House Bill 2443
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Florida House of Representatives - 2000 HB 2443
By Representative Fasano
1 A bill to be entitled
2 An act relating to taxation; amending s.
3 199.023, F.S.; revising the definition of a
4 "beneficial interest" in a trust for intangible
5 personal property tax purposes; amending s.
6 199.052, F.S.; providing that a trustee is not
7 responsible for returns and is not required to
8 pay annual tax on trust property; providing
9 that a Florida resident with a beneficial
10 interest in a trust is responsible for returns
11 and payment of tax for his or her equitable
12 share; revising provisions relating to the
13 responsibilities of a bank or savings
14 association acting as agent of a trust other
15 than as a trustee and providing that its
16 management or control shall not be used as a
17 basis for imposing the annual tax; providing
18 that intangible assets managed by a fiduciary
19 or agent shall not have taxable situs in this
20 state solely by virtue of such management;
21 amending s. 199.175, F.S.; revising the
22 definition of "any person domiciled in this
23 state"; amending s. 199.183, F.S.; providing
24 that intangible personal property owned,
25 managed, or controlled by a trustee of a trust
26 is exempt from the annual tax; amending s.
27 199.185, F.S.; providing that all accounts
28 receivable are exempt from intangible personal
29 property taxes; revising application of the
30 exemption from the annual tax granted to
31 natural persons and increasing the exemption;
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1 providing intent; amending s. 199.292, F.S.;
2 eliminating distribution of a portion of
3 intangible personal property tax revenues to
4 the Revenue Sharing Trust Fund for Counties;
5 amending s. 212.20, F.S.; providing for
6 distribution of a portion of sales and use tax
7 proceeds to the trust fund; amending s. 218.23,
8 F.S.; providing for an annual distribution from
9 the trust fund to certain consolidated units of
10 local government; amending s. 288.1169, F.S.;
11 correcting a reference; repealing s. 218.251,
12 F.S., which provides for an additional
13 distribution to certain consolidated
14 governments, subject to annual appropriations;
15 providing an effective date.
16
17 Be It Enacted by the Legislature of the State of Florida:
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19 Section 1. (1) Subsection (7) of section 199.023,
20 Florida Statutes, is amended to read:
21 199.023 Definitions.--As used in this chapter:
22 (7) A resident has a "beneficial interest" in a
23 foreign trust if the resident has a vested interest, even if
24 subject to divestment, which includes at least a current right
25 to income and either a power to revoke the trust or a general
26 power of appointment, as defined in 26 U.S.C. s. 2041(b)(1).
27 (2) This section is effective for tax years beginning
28 after December 31, 2000.
29 Section 2. (1) Subsections (5), (6), (9), and (15) of
30 section 199.052, Florida Statutes, are amended to read:
31 199.052 Annual tax returns; payment of annual tax.--
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1 (5) The trustee of a Florida-situs trust is not
2 primarily responsible for returning the trust's intangible
3 personal property and is not required to pay any paying the
4 annual tax on it,.
5 (a) A trust has a Florida situs when:
6 1. All trustees are residents of the state;
7 2. There are three or more trustees sharing equally in
8 the ownership, management, or control of the trust's
9 intangible property, and the majority of the trustees are
10 residents of this state; or
11 3. Trustees consist of both residents and nonresidents
12 and management or control of the trust is with a resident
13 trustee.
14 (b) When trustees consist of both residents and
15 nonresidents and management or control is with a nonresident
16 trustee, the trust does not have Florida situs and no return
17 is necessary by any resident trustee.
18 (c) A portion of the trust has Florida situs when
19 there are two trustees, one a resident of this state and one a
20 nonresident, and they share equally in the ownership,
21 management, or control of the trust's intangible property. The
22 tax on such property shall be based on the value apportioned
23 between them.
24 (d) If there is more than one trustee in the state,
25 only one tax return for the trust must be filed.
26 (e) The trust's beneficiaries, however, may
27 individually return their equitable shares of the trust's
28 intangible personal property and pay the tax on such shares,
29 in which case the trustee need not return such property or pay
30 such tax, although the department may require the trustee to
31 file an informational return.
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1 (6) Each Florida resident with a beneficial interest,
2 as defined in s. 199.023(7), in a foreign-situs trust, that
3 is, a trust with situs outside of this state, is primarily
4 responsible for returning the resident's equitable share of
5 the trust's intangible personal property and paying the annual
6 tax on it. The trustee of a foreign trust may return and pay
7 the tax on the equitable shares of all Florida residents
8 having beneficial interests, in which case the residents need
9 not return such property or pay such tax.
10 (9) Where an agent other than a trustee has control or
11 management of intangible personal property, the principal is
12 primarily responsible for returning such property and paying
13 the annual tax on it, but the agent shall return such property
14 on behalf of the principal and pay the annual tax on it if the
15 principal fails to do so. The department may in any case
16 require the agent to file an informational return.
17 (15) If a bank or savings association, as defined in
18 s. 220.62, acts as a fiduciary or agent of a trust other than
19 as a trustee, the bank or savings association is not
20 responsible for returning the trust's intangible personal
21 property and is not required to pay any annual tax on it, and
22 intangible personal property of the trust shall not have
23 taxable situs in this state pursuant to s. 199.175 solely by
24 virtue of the management or control of the bank or savings
25 association shall not be used as the basis for imposing any
26 annual tax on any person or any assets of the trust. If a
27 person acts as a fiduciary or agent for purposes of managing
28 intangible assets owned by another person, such intangible
29 assets shall not have a taxable situs in this state pursuant
30 to s. 199.175 solely by virtue of the management or control of
31 such assets by the person who is not the owner of the assets.
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1 (2) This section is effective for tax years beginning
2 after December 31, 2000.
3 Section 3. (1) Paragraph (a) of subsection (1) of
4 section 199.175, Florida Statutes, is amended to read:
5 199.175 Taxable situs.--For purposes of the annual tax
6 imposed under this chapter:
7 (1) Intangible personal property shall have a taxable
8 situs in this state when it is owned, managed, or controlled
9 by any person domiciled in this state on January 1 of the tax
10 year. Such intangibles shall be subject to annual taxation
11 under this chapter, unless the person who owns, manages, or
12 controls them is specifically exempt or unless the property is
13 specifically exempt. This provision shall apply regardless of
14 where the evidence of the intangible property is kept; where
15 the intangible is created, approved, or paid; or where
16 business may be conducted from which the intangible arises.
17 The fact that a Florida corporation owns the stock of an
18 out-of-state corporation and manages and controls such
19 corporation from a location in this state shall not operate to
20 give a taxable situs in this state to the intangibles owned by
21 the out-of-state corporation, which intangibles arise out of
22 business transacted outside this state.
23 (a) For the purposes of this chapter, "any person
24 domiciled in this state" means:
25 1. Any natural person who is a legal resident of this
26 state;
27 2. Any bank or financial institution, business,
28 business trust as described in chapter 609, company,
29 corporation, insurance company, partnership, or other
30 artificial entity organized or created under the law of this
31 state, except a trust; or
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1 3. Any person, including a business trust, who has
2 established a commercial domicile in this state.
3 (2) This section is effective for tax years beginning
4 after December 31, 2000.
5 Section 4. (1) Subsection (4) is added to section
6 199.183, 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 a resident of this state who has a taxable
13 beneficial interest, as defined in s. 199.023, in a trust.
14 (2) This section is effective for tax years beginning
15 after December 31, 2000.
16 Section 5. (1) Paragraph (l) of subsection (1) and
17 subsection (2) of section 199.185, Florida Statutes, are
18 amended to read:
19 199.185 Property exempted from annual and nonrecurring
20 taxes.--
21 (1) The following intangible personal property shall
22 be exempt from the annual and nonrecurring taxes imposed by
23 this chapter:
24 (l) All Two-thirds of the accounts receivable arising
25 or acquired in the ordinary course of a trade or business
26 which are owned, controlled, or managed by a taxpayer on
27 January 1, 2000, and thereafter. It is the intent of the
28 Legislature that, pursuant to future legislative action, the
29 portion of such accounts receivable exempt from taxation be
30 increased to all such accounts receivable on January 1, 2001,
31 and thereafter. This exemption does not apply to accounts
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1 receivable that arise outside the taxpayer's ordinary course
2 of trade or business. For the purposes of this chapter, the
3 term "accounts receivable" means a business debt that is owed
4 by another to the taxpayer or the taxpayer's assignee in the
5 ordinary course of trade or business and is not supported by
6 negotiable instruments. Accounts receivable include, but are
7 not limited to, credit card receivables, charge card
8 receivables, credit receivables, margin receivables, inventory
9 or other floor plan financing, lease payments past due,
10 conditional sales contracts, retail installment sales
11 agreements, financing lease contracts, and a claim against a
12 debtor usually arising from sales or services rendered and
13 which is not necessarily due or past due. The examples
14 specified in this paragraph shall be deemed not to be
15 supported by negotiable instruments. The term "negotiable
16 instrument" means a written document that is legally capable
17 of being transferred by indorsement or delivery. The term
18 "indorsement" means the act of a payee or holder in writing
19 his or her name on the back of an instrument without further
20 qualifying words other than "pay to the order of" or "pay to"
21 whereby the property is assigned and transferred to another.
22 (2)(a) With respect to the first mill of the annual
23 tax, Every natural person is entitled each year to an
24 exemption of the first $200,000 $20,000 of the value of
25 property otherwise subject to the annual said tax. A husband
26 and wife filing jointly shall have an exemption of $400,000
27 $40,000.
28 (b) With respect to the last 0.5 mill of the annual
29 tax, every natural person is entitled each year to an
30 exemption of the first $100,000 of the value of property
31
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1 otherwise subject to said tax. A husband and wife filing
2 jointly shall have an exemption of $200,000.
3
4 Agents and fiduciaries, other than guardians and custodians
5 under a gifts-to-minors act, filing as such may not claim this
6 exemption on behalf of their principals or beneficiaries;
7 however, if the principal or beneficiary returns the property
8 held by the agent or fiduciary and is a natural person, the
9 principal or beneficiary may claim the exemption. No taxpayer
10 shall be entitled to more than one exemption under this
11 subsection paragraph (a) and one exemption under paragraph
12 (b). This exemption shall not apply to that intangible
13 personal property described in s. 199.023(1)(d).
14 (2) This section is effective for tax years beginning
15 after December 31, 2000.
16 Section 6. It is the intent of the Legislature to
17 eliminate the intangible personal property tax by increasing
18 the standard exemption in order to remove additional
19 individuals, families, and small business from the tax rolls
20 each year.
21 Section 7. Subsection (3) of section 199.292, Florida
22 Statutes, is amended to read:
23 199.292 Disposition of intangible personal property
24 taxes.--All intangible personal property taxes collected
25 pursuant to this chapter shall be placed in a special fund
26 designated as the "Intangible Tax Trust Fund." The fund shall
27 be disbursed as follows:
28 (3) Of the remaining intangible personal property
29 taxes collected, the balance an amount equal to 35.3 percent
30 in state fiscal year 1998-1999 and an amount equal to 37.7
31 percent in each year thereafter, shall be transferred to the
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1 Revenue Sharing Trust Fund for Counties. Of the remaining
2 taxes collected, an amount equal to 64.7 percent in state
3 fiscal year 1998-1999 and an amount equal to 62.3 percent in
4 each year thereafter, shall be transferred to the General
5 Revenue Fund of the state.
6 Section 8. Paragraph (f) of subsection (6) of section
7 212.20, Florida Statutes, is amended to read:
8 212.20 Funds collected, disposition; additional powers
9 of department; operational expense; refund of taxes
10 adjudicated unconstitutionally collected.--
11 (6) Distribution of all proceeds under this chapter
12 shall be as follows:
13 (f) The proceeds of all other taxes and fees imposed
14 pursuant to this chapter shall be distributed as follows:
15 1. In any fiscal year, the greater of $500 million,
16 minus an amount equal to 4.6 percent of the proceeds of the
17 taxes collected pursuant to chapter 201, or 5 percent of all
18 other taxes and fees imposed pursuant to this chapter shall be
19 deposited in monthly installments into the General Revenue
20 Fund.
21 2. Two-tenths of one percent shall be transferred to
22 the Solid Waste Management Trust Fund.
23 3. After the distribution under subparagraphs 1. and
24 2., 9.653 percent of the amount remitted by a sales tax dealer
25 located within a participating county pursuant to s. 218.61
26 shall be transferred into the Local Government Half-cent Sales
27 Tax Clearing Trust Fund.
28 4. After the distribution under subparagraphs 1., 2.,
29 and 3., 0.054 percent shall be transferred to the Local
30 Government Half-cent Sales Tax Clearing Trust Fund and
31 distributed pursuant to s. 218.65.
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1 5. For proceeds received after July 1, 2000, and after
2 the distributions under subparagraphs 1., 2., 3., and 4., 2.25
3 percent of the available proceeds pursuant to this paragraph
4 shall be transferred monthly to the Revenue Sharing Trust Fund
5 for Counties pursuant to s. 218.215.
6 6.5. Of the remaining proceeds:
7 a. Beginning July 1, 1992, $166,667 shall be
8 distributed monthly by the department to each applicant that
9 has been certified as a "facility for a new professional
10 sports franchise" or a "facility for a retained professional
11 sports franchise" pursuant to s. 288.1162 and $41,667 shall be
12 distributed monthly by the department to each applicant that
13 has been certified as a "new spring training franchise
14 facility" pursuant to s. 288.1162. Distributions shall begin
15 60 days following such certification and shall continue for 30
16 years. Nothing contained herein shall be construed to allow an
17 applicant certified pursuant to s. 288.1162 to receive more in
18 distributions than actually expended by the applicant for the
19 public purposes provided for in s. 288.1162(7). However, a
20 certified applicant shall receive distributions up to the
21 maximum amount allowable and undistributed under this section
22 for additional renovations and improvements to the facility
23 for the franchise without additional certification.
24 b. Beginning 30 days after notice by the Office of
25 Tourism, Trade, and Economic Development to the Department of
26 Revenue that an applicant has been certified as the
27 professional golf hall of fame pursuant to s. 288.1168 and is
28 open to the public, $166,667 shall be distributed monthly, for
29 up to 300 months, to the applicant.
30 c. Beginning 30 days after notice by the Department of
31 Commerce to the Department of Revenue that the applicant has
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1 been certified as the International Game Fish Association
2 World Center facility pursuant to s. 288.1169, and the
3 facility is open to the public, $83,333 shall be distributed
4 monthly, for up to 180 months, to the applicant. This
5 distribution is subject to reduction pursuant to s. 288.1169.
6 7.6. All other proceeds shall remain with the General
7 Revenue Fund.
8 Section 9. Section 218.23, Florida Statutes, is
9 amended to read:
10 218.23 Revenue sharing with units of local
11 government.--
12 (1) To be eligible to participate in revenue sharing
13 beyond the minimum entitlement in any fiscal year, a unit of
14 local government is required to have:
15 (a) Reported its finances for its most recently
16 completed fiscal year to the Department of Banking and
17 Finance, pursuant to s. 218.32.
18 (b) Made provisions for annual postaudits of its
19 financial accounts in accordance with provisions of law.
20 (c) Levied, as shown on its most recent financial
21 report pursuant to s. 218.32, ad valorem taxes, exclusive of
22 taxes levied for debt service or other special millages
23 authorized by the voters, to produce the revenue equivalent to
24 a millage rate of 3 mills on the dollar based on the 1973
25 taxable values as certified by the property appraiser pursuant
26 to s. 193.122(2) or, in order to produce revenue equivalent to
27 that which would otherwise be produced by such 3-mill ad
28 valorem tax, to have received a remittance from the county
29 pursuant to s. 125.01(6)(a), collected an occupational license
30 tax or a utility tax, levied an ad valorem tax, or received
31 revenue from any combination of these four sources. If a new
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1 municipality is incorporated, the provisions of this paragraph
2 shall apply to the taxable values for the year of
3 incorporation as certified by the property appraiser. This
4 paragraph requires only a minimum amount of revenue to be
5 raised from the ad valorem tax, the occupational license tax,
6 and the utility tax. It does not require a minimum millage
7 rate.
8 (d) Certified that persons in its employ as law
9 enforcement officers, as defined in s. 943.10(1), meet the
10 qualifications for employment as established by the Criminal
11 Justice Standards and Training Commission; that its salary
12 structure and salary plans meet the provisions of chapter 943;
13 and that no law enforcement officer is compensated for his or
14 her services at an annual salary rate of less than $6,000.
15 However, the department may waive the minimum law enforcement
16 officer salary requirement if a city or county certifies that
17 it is levying ad valorem taxes at 10 mills.
18 (e) Certified that persons in its employ as
19 firefighters, as defined in s. 633.30(1), meet the
20 qualification for employment as established by the Division of
21 State Fire Marshal pursuant to the provisions of ss. 633.34
22 and 633.35 and that the provisions of s. 633.382 have been
23 met.
24 (f) Certified that each dependent special district
25 that is budgeted separately from the general budget of the
26 local governing authority has met the provisions for annual
27 postaudit of its financial accounts in accordance with the
28 provisions of law.
29
30 Additionally, to receive its share of revenue sharing funds, a
31 unit of local government shall certify to the Department of
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1 Revenue that the requirements of s. 200.065, if applicable,
2 were met. The certification shall be made annually within 30
3 days of adoption of an ordinance or resolution establishing a
4 final property tax levy or, if no property tax is levied, not
5 later than November 1. The portion of revenue sharing funds
6 which, pursuant to this part, would otherwise be distributed
7 to a unit of local government which has not certified
8 compliance or has otherwise failed to meet the requirements of
9 s. 200.065 shall be deposited in the General Revenue Fund for
10 the 12 months following a determination of noncompliance by
11 the department.
12 (2) Any unit of local government which is consolidated
13 as provided by s. 9, Art. VIII of the State Constitution of
14 1885, as preserved by s. 6(e), Art. VIII of the 1968 revised
15 constitution, shall receive an annual distribution from the
16 Revenue Sharing Trust Fund for Counties equal to $6.24 times
17 its population.
18 (3)(2) The distribution to a unit of local government
19 under this part is determined by the following formula:
20 (a) First, the entitlement of an eligible unit of
21 local government shall be computed on the basis of the
22 apportionment factor provided in s. 218.245, which shall be
23 applied for all eligible units of local government to all
24 receipts available for distribution in the respective revenue
25 sharing trust fund.
26 (b) Second, revenue shared with eligible units of
27 local government for any fiscal year shall be adjusted so that
28 no eligible unit of local government receives less funds than
29 its guaranteed entitlement.
30 (c) Third, revenues shared with counties for any
31 fiscal year shall be adjusted so that no county receives less
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1 funds than its guaranteed entitlement plus the second
2 guaranteed entitlement for counties.
3 (d) Fourth, revenue shared with units of local
4 government for any fiscal year shall be adjusted so that no
5 unit of local government receives less funds than its minimum
6 entitlement.
7 (e) Fifth, after the adjustments provided in
8 paragraphs (b), (c), and (d), and after deducting the amount
9 committed to all the units of local government, the funds
10 remaining in the respective trust funds shall be distributed
11 to those eligible units of local government which qualify to
12 receive additional moneys beyond the guaranteed entitlement,
13 on the basis of the additional money of each qualified unit of
14 local government in proportion to the total additional money
15 of all qualified units of local government.
16 (4)(3) Notwithstanding the provisions of paragraph
17 (1)(c), no unit of local government which was eligible to
18 participate in revenue sharing in the 3 years prior to
19 initially participating in the local government half-cent
20 sales tax shall be ineligible to participate in revenue
21 sharing solely due to a millage or utility tax reduction
22 afforded by the local government half-cent sales tax.
23 Section 10. Subsection (6) of section 288.1169,
24 Florida Statutes, is amended to read:
25 288.1169 International Game Fish Association World
26 Center facility; department duties.--
27 (6) The Department of Commerce must recertify every 10
28 years that the facility is open, that the International Game
29 Fish Association World Center continues to be the only
30 international administrative headquarters, fishing museum, and
31 Hall of Fame in the United States recognized by the
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1 International Game Fish Association, and that the project is
2 meeting the minimum projections for attendance or sales tax
3 revenues as required at the time of original certification.
4 If the facility is not recertified during this 10-year review
5 as meeting the minimum projections, then funding will be
6 abated until certification criteria are met. If the project
7 fails to generate $1 million of annual revenues pursuant to
8 paragraph (2)(e), the distribution of revenues pursuant to s.
9 212.20(6)(f)6.5.c. shall be reduced to an amount equal to
10 $83,333 multiplied by a fraction, the numerator of which is
11 the actual revenues generated and the denominator of which is
12 $1 million. Such reduction shall remain in effect until
13 revenues generated by the project in a 12-month period equal
14 or exceed $1 million.
15 Section 11. Section 218.251, Florida Statutes, is
16 repealed.
17 Section 12. This act shall take effect July 1, 2000.
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1 *****************************************
2 HOUSE SUMMARY
3
Revises the definition of a "beneficial interest" in a
4 trust for intangible personal property tax purposes.
Provides that a trustee is not responsible for returns
5 and is not required to pay annual tax on trust property.
Provides that a Florida resident with a beneficial
6 interest in a trust is responsible for returns and
payment of tax for his or her equitable share. Revises
7 provisions relating to the responsibilities of a bank or
savings association acting as agent of a trust other than
8 as a trustee and provides that its management or control
shall not be used as a basis for imposing the annual tax.
9 Provides that intangible assets managed by a fiduciary or
agent shall not have taxable situs in this state solely
10 by virtue of such management. Provides that intangible
personal property owned, managed, or controlled by a
11 trustee of a trust is exempt from the annual tax.
12
Provides that all accounts receivable are exempt from
13 intangible personal property taxes. Revises application
of the exemption from the annual tax granted to natural
14 persons and increases the exemption. Provides intent.
15
Eliminates distribution of a portion of intangible
16 personal property tax revenues to the Revenue Sharing
Trust Fund for Counties and provides for distribution of
17 a portion of sales and use tax proceeds to the trust
fund. Provides for an annual distribution from the trust
18 fund to certain consolidated units of local government
and removes provisions which provide for an additional
19 distribution to certain consolidated governments, subject
to annual appropriations.
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