Senate Bill sb1774c1
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Florida Senate - 2003 CS for SB 1774
By the Committee on Finance and Taxation; and Senator Campbell
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1 A bill to be entitled
2 An act relating to the tax on gross receipts
3 for utility and communications services;
4 amending s. 203.01, F.S.; providing for a tax
5 on utility services delivered to a retail
6 consumer in this state; providing for a tax on
7 the gross receipts of a distribution company
8 providing delivery of electricity to a retail
9 consumer, based on an index price; providing
10 for an annual calculation of the index price;
11 providing a credit for similar taxes paid to
12 another jurisdiction; providing for a tax on
13 the gross receipts of a distribution company
14 providing transportation of natural gas or
15 manufactured gas to a retail consumer, based on
16 an index price; providing for an annual
17 calculation of the index price; providing a
18 credit for similar taxes paid to another
19 jurisdiction; providing for a tax on the cost
20 price of electricity, natural gas, or
21 manufactured gas to be paid by any person who
22 causes these products to be severed or imported
23 into the state for that person's own use;
24 revising obsolete provisions; providing that
25 the term "gross receipts" does not include the
26 sale of manufactured gas to a public or private
27 utility for resale or for use as a fuel in the
28 generation of electricity; providing that the
29 term "gross receipts" does not include
30 wholesale electric transmission service or the
31 use and consumption of natural gas to produce
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Florida Senate - 2003 CS for SB 1774
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1 oil or natural gas or the use and consumption
2 of natural or manufactured gas to transport
3 those products or the sale or transportation to
4 or use of natural or manufactured gas by
5 certain manufacturers; amending s. 203.012,
6 F.S.; redefining the term "utility service";
7 defining the term "distribution company";
8 authorizing the executive director of the
9 department to adopt emergency rules to
10 implement the provisions of this act; providing
11 an amnesty for unpaid gross receipts tax,
12 penalties, and interest on unpaid gross
13 receipts tax otherwise due for selling natural
14 gas in this state; providing conditions for the
15 amnesty; providing limitations for the amnesty;
16 authorizing the executive director of the
17 Department of Revenue to adopt emergency rules
18 to implement the amnesty; providing effective
19 dates.
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21 Be It Enacted by the Legislature of the State of Florida:
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23 Section 1. Paragraph (a) and present paragraph (f) of
24 subsection (1) of section 203.01, Florida Statutes, are
25 amended, present paragraphs (c) through (f) of that subsection
26 are redesignated as paragraphs (h) through (k), respectively,
27 new paragraphs (c) through (g) are added to that subsection,
28 and subsection (3) of that section is amended, to read:
29 203.01 Tax on gross receipts for utility and
30 communications services.--
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Florida Senate - 2003 CS for SB 1774
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1 (1)(a)1. A tax is imposed on gross receipts from
2 utility services that are delivered to a retail consumer in
3 this state. Such tax shall be levied as provided in paragraphs
4 (b) through (j). Every person that receives payment for any
5 utility service shall report by the last day of each month to
6 the Department of Revenue, under oath of the secretary or some
7 other officer of such person, the total amount of gross
8 receipts derived from business done within this state, or
9 between points within this state, for the preceding month and,
10 at the same time, shall pay into the State Treasury an amount
11 equal to a percentage of such gross receipts at the rate set
12 forth in paragraph (b). Such collections shall be certified
13 by the Comptroller upon the request of the State Board of
14 Education.
15 2. A tax is levied on communications services as
16 defined in s. 202.11(3). Such tax shall be applied to the same
17 services and transactions as are subject to taxation under
18 chapter 202, and to communications services that are subject
19 to the exemption provided in s. 202.125(1). Such tax shall be
20 applied to the sales price of communications services when
21 sold at retail and to the actual cost of operating substitute
22 communications systems, as such terms are defined in s.
23 202.11, shall be due and payable at the same time as the taxes
24 imposed pursuant to chapter 202, and shall be administered and
25 collected pursuant to the provisions of chapter 202.
26 (c) The tax shall be levied against the total amount
27 of gross receipts received by a distribution company for its
28 sale of utility services, if the utility service is delivered
29 to the final consumer by a distribution company, and the final
30 consumer pays the distribution company a charge for utility
31 service which includes a charge for both the electricity or
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Florida Senate - 2003 CS for SB 1774
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1 natural or manufactured gas and the transportation of
2 electricity or natural or manufactured gas to the consumer.
3 The distribution company shall report and remit to the
4 Department of Revenue by the last day of each month the taxes
5 levied pursuant to this paragraph during the preceding month.
6 (d)1. Each distribution company that receives payment
7 for the delivery of electricity from a retail consumer in this
8 state is subject to tax on the exercise of this privilege as
9 provided by this paragraph unless the payment is subject to
10 tax under paragraph (c). For the exercise of this privilege,
11 the tax levied on such distribution company's receipts for the
12 delivery of electricity shall be determined by multiplying the
13 number of kilowatt hours delivered by the index price and
14 applying the rate in paragraph (b) to the result.
15 2. The index price is the average Florida price per
16 kilowatt hour for commercial and industrial retail consumers
17 in the previous calendar year, as published in the United
18 States Energy Information Administration Electric Power
19 Monthly and announced by the Department of Revenue on June 1
20 of each year to be effective for the 12-month period beginning
21 July 1 of that year.
22 3. Tax due under this paragraph shall be administered,
23 paid, and reported in the same manner as the tax due under
24 paragraph (c).
25 4. The amount of tax due under this paragraph shall be
26 reduced by the amount of any gross receipts tax or similar tax
27 lawfully imposed on and paid by the person from whom the
28 consumer purchased the electricity, whether imposed by and
29 paid to this state, another state, a territory of the United
30 States, or the District of Columbia. This reduction must be
31 reflected in a reduction to any gross receipts tax passed on
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1 to the final retail consumer as a separately stated charge and
2 does not inure to the benefit of the person who receives
3 payment for the delivery of the electricity. The methods of
4 demonstrating proof of payment and the amount of such
5 reduction in tax shall be made according to rules of the
6 Department of Revenue.
7 (e)1. Every distribution company that receives payment
8 for the transportation of natural or manufactured gas from a
9 retail consumer in this state is subject to tax on the
10 exercise of this privilege as provided by this paragraph
11 unless the payment is subject to tax under paragraph (c). For
12 the exercise of this privilege the tax levied on such
13 distribution company's receipts for the transportation of
14 natural or manufactured gas shall be determined by dividing
15 the number of cubic feet delivered by 1,000, multiplying the
16 resulting number by the index price, and applying the rate in
17 paragraph (a) to the result.
18 2. The index price is the average Florida price per
19 1,000 cubic feet for commercial and industrial retail
20 consumers in the previous calendar year as published in the
21 United Station Energy Information Administration Natural Gas
22 Monthly and announced by the Department of Revenue on June 1
23 of each year to be effective for the 12-month period beginning
24 July 1 of that year.
25 3. Tax due under this paragraph shall be administered,
26 paid, and reported in the same manner as the tax due under
27 paragraph (c).
28 4. The amount of tax due under this paragraph shall be
29 reduced by the amount of any gross receipts tax or similar tax
30 lawfully imposed on and paid by the person from whom the
31 consumer purchased the natural gas or manufactured gas,
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1 whether imposed by and paid to this state, another state, a
2 territory of the United States, or the District of Columbia.
3 This reduction must be reflected in a reduction to any gross
4 receipts tax passed on to the consumer as a separately stated
5 charge and does not inure to the benefit of the person
6 providing the transportation service. The methods of
7 demonstrating proof of payment and the amount of such
8 reduction in tax shall be made according to rules of the
9 Department of Revenue.
10 (f) Any person who purchases and imports into this
11 state electricity, natural gas, or manufactured gas, or severs
12 natural gas, for that person's own use or consumption as a
13 substitute for purchasing utility, transportation, or delivery
14 services taxable under this chapter and who cannot demonstrate
15 payment of the tax imposed by this chapter must register with
16 the Department of Revenue and pay into the State Treasury each
17 month an amount equal to the cost price of such electricity,
18 natural gas, or manufactured gas times the rate set forth in
19 paragraph (b), reduced by the amount of any gross receipts tax
20 or similar tax lawfully imposed on and paid by the person from
21 whom the electricity, natural gas, or manufactured gas was
22 purchased or any person who provided delivery service or
23 transportation service in connection with the electricity,
24 natural gas, or manufactured gas. For purposes of this
25 paragraph, the term "cost price" has the meaning ascribed in
26 s. 212.02(4). The methods of demonstrating proof of payment
27 and the amount of such reductions in tax shall be made
28 according to rules of the Department of Revenue.
29 (g)(f) Notwithstanding any other provision of this
30 chapter, with the exception of a communications services
31 dealer reporting taxes administered under chapter 202
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1 telephone or telecommunication system described in paragraph
2 (c), the department may require:
3 1. A quarterly return and payment when the tax
4 remitted for the preceding four calendar quarters did not
5 exceed $1,000;
6 2. A semiannual return and payment when the tax
7 remitted for the preceding four calendar quarters did not
8 exceed $500; or
9 3. An annual return and payment when the tax remitted
10 for the preceding four calendar quarters did not exceed $100.
11 (3) The tax imposed by subsection (1) does not apply
12 to term "gross receipts" as used herein does not include gross
13 receipts of any person derived from:
14 (a) The sale or transportation of natural gas or
15 manufactured gas to a public or private utility, including a
16 municipal corporation or rural electric cooperative
17 association, either for resale or for use as fuel in the
18 generation of electricity; or
19 (b) The sale or delivery of electricity to a public or
20 private utility, including a municipal corporation or rural
21 electric cooperative association, for resale within the state,
22 or as part of an electrical interchange agreement or contract
23 between such utilities for the purpose of transferring more
24 economically generated power,;
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26 provided the person deriving gross receipts from such sale
27 demonstrates that a sale, transportation, or delivery for
28 resale in fact occurred and complies with the following
29 requirements: A sale, transportation, or delivery for resale
30 in this state must be in strict compliance with the rules and
31 regulations of the Department of Revenue; and any sale subject
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1 to the tax imposed by this section which is person making a
2 sale for resale in this state which is not in strict
3 compliance with the rules and regulations of the Department of
4 Revenue shall be subject to liable for and pay the tax at the
5 appropriate rate imposed on utilities by paragraph (b) on the
6 person making such sale. Any person making a sale for resale
7 in this state may, through an informal protest provided for in
8 s. 213.21 and the rules of the Department of Revenue, provide
9 the department with evidence of the exempt status of a sale.
10 The department shall adopt rules which provide that valid
11 proof and documentation of the resale in this state by a
12 person making the sale for resale in this state will be
13 accepted by the department when submitted during the protest
14 period but will not be accepted when submitted in any
15 proceeding under chapter 120 or any circuit court action
16 instituted under chapter 72;.
17 (c) Wholesale sales of electric transmission service;
18 (d) The use of natural gas in the production of oil or
19 gas, or the use of natural or manufactured gas by a person
20 transporting natural or manufactured gas, when used and
21 consumed in providing such services; or
22 (e) The sale or transportation to, or use of, natural
23 gas or manufactured gas by manufacturers classified under SIC
24 Industry Major Group Numbers 24, 26, or 28 or Industry Group
25 Numbers 1475, 2297, or 3295, as published in the Standard
26 Industrial Classification Manual, 1987, by the Office of
27 Management and Budget, Executive Office of the President, for
28 use as an energy source or a raw material.
29 Section 2. Section 203.012, Florida Statutes, is
30 amended to read:
31 203.012 Definitions.--As used in this chapter:
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1 (1) "Utility service" means electricity for light,
2 heat, or power; and natural or manufactured gas for light,
3 heat, or power, including transportation, delivery,
4 transmission, and distribution of the electricity or natural
5 or manufactured gas. This subsection does not broaden the
6 definition of utility service to include separately stated
7 charges for tangible personal property or services that are
8 not charges for the electricity or natural or manufactured gas
9 or the transportation, delivery, transmission, or distribution
10 of electricity or natural or manufactured gas.
11 (2) "Person" means any person as defined in s. 212.02.
12 (3) "Distribution company" means any person owning or
13 operating local electric or natural or manufactured gas
14 utility distribution facilities within this state for the
15 transmission, delivery, and sale of electricity, or natural or
16 manufactured gas. The term does not include natural gas
17 transmission companies that are subject to the jurisdiction of
18 the Federal Energy Regulatory Commission.
19 Section 3. Emergency rules.--The executive director of
20 the Department of Revenue is authorized, and all conditions
21 are deemed met, to adopt emergency rules, under sections
22 120.536(1) and 120.54(4), Florida Statutes, to implement the
23 provisions of section 203.01, Florida Statutes, that provide
24 for remittance of tax by distribution companies and
25 self-accrual of tax by retail consumers and the provision of
26 section 203.012(1), Florida Statutes, that provides that
27 utility services include transportation, transmission, and
28 distribution of electricity and natural or manufactured gas.
29 Such rules shall include forms the Department of Revenue
30 determines are necessary or appropriate for registration,
31 applying for self-accrual authority, reporting, and remitting
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1 taxes, or applying for credits. Notwithstanding any other
2 provision of law, such emergency rules shall remain effective
3 for 6 months after the date of adoption and may be renewed
4 during the pendency of procedures to adopt rules addressing
5 the subject of the emergency rules.
6 Section 4. Amnesty for registration and remittance of
7 tax.--
8 (1) The state shall provide an amnesty for unpaid
9 gross receipts tax, penalties, and interest on unpaid gross
10 receipts tax that may otherwise be due for the sale or
11 transportation of natural gas for consumption in this state if
12 all of the following requirements are satisfied.
13 (a) The sales subject to amnesty were made prior to
14 the effective date of this section.
15 (b) The gross receipts at issue were derived from one
16 of the following:
17 1. Sales by persons who are not regulated pursuant to
18 chapter 366;
19 2. Sales for which the written sales agreement
20 provides for transfer of title to the gas outside the state;
21 or
22 3. Sales of transportation services associated with
23 the sales of gas.
24 (c) The seller registers with the Department of
25 Revenue to pay gross receipts tax on or before the effective
26 date of this section.
27 (d) The seller applies for amnesty within 3 months
28 after the effective date of this section, in accordance with
29 the rules of the Department of Revenue.
30 (2) The amnesty is not available for taxes, penalties,
31 or interest that have been assessed if the assessment is final
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1 and has not been timely challenged, or for any tax, penalty,
2 or interest that has been previously paid to the department
3 unless the payment is the subject of an assessment that is not
4 final or that has been timely challenged.
5 (3) The amnesty is not available for tax billed to or
6 collected by the seller as an itemized charge to customers.
7 (4) The executive director of the Department of
8 Revenue may adopt emergency rules under sections 120.536(1)
9 and 120.54(4), Florida Statutes, to implement the amnesty.
10 Such rules may provide forms and procedures for applying for
11 amnesty; for reporting the sales for which amnesty is sought;
12 and for ensuring the applicant's ongoing commitment to
13 registration, collection, and remittance of the state's gross
14 receipts tax. Notwithstanding any other law, the emergency
15 rules shall remain effective until the later of the date that
16 is 6 months after the date of adoption of the rule or the date
17 of final resolution of all amnesty applications filed pursuant
18 to this section.
19 (5) This section shall take effect July 1, 2003.
20 Section 5. Except as otherwise expressly provided in
21 this act, this act shall take effect January 1, 2004.
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23 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
24 SB 1774
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26 This committee substitute for SB 1774 provides that sales or
transportation to, or use of natural or manufactured gas by
27 certain manufacturers is not subject to gross receipts tax. It
also gives the Department of Revenue authority to enact
28 emergency rules to implement provisions of the bill, and
redefines "utility services" and defines "distribution
29 company" for the purposes of the Chapter 203, Florida
Statutes.
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