Senate Bill sb1244er

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    2005 Legislature                 CS for SB 1244, 1st Engrossed



  1                                 

  2         An act relating to the tax on gross receipts

  3         for utility services; amending s. 203.01, F.S.;

  4         providing for a tax on utility services

  5         delivered to a retail consumer in this state;

  6         providing for a tax on the gross receipts of a

  7         distribution company providing delivery of

  8         electricity to a retail consumer, based on an

  9         index price; providing for an annual

10         calculation of the index price; providing for a

11         tax reduction by refund for a like tax paid to

12         another jurisdiction; providing for a tax on

13         the gross receipts of a distribution company

14         providing for the sale or transportation of

15         natural gas or manufactured gas to a retail

16         consumer, based on an index price; providing

17         for an annual calculation of the index price;

18         providing for a tax reduction by refund for

19         similar taxes paid to another jurisdiction;

20         providing for a tax on the cost price of

21         electricity, natural gas, or manufactured gas

22         to be paid by any person who causes these

23         products to be severed or imported into the

24         state for that person's own use; revising

25         obsolete provisions; providing that the tax

26         does not apply to certain sales,

27         transportation, delivery, or uses; providing

28         that a written certificate of entitlement to

29         the exclusion from tax for persons eligible for

30         an exemption under s. 212.08(7)(ff)2., F.S.,

31         relieves the seller or person providing


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    2005 Legislature                 CS for SB 1244, 1st Engrossed



 1         transportation or delivery from responsibility

 2         of remitting tax; requiring any person who

 3         transports natural or manufactured gas to

 4         furnish a list of customers to the Department

 5         of Revenue; amending s. 203.012, F.S.;

 6         redefining the term "utility service"; defining

 7         the term "distribution company"; authorizing

 8         the executive director of the Department of

 9         Revenue to adopt emergency rules to implement

10         the act; providing an amnesty for unpaid gross

11         receipts tax, penalties, and interest on unpaid

12         gross receipts tax otherwise due for selling

13         natural gas in this state; providing conditions

14         for the amnesty; providing limitations for the

15         amnesty; authorizing the executive director of

16         the Department of Revenue to adopt emergency

17         rules to implement the amnesty; providing an

18         effective date.

19  

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

21  

22         Section 1.  Subsections (1) and (3) of section 203.01,

23  Florida Statutes, are amended, and subsection (9) is added to

24  that section, to read:

25         203.01  Tax on gross receipts for utility and

26  communications services.--

27         (1)(a)1.  A tax is imposed on gross receipts from

28  utility services that are delivered to a retail consumer in

29  this state. Such tax shall be levied as provided in paragraphs

30  (b)-(j) Every person that receives payment for any utility

31  service shall report by the last day of each month to the


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    2005 Legislature                 CS for SB 1244, 1st Engrossed



 1  Department of Revenue, under oath of the secretary or some

 2  other officer of such person, the total amount of gross

 3  receipts derived from business done within this state, or

 4  between points within this state, for the preceding month and,

 5  at the same time, shall pay into the State Treasury an amount

 6  equal to a percentage of such gross receipts at the rate set

 7  forth in paragraph (b). Such collections shall be certified by

 8  the Chief Financial Officer upon the request of the State

 9  Board of Education.

10         2.  A tax is levied on communications services as

11  defined in s. 202.11(3). Such tax shall be applied to the same

12  services and transactions as are subject to taxation under

13  chapter 202, and to communications services that are subject

14  to the exemption provided in s. 202.125(1). Such tax shall be

15  applied to the sales price of communications services when

16  sold at retail and to the actual cost of operating substitute

17  communications systems, as such terms are defined in s.

18  202.11, shall be due and payable at the same time as the taxes

19  imposed pursuant to chapter 202, and shall be administered and

20  collected pursuant to the provisions of chapter 202.

21         (b)  The rate applied to utility services shall be 2.5

22  percent. The rate applied to communications services shall be

23  2.37 percent.

24         (c)  The tax shall be levied against the total amount

25  of gross receipts received by a distribution company for its

26  sale of utility services if the utility service is delivered

27  to the retail consumer by a distribution company and the

28  retail consumer pays the distribution company a charge for

29  utility service which includes a charge for both the

30  electricity and the transportation of electricity to the

31  retail consumer. The distribution company shall report and


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    2005 Legislature                 CS for SB 1244, 1st Engrossed



 1  remit to the Department of Revenue by the last day of each

 2  month the taxes levied pursuant to this paragraph during the

 3  preceding month.

 4         (d)1.  Each distribution company that receives payment

 5  for the delivery of electricity to a retail consumer in this

 6  state is subject to tax on the exercise of this privilege as

 7  provided by this paragraph unless the payment is subject to

 8  tax under paragraph (c). For the exercise of this privilege,

 9  the tax levied on such distribution company's receipts for the

10  delivery of electricity shall be determined by multiplying the

11  number of kilowatt hours delivered by the index price and

12  applying the rate in paragraph (b) to the result.

13         2.  The index price is the Florida price per kilowatt

14  hour for retail consumers in the previous calendar year, as

15  published in the United States Energy Information

16  Administration Electric Power Monthly and announced by the

17  Department of Revenue on June 1 of each year to be effective

18  for the 12-month period beginning July 1 of that year. For

19  each residential, commercial, and industrial customer class,

20  the applicable index posted for residential, commercial, and

21  industrial will be applied in calculating the gross receipts

22  to which the tax applies. If publication of the indices is

23  delayed or discontinued, the last posted index shall be used

24  until a current index is posted or the department adopts a

25  comparable index by rule.

26         3.  Tax due under this paragraph shall be administered,

27  paid, and reported in the same manner as the tax due under

28  paragraph (c).

29         4.  The amount of tax due under this paragraph shall be

30  reduced by the amount of any like tax lawfully imposed on and

31  paid by the person from whom the retail consumer purchased the


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    2005 Legislature                 CS for SB 1244, 1st Engrossed



 1  electricity, whether imposed by and paid to this state,

 2  another state, a territory of the United States, or the

 3  District of Columbia. This reduction in tax shall be available

 4  to the retail consumer as a refund made pursuant to s. 215.26

 5  and does not inure to the benefit of the person who receives

 6  payment for the delivery of the electricity. The methods of

 7  demonstrating proof of payment and the amount of such refund

 8  shall be made according to rules of the Department of Revenue.

 9         (e)1.  Every distribution company that receives payment

10  for the sale or transportation of natural or manufactured gas

11  to a retail consumer in this state is subject to tax on the

12  exercise of this privilege as provided by this paragraph. For

13  the exercise of this privilege, the tax levied on such

14  distribution company's receipts for the sale or transportation

15  of natural or manufactured gas shall be determined by dividing

16  the number of cubic feet delivered by 1,000, multiplying the

17  resulting number by the index price, and applying the rate in

18  paragraph (b) to the result.

19         2.  The index price is the Florida price per 1,000

20  cubic feet for retail consumers in the previous calendar year

21  as published in the United States Energy Information

22  Administration Natural Gas Monthly and announced by the

23  Department of Revenue on June 1 of each year to be effective

24  for the 12-month period beginning July 1 of that year. For

25  each residential, commercial, and industrial customer class,

26  the applicable index posted for residential, commercial, and

27  industrial will be applied in calculating the gross receipts

28  to which the tax applies. If publication of the indices is

29  delayed or discontinued, the last posted index shall be used

30  until a current index is posted or the department adopts a

31  comparable index by rule.


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    2005 Legislature                 CS for SB 1244, 1st Engrossed



 1         3.  Tax due under this paragraph shall be administered,

 2  paid, and reported in the same manner as the tax due under

 3  paragraph (c).

 4         4.  The amount of tax due under this paragraph shall be

 5  reduced by the amount of any like tax lawfully imposed on and

 6  paid by the person from whom the retail consumer purchased the

 7  natural gas or manufactured gas, whether imposed by and paid

 8  to this state, another state, a territory of the United

 9  States, or the District of Columbia. This reduction in tax

10  shall be available to the retail consumer as a refund pursuant

11  to s. 215.26 and does not inure to the benefit of the person

12  providing the transportation service. The methods of

13  demonstrating proof of payment and the amount of such refund

14  shall be made according to rules of the Department of Revenue.

15         (f)  Any person who imports into this state

16  electricity, natural gas, or manufactured gas, or severs

17  natural gas, for that person's own use or consumption as a

18  substitute for purchasing utility, transportation, or delivery

19  services taxable under this chapter and who cannot demonstrate

20  payment of the tax imposed by this chapter must register with

21  the Department of Revenue and pay into the State Treasury each

22  month an amount equal to the cost price of such electricity,

23  natural gas, or manufactured gas times the rate set forth in

24  paragraph (b), reduced by the amount of any like tax lawfully

25  imposed on and paid by the person from whom the electricity,

26  natural gas, or manufactured gas was purchased or any person

27  who provided delivery service or transportation service in

28  connection with the electricity, natural gas, or manufactured

29  gas. For purposes of this paragraph, the term "cost price" has

30  the meaning ascribed in s. 212.02(4). The methods of

31  demonstrating proof of payment and the amount of such


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    2005 Legislature                 CS for SB 1244, 1st Engrossed



 1  reductions in tax shall be made according to rules of the

 2  Department of Revenue.

 3         (g)(c)  Electricity produced by cogeneration or by

 4  small power producers which is transmitted and distributed by

 5  a public utility between two locations of a customer of the

 6  utility pursuant to s. 366.051 is subject to the tax imposed

 7  by this section. The tax shall be applied to the cost price of

 8  such electricity as provided in s. 212.02(4) and shall be paid

 9  each month by the producer of such electricity.

10         (h)(d)  Electricity produced by cogeneration or by

11  small power producers during the 12-month period ending June

12  30 of each year which is in excess of nontaxable electricity

13  produced during the 12-month period ending June 30, 1990, is

14  subject to the tax imposed by this section. The tax shall be

15  applied to the cost price of such electricity as provided in

16  s. 212.02(4) and shall be paid each month, beginning with the

17  month in which total production exceeds the production of

18  nontaxable electricity for the 12-month period ending June 30,

19  1990. For purposes of this paragraph, "nontaxable electricity"

20  means electricity produced by cogeneration or by small power

21  producers which is not subject to tax under paragraph (g)(c).

22  Taxes paid pursuant to paragraph (g)(c) may be credited

23  against taxes due under this paragraph. Electricity generated

24  as part of an industrial manufacturing process which

25  manufactures products from phosphate rock, raw wood fiber,

26  paper, citrus, or any agricultural product shall not be

27  subject to the tax imposed by this paragraph. "Industrial

28  manufacturing process" means the entire process conducted at

29  the location where the process takes place.

30         (i)(e)  Any person other than a cogenerator or small

31  power producer described in paragraph (h)(d) who produces for


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 1  his or her own use electrical energy which is a substitute for

 2  electrical energy produced by an electric utility as defined

 3  in s. 366.02 is subject to the tax imposed by this section.

 4  The tax shall be applied to the cost price of such electrical

 5  energy as provided in s. 212.02(4) and shall be paid each

 6  month. The provisions of this paragraph do not apply to any

 7  electrical energy produced and used by an electric utility.

 8         (j)(f)  Notwithstanding any other provision of this

 9  chapter, with the exception of a communications services

10  dealer reporting taxes administered under chapter 202

11  telephone or telecommunication system described in paragraph

12  (c), the department may require:

13         1.  A quarterly return and payment when the tax

14  remitted for the preceding four calendar quarters did not

15  exceed $1,000;

16         2.  A semiannual return and payment when the tax

17  remitted for the preceding four calendar quarters did not

18  exceed $500; or

19         3.  An annual return and payment when the tax remitted

20  for the preceding four calendar quarters did not exceed $100.

21         (3)  The tax imposed by subsection (1) does not apply

22  to term "gross receipts" as used herein does not include gross

23  receipts of any person derived from:

24         (a)1.  The sale or transportation of natural gas or

25  manufactured gas to a public or private utility, including a

26  municipal corporation or rural electric cooperative

27  association, either for resale or for use as fuel in the

28  generation of electricity; or

29         2.(b)  The sale or delivery of electricity to a public

30  or private utility, including a municipal corporation or rural

31  electric cooperative association, for resale within the state,


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 1  or as part of an electrical interchange agreement or contract

 2  between such utilities for the purpose of transferring more

 3  economically generated power;

 4  

 5  provided the person deriving gross receipts from such sale

 6  demonstrates that a sale, transportation, or delivery for

 7  resale in fact occurred and complies with the following

 8  requirements: A sale, transportation, or delivery for resale

 9  in this state must be in strict compliance with the rules and

10  regulations of the Department of Revenue; and any sale subject

11  to the tax imposed by this section person making a sale for

12  resale in this state which is not in strict compliance with

13  the rules and regulations of the Department of Revenue shall

14  be subject to liable for and pay the tax at the appropriate

15  rate imposed on utilities by paragraph (b) on the person

16  making the sale. Any person making a sale for resale in this

17  state may, through an informal protest provided for in s.

18  213.21 and the rules of the Department of Revenue, provide the

19  department with evidence of the exempt status of a sale. The

20  department shall adopt rules that which provide that valid

21  proof and documentation of the resale in this state by a

22  person making the sale for resale in this state will be

23  accepted by the department when submitted during the protest

24  period but will not be accepted when submitted in any

25  proceeding under chapter 120 or any circuit court action

26  instituted under chapter 72;.

27         (b)  Wholesale sales of electric transmission service;

28         (c)  The use of natural gas in the production of oil or

29  gas, or the use of natural or manufactured gas by a person

30  transporting natural or manufactured gas, when used and

31  consumed in providing such services; or


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 1         (d)  The sale or transportation to, or use of, natural

 2  gas or manufactured gas by a person eligible for an exemption

 3  under s. 212.08(7)(ff)2. for use as an energy source or a raw

 4  material. Possession by a seller of natural or manufactured

 5  gas or by any person providing transportation or delivery of

 6  natural or manufactured gas of a written certification by the

 7  purchaser, certifying the purchaser's entitlement to the

 8  exclusion permitted by this paragraph, relieves the seller or

 9  person providing transportation or delivery from the

10  responsibility of remitting tax on the nontaxable amounts, and

11  the department shall look solely to the purchaser for recovery

12  of such tax if the department determines that the purchaser

13  was not entitled to the exclusion. The certification must

14  include an acknowledgment by the purchaser that it will be

15  liable for tax pursuant to paragraph (1)(f) if the

16  requirements for exclusion are not met.

17         (9)  Any person who engages in the transportation of

18  natural or manufactured gas shall furnish annually to the

19  Department of Revenue a list of customers to whom

20  transportation services were provided in the prior year. This

21  reporting requirement does not apply to distribution

22  companies. Any person required to furnish such a list may

23  elect to identify only those customers who take direct

24  delivery without purchasing interconnection services from a

25  distribution company. Such reports are subject to the

26  confidentiality provisions of s. 213.053. Any person required

27  to furnish a customer list may instead comply by maintaining a

28  publicly-accessible customer list on its Internet website.

29  Such list shall be updated no less than annually.

30         Section 2.  Section 203.012, Florida Statutes, is

31  amended to read:


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 1         203.012  Definitions.--As used in this chapter:

 2         (1)  "Distribution company" means any person owning or

 3  operating local electric or natural or manufactured gas

 4  utility distribution facilities within this state for the

 5  transmission, delivery, and sale of electricity or natural or

 6  manufactured gas. The term does not include natural gas

 7  transmission companies that are subject to the jurisdiction of

 8  the Federal Energy Regulatory Commission.

 9         (2)  "Person" means any person as defined in s. 212.02.

10         (3)(1)  "Utility service" means electricity for light,

11  heat, or power; and natural or manufactured gas for light,

12  heat, or power, including transportation, delivery,

13  transmission, and distribution of the electricity or natural

14  or manufactured gas. This subsection does not broaden the

15  definition of utility service to include separately stated

16  charges for tangible personal property or services which are

17  not charges for the electricity or natural or manufactured gas

18  or the transportation, delivery, transmission, or distribution

19  of electricity or natural or manufactured gas.

20         Section 3.  Emergency rules.--The executive director of

21  the Department of Revenue is authorized, and all conditions

22  are deemed met, to adopt emergency rules, under sections

23  120.536(1) and 120.54(4), Florida Statutes, to implement the

24  provisions of section 203.01, Florida Statutes, which provide

25  for remittance of tax by distribution companies and

26  self-accrual of tax by retail consumers and the provisions of

27  section 203.012, Florida Statutes, which define the term

28  "distribution company" and provide that utility services

29  include transportation, transmission, and distribution of

30  electricity and natural or manufactured gas. Such rules shall

31  include forms the Department of Revenue determines are


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 1  necessary or appropriate for registration, applying for

 2  self-accrual authority, reporting, and remitting taxes, or

 3  applying for credits. Notwithstanding any other law, such

 4  emergency rules shall remain effective for 6 months after the

 5  date of adoption and may be renewed during the pendency of

 6  procedures to adopt rules addressing the subject of the

 7  emergency rules. This section is effective upon this act

 8  becoming a law.

 9         Section 4.  Amnesty for registration and remittance of

10  tax.--

11         (1)  The state shall provide an amnesty for unpaid

12  gross receipts tax, penalties, and interest on unpaid gross

13  receipts tax that may otherwise be due for the sale or

14  transportation of natural gas for consumption in this state if

15  all of the following requirements are satisfied:

16         (a)  The sales subject to amnesty were made prior to

17  January 1, 2006.

18         (b)  The gross receipts at issue were derived from one

19  of the following:

20         1.  Sales by persons who are not regulated pursuant to

21  chapter 366, Florida Statutes;

22         2.  Sales for which the written sales agreement

23  provides for transfer of title to the gas outside the state;

24  or

25         3.  Sales of transportation services associated with

26  the sales of gas.

27         (c)  The seller registered with the Department of

28  Revenue to pay gross receipts tax on or before January 1,

29  2006, if the seller is required to be registered as of January

30  1, 2006.

31  


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 1         (d)  The seller applies for amnesty on or before

 2  January 1, 2006, in accordance with the rules of the

 3  Department of Revenue.

 4         (2)  The amnesty is not available for taxes, penalties,

 5  or interest that have been assessed if the assessment is final

 6  and has not been timely challenged, or for any tax, penalty,

 7  or interest that has been previously paid to the department

 8  unless the payment is the subject of an assessment that is not

 9  final or that has been timely challenged.

10         (3)  The amnesty is not available for tax billed to or

11  collected by the seller as an itemized charge to customers.

12         (4)  The executive director of the Department of

13  Revenue may adopt emergency rules under sections 120.536(1)

14  and 120.54(4), Florida Statutes, to implement the amnesty.

15  Such rules may provide forms and procedures for applying for

16  amnesty; for reporting the sales for which amnesty is sought;

17  and for ensuring the applicant's ongoing commitment to

18  registration, collection, and remittance of the state's gross

19  receipts tax. Notwithstanding any other law, the emergency

20  rules shall remain effective until the later of the date that

21  is 6 months after the date of adoption of the rule or the date

22  of final resolution of all amnesty applications filed pursuant

23  to this section. This section is effective upon this act

24  becoming a law.

25         Section 5.  Except as otherwise expressly provided in

26  this act and except for this section, which shall take effect

27  upon becoming a law, this act shall take effect January 1,

28  2006.

29  

30  

31  


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