Senate Bill sb2066

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    Florida Senate - 2005                                  SB 2066

    By Senator Constantine





    22-1213A-05

  1                      A bill to be entitled

  2         An act relating to the tax on communication

  3         services; amending s. 202.11, F.S.; defining

  4         additional terms related to communication

  5         services; amending s. 202.125, F.S.; providing

  6         an exception for services purchased, used, or

  7         sold to provide access to the Internet;

  8         amending s. 202.16, F.S.; requiring a dealer to

  9         document the resale sale to prove the exempt

10         status of the sale; requiring that certain

11         documents be retained by the dealer; providing

12         alternative methods to document the exempt

13         nature of the sale; amending s. 202.19, F.S.;

14         clarifying the type of local fees the

15         communication services tax replaces; amending

16         s. 202.20, F.S.; clarifying the authority for

17         certain revenue adjustments; repealing s.

18         202.20(2)(a), F.S., relating to the allocation

19         of revenues by local government; amending s.

20         202.21, F.S.; deleting a provision granting

21         emergency powers to local governments to adjust

22         rates for the local communications service tax;

23         clarifying that the act is remedial in nature;

24         providing that the act does not grant any right

25         to a refund; providing an exception; providing

26         an effective date.

27  

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

29  

30  

31  

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    Florida Senate - 2005                                  SB 2066
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 1         Section 1.  Subsection (12) of section 202.11, Florida

 2  Statutes, is amended and subsections (26), (27), and (28) are

 3  added to that section to read:

 4         202.11  Definitions.--As used in this chapter:

 5         (12)  "Retail sale" means the sale of communications

 6  services for any purpose other than for resale or for use as a

 7  component part of or for integration into communications

 8  services to be resold in the ordinary course of business.

 9  However, any sale for resale must comply with s. 202.16(2) and

10  the rules adopted thereunder.

11         (26)  "Internet" means collectively the myriad of

12  computer and telecommunications facilities, including

13  equipment and operating software, that comprises the

14  interconnected world-wide network of networks that employs the

15  Transmission Control Protocol/Internet Protocol, or any

16  predecessor or successor protocols to such protocol, to

17  communicate information of all kinds by wire or radio.

18         (27)  "Internet access service" means a service that

19  enables users to access content, information, electronic mail,

20  or other services offered over the Internet.

21         (28)  "Internet access provider" means a person engaged

22  in the business of providing a computer and communications

23  facility through which a customer may access the Internet, but

24  does not include a common carrier to the extent that it

25  provides only communications services.

26         Section 2.  Subsection (5) is added to section 202.125,

27  Florida Statutes, to read:

28         202.125  Sales of communications services; specified

29  exemptions.--

30         (5)  The sale of communications services, if the

31  services are purchased, used, or sold by an Internet access

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    Florida Senate - 2005                                  SB 2066
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 1  provider to provide access to the Internet, is exempt from the

 2  taxes imposed or administered under ss. 202.12 and 202.19.

 3         Section 3.  Subsection (2) of section 202.16, Florida

 4  Statutes, is amended to read:

 5         202.16  Payment.--The taxes imposed or administered

 6  under this chapter and chapter 203 shall be collected from all

 7  dealers of taxable communications services on the sale at

 8  retail in this state of communications services taxable under

 9  this chapter and chapter 203. The full amount of the taxes on

10  a credit sale, installment sale, or sale made on any kind of

11  deferred payment plan is due at the moment of the transaction

12  in the same manner as a cash sale.

13         (2)(a)  A sale of communications services that are used

14  as a component part of or integrated into a communications

15  service or prepaid calling arrangement for resale, including,

16  but not limited to, carrier-access charges, interconnection

17  charges paid by providers of mobile communication services or

18  other communication services, charges paid by cable service

19  providers for the transmission of video or other programming

20  by another dealer of communications services, charges for the

21  sale of unbundled network elements, and any other intercompany

22  charges for the use of facilities for providing communications

23  services for resale, must be made in compliance with the rules

24  of the department. Any person who makes a sale for resale

25  which is not in compliance with these rules is liable for any

26  tax, penalty, and interest due for failing to comply, to be

27  calculated under pursuant to s. 202.28(2)(a).

28         (b)  Any dealer who makes a sale for resale shall

29  document the exempt nature of the transaction by retaining a

30  copy of the initial or annual resale certificate of the

31  purchaser which was issued under s. 202.17(6). In lieu of

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    Florida Senate - 2005                                  SB 2066
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 1  maintaining a copy of the certificate, a dealer may document,

 2  before the time of sale, an authorization number provided

 3  telephonically or electronically by the department, or by such

 4  other means established by rule of the department. A dealer

 5  may rely on an initial or annual resale certificate issued

 6  under s. 202.17(6), valid at the time of receipt from the

 7  purchaser, without seeking additional annual resale

 8  certificates from the purchaser, if the dealer makes recurring

 9  sales to the purchaser in the normal course of business on a

10  continuing basis. For purposes of this paragraph, the term

11  "recurring sales to a purchaser in the normal course of

12  business" means a sale in which the dealer extends credit to

13  the purchaser and records the debt as an account receivable,

14  or in which the dealer sells to a purchaser who has an

15  established cash account, similar to an open credit account.

16  For purposes of this paragraph, purchases are made from a

17  selling dealer on a continuing basis if the selling dealer

18  makes, in the normal course of business, sales to the

19  purchaser no less frequently than once in every 12-month

20  period. A dealer may, using the informal protest process

21  provided in s. 213.21 and the rules of the Department of

22  Revenue, provide the department with evidence of the exempt

23  status of a sale. Exemption certificates executed by entities

24  that were exempt at the time of sale, resale certificates

25  provided by purchasers who were active dealers at the time of

26  sale, and verification by the department of a purchaser's

27  active dealer status at the time of sale in lieu of a resale

28  certificate shall be accepted by the department when submitted

29  during the protest period, but may not be accepted in any

30  proceeding under chapter 120 or any circuit court action

31  instituted under chapter 72.

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    Florida Senate - 2005                                  SB 2066
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 1         Section 4.  Paragraph (a) of subsection (3) of section

 2  202.19, Florida Statutes, is amended to read:

 3         202.19  Authorization to impose local communications

 4  services tax.--

 5         (3)(a)  The tax authorized under this section includes

 6  any fee or other consideration, including, but not limited to,

 7  application fees, transfer fees, renewal fees, or claims for

 8  related costs, to which the municipality or county is

 9  otherwise entitled for granting permission to dealers of

10  communications services, including, but not limited to,

11  providers of cable television services, as authorized in 47

12  U.S.C. s. 542, to use or occupy its roads or rights-of-way for

13  the placement, construction, and maintenance of poles, wires,

14  and other fixtures used in the provision of communications

15  services.

16         Section 5.  Paragraph (a) of subsection (2) of section

17  202.20, Florida Statutes, is amended to read:

18         202.20  Local communications services tax conversion

19  rates.--

20         (2)(a)1.  With respect to any local taxing

21  jurisdiction, if, for the periods ending December 31, 2001;

22  March 31, 2002; June 30, 2002; or September 30, 2002, the

23  revenues received by that local government from the local

24  communications services tax imposed under subsection (1) are

25  less than the revenues received from the replaced revenue

26  sources for the corresponding 2000-2001 period; plus

27  reasonably anticipated growth in such revenues over the

28  preceding 1-year period, based on the average growth of such

29  revenues over the immediately preceding 5-year period; plus an

30  amount representing the revenues from the replaced revenue

31  sources for the 1-month period that the local taxing

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    Florida Senate - 2005                                  SB 2066
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 1  jurisdiction was required to forego, the governing authority

 2  may adjust the rate of the local communications services tax

 3  upward to the extent necessary to generate the entire

 4  shortfall in revenues within 1 year after the rate adjustment

 5  and by an amount necessary to generate the expected amount of

 6  revenue on an ongoing basis.

 7         2.  If complete data are not available at the time of

 8  determining whether the revenues received by a local

 9  government from the local communications services tax imposed

10  under subsection (1) are less than the revenues received from

11  the replaced revenue sources for the corresponding 2000-2001

12  period, as set forth in subparagraph 1., the local government

13  shall use the best data available for the corresponding

14  2000-2001 period in making such determination.

15         3.  The adjustment permitted under subparagraph 1. may

16  be made by emergency ordinance or resolution and may be made

17  notwithstanding the maximum rate established under s.

18  202.19(2) and notwithstanding any schedules or timeframes or

19  any other limitations contained in this chapter. The authority

20  to make the adjustment may be exercised only in the event of a

21  reallocation of revenue away from the local government by the

22  Department of Revenue or a dealer. The emergency ordinance or

23  resolution shall specify an effective date for the adjusted

24  rate, which shall be no less than 60 days after the date of

25  adoption of the ordinance or resolution and shall be effective

26  with respect to taxable services included on bills that are

27  dated on the first day of a month subsequent to the expiration

28  of the 60-day period. At the end of 1 year following the

29  effective date of the such adjusted rate, the local governing

30  authority shall, as soon as is consistent with s. 202.21,

31  reduce the rate by that portion of the emergency rate which

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    Florida Senate - 2005                                  SB 2066
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 1  was necessary to recoup the amount of revenues not received

 2  prior to the implementation of the emergency rate.

 3         4.  If, for the period October 1, 2001, through

 4  September 30, 2002, the revenues received by a local

 5  government from the local communications services tax

 6  conversion rate established under subsection (1), adjusted

 7  upward for the difference in rates between paragraphs (1)(a)

 8  and (b) or any other rate adjustments or base changes, are

 9  above the threshold of 10 percent more than the revenues

10  received from the replaced revenue sources for the

11  corresponding 2000-2001 period plus reasonably anticipated

12  growth in such revenues over the preceding 1-year period,

13  based on the average growth of such revenues over the

14  immediately preceding 5-year period, the governing authority

15  must adjust the rate of the local communications services tax

16  to the extent necessary to reduce revenues to the threshold by

17  emergency ordinance or resolution within the timeframes

18  established in subparagraph 3.  The foregoing rate adjustment

19  requirement shall not apply to a local government that adopts

20  a local communications services tax rate by resolution or

21  ordinance.  If complete data are not available at the time of

22  determining whether the revenues exceed the threshold, the

23  local government shall use the best data available for the

24  corresponding 2000-2001 period in making such determination.

25  This subparagraph shall not be construed as establishing a

26  right of action for any person to enforce this subparagraph or

27  challenge a local government's implementation of this

28  subparagraph.

29         Section 6.  Effective July 1, 2007, paragraph (a) of

30  subsection (2) of section 202.20, Florida Statutes, is

31  repealed.

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    Florida Senate - 2005                                  SB 2066
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 1         Section 7.  Effective July 1, 2007, section 202.21,

 2  Florida Statutes, is amended to read:

 3         202.21  Effective dates; procedures for informing

 4  dealers of communications services of tax levies and rate

 5  changes.--Any adoption, repeal, or change in the rate of a

 6  local communications services tax imposed under s. 202.19 is

 7  effective with respect to taxable services included on bills

 8  that are dated on or after the January 1 subsequent to the

 9  such adoption, repeal, or change. A municipality or county

10  adopting, repealing, or changing the rate of such tax must

11  notify the department of the adoption, repeal, or change by

12  September 1 immediately preceding such January 1. Notification

13  must be furnished on a form prescribed by the department and

14  must specify the rate of tax; the effective date of the

15  adoption, repeal, or change thereof; and the name, mailing

16  address, and telephone number of a person designated by the

17  municipality or county to respond to inquiries concerning the

18  tax. The department shall provide notice of such adoption,

19  repeal, or change to all affected dealers of communications

20  services at least 90 days before the effective date of the

21  tax. Any local government that adjusts the rate of its local

22  communications services tax by emergency ordinance or

23  resolution pursuant to s. 202.20(2) shall notify the

24  department of the new tax rate immediately upon its adoption.

25  The department shall provide written notice of the adoption of

26  the new rate to all affected dealers within 30 days after

27  receiving such notice. In any notice to providers or

28  publication of local tax rates for purposes of this chapter,

29  the department shall express the rate for a municipality or

30  charter county as the sum of the tax rates levied within such

31  jurisdiction pursuant to s. 202.19(2)(a) and (5), and shall

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    Florida Senate - 2005                                  SB 2066
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 1  express the rate for any other county as the sum of the tax

 2  rates levied pursuant to s. 202.19(2)(b) and (5). The

 3  department is not liable for any loss of or decrease in

 4  revenue by reason of any error, omission, or untimely action

 5  that results in the nonpayment of a tax imposed under s.

 6  202.19.

 7         Section 8.  The amendments made to section

 8  202.19(3)(a), Florida Statutes, by this act are remedial in

 9  nature and intended to clarify the law in effect on October 1,

10  2001, but do not grant any right to a refund of any fees or

11  charges paid before July 1, 2004, unless the payment was made

12  under written protest as to the authority of any local

13  government to impose the fees or costs on a dealer.

14         Section 9.  Except as otherwise provided in this act,

15  this act shall take effect July 1, 2005.

16  

17            *****************************************

18                          SENATE SUMMARY

19    Provides an exception for services purchased, used, or
      sold to provide access to the Internet. Requires a dealer
20    to document the resale sale to prove the exempt status of
      the sale. Requires that certain documents be retained by
21    the dealer. Provides alternative methods to document the
      exempt nature of the sale. Clarifies the type of local
22    fees the communication services tax replaces. Clarifies
      the authority for certain revenue adjustments. Deletes a
23    provision granting emergency powers to local governments
      to adjust rates for the local communications service tax.
24    Clarifies that the act is remedial in nature. Provides
      that the act does not grant any right to a refund.
25  

26  

27  

28  

29  

30  

31  

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