal property of the trust shall not have

  2  taxable situs in this state pursuant to s. 199.175 solely by

  3  virtue of the management or control of the bank or savings

  4  association may not be used as the basis for imposing any

  5  annual tax on any person or any assets of the trust.

  6         Section 3.  Paragraph (a) of subsection (1) of section

  7  199.175, Florida Statutes, is amended to read:

  8         199.175  Taxable situs.--For purposes of the annual tax

  9  imposed under this chapter:

10         (1)  Intangible personal property shall have a taxable

11  situs in this state when it is owned, managed, or controlled

12  by any person domiciled in this state on January 1 of the tax

13  year.  Such intangibles shall be subject to annual taxation

14  under this chapter, unless the person who owns, manages, or

15  controls them is specifically exempt or unless the property is

16  specifically exempt. This provision shall apply regardless of

17  where the evidence of the intangible property is kept; where

18  the intangible is created, approved, or paid; or where

19  business may be conducted from which the intangible arises.

20  The fact that a Florida corporation owns the stock of an

21  out-of-state corporation and manages and controls such

22  corporation from a location in this state shall not operate to

23  give a taxable situs in this state to the intangibles owned by

24  the out-of-state corporation, which intangibles arise out of

25  business transacted outside this state.

26         (a)  For the purposes of this chapter, "any person

27  domiciled in this state" means:

28         1.  Any natural person who is a legal resident of this

29  state;

30         2.  Any business, business trust as described in

31  chapter 609, company, corporation, partnership, or other

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    Florida Senate - 2000                                   SB 192
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  1  artificial entity organized or created under the law of this

  2  state, except a trust; or

  3         3.  Any person, including a trust, who has established

  4  a commercial domicile in this state.

  5         Section 4.  Subsection (4) is added to section 199.183,

  6  Florida Statutes, to read:

  7         199.183  Taxpayers exempt from annual and nonrecurring

  8  taxes.--

  9         (4)  Intangible personal property that is owned,

10  managed, or controlled by a trustee of a trust is exempt from

11  annual tax under this chapter. This exemption does not exempt

12  from annual tax:

13         (a)  A person who owns, manages, or controls intangible

14  personal property that is also owned, managed, or controlled

15  by a trustee; or

16         (b)  A resident of this state who has a taxable

17  beneficial interest, as defined in s. 199.023, in a trust.

18         Section 5.  This act shall take effect July 1, 2000,

19  and applies retroactively to any intangible personal property

20  tax imposed on or after July 1, 1999.

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    Florida Senate - 2000                                   SB 192
    6-201-00




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  2                          SENATE SUMMARY

  3    Amends provisions relating to the tax on intangible
      personal property. Amends the definition of the term
  4    "beneficial interest." Relieves trustees of specified
      obligations. Deletes the distinction between
  5    Florida-situs trusts and foreign-situs trusts. Amends the
      obligations of Florida residents who have a beneficial
  6    interest in a trust. Imposes obligations on certain
      agents other than trustees. Exempts certain banks and
  7    savings associations from specified responsibilities.
      Provides that the management or control of certain
  8    intangible personal property by a bank or savings
      association may not be used as the basis for imposing the
  9    tax. Amending, for purposes of determining taxable situs,
      the definition of the term "any person domiciled in this
10    state." Exempts from the tax certain intangible personal
      property that is owned, managed, or controlled by a
11    trustee of a trust. Provides that the act applies
      retroactively to intangible personal property taxes
12    imposed on or after July 1, 1999.

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