Senate Bill sb2066c1

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    Florida Senate - 2005                           CS for SB 2066

    By the Committee on Government Efficiency Appropriations; and
    Senator Constantine




    593-2116-05

  1                      A bill to be entitled

  2         An act relating to the communications services

  3         tax; amending s. 202.16, F.S.; requiring

  4         dealers to document exempt sales for resale;

  5         providing requirements; providing a definition;

  6         providing construction; providing for dealer

  7         provision of evidence of the exempt status of

  8         certain sales through an informal protest

  9         process; requiring the Department of Revenue to

10         accept certain evidence during the protest

11         period; providing limitations; providing for

12         retroactive application; requiring the

13         Department of Revenue to establish a toll-free

14         telephone number for the purpose of verifying

15         registration numbers and resale certificates;

16         requiring the department to establish a system

17         for receiving information from dealers

18         regarding certificate numbers; amending s.

19         202.19, F.S.; clarifying a characterization of

20         the local communications services tax as

21         including certain fees and being in lieu of

22         such fees; amending s. 202.20, F.S.; limiting

23         local governmental authority to make certain

24         rate adjustments in the tax under certain

25         circumstances; deleting obsolete provisions

26         relating to making certain adjustments in the

27         tax for certain periods; amending s. 202.21,

28         F.S.; deleting provisions relating to local

29         government adjustments of the tax by emergency

30         ordinance or resolution to conform; specifying

31         that certain amendments are remedial in nature

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    Florida Senate - 2005                           CS for SB 2066
    593-2116-05




 1         and clarify certain provisions of law but do

 2         not grant rights to a refund of certain fees or

 3         charges under certain circumstances; providing

 4         effective dates.

 5  

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

 7  

 8         Section 1.  Effective upon this act becoming a law, and

 9  operating retroactively to December 31, 2004, subsection (2)

10  of section 202.16, Florida Statutes, is amended to read:

11         202.16  Payment.--The taxes imposed or administered

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

13  dealers of taxable communications services on the sale at

14  retail in this state of communications services taxable under

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

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

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

18  in the same manner as a cash sale.

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

20  as a component part of or integrated into a communications

21  service or prepaid calling arrangement for resale, including,

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

23  charges paid by providers of mobile communication services or

24  other communication services, charges paid by cable service

25  providers for the transmission of video or other programming

26  by another dealer of communications services, charges for the

27  sale of unbundled network elements, and any other intercompany

28  charges for the use of facilities for providing communications

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

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

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

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    Florida Senate - 2005                           CS for SB 2066
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 1  tax, penalty, and interest due for failing to comply, to be

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

 3         (b)1.  Any dealer who makes a sale for resale shall

 4  document the exempt nature of the transaction, as established

 5  by rules adopted by the department, by retaining a copy of the

 6  purchaser's initial or annual resale certificate issued

 7  pursuant to s. 202.17(6). In lieu of maintaining a copy of the

 8  certificate, a dealer may document, prior to the time of sale,

 9  an authorization number, provided telephonically or

10  electronically by the department or by such other means

11  established by rule of the department. The dealer may rely on

12  an initial or annual resale certificate issued pursuant to s.

13  202.17(6), valid at the time of receipt from the purchaser,

14  without seeking additional annual resale certificates from

15  such purchaser, if the dealer makes recurring sales to the

16  purchaser in the normal course of business on a continual

17  basis. For purposes of this paragraph, the term "recurring

18  sales to a purchaser in the normal course of business" means a

19  sale in which the dealer extends credit to the purchaser and

20  records the debt as an account receivable, or in which the

21  dealer sells to a purchaser who has an established cash

22  account, similar to an open credit account. For purposes of

23  this paragraph, purchases are made from a selling dealer on a

24  continual basis if the selling dealer makes, in the normal

25  course of business, sales to the purchaser no less frequently

26  than once in every 12-month period.

27         2.  A dealer may, through the informal protest process

28  provided for in s. 213.21 and the rules of the department,

29  provide the department with evidence of the exempt status of a

30  sale. Exemption certificates executed by entities that were

31  exempt at the time of sale, resale certificates provided by

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    Florida Senate - 2005                           CS for SB 2066
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 1  purchasers who were active dealers at the time of sale, and

 2  verification by the department of a purchaser's active dealer

 3  status at the time of sale in lieu of a resale certificate

 4  shall be accepted by the department when submitted during the

 5  protest period but may not be accepted in any proceeding under

 6  chapter 120 or any circuit court action instituted under

 7  chapter 72.

 8         Section 2.  Effective January 1, 2006, the Department

 9  of Revenue shall establish a toll-free telephone number for

10  the verification of valid registration numbers and resale

11  certificates. The system must be adequate to guarantee a low

12  busy rate, must respond to keypad inquiries, and must provide

13  data that is updated daily.

14         Section 3.  The Department of Revenue shall establish a

15  system, effective January 1, 2006, for receiving information

16  from dealers regarding certificate numbers of those who are

17  seeking to make purchases for resale. The department must

18  provide such dealers, free of charge, with verification of

19  numbers that are cancelled or invalid.

20         Section 4.  Paragraph (a) of subsection (3) of section

21  202.19, Florida Statutes, is amended to read:

22         202.19  Authorization to impose local communications

23  services tax.--

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

25  and is in lieu of any fee or other consideration, including,

26  but not limited to, application fees, transfer fees, renewal

27  fees, or claims for related costs, to which the municipality

28  or county is otherwise entitled for granting permission to

29  dealers of communications services, including, but not limited

30  to, providers of cable television services, as authorized in

31  47 U.S.C. s. 542, to use or occupy its roads or rights-of-way

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    Florida Senate - 2005                           CS for SB 2066
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 1  for the placement, construction, and maintenance of poles,

 2  wires, and other fixtures used in the provision of

 3  communications services.

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

 5  202.20, Florida Statutes, is amended to read:

 6         202.20  Local communications services tax conversion

 7  rates.--

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

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

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

11  revenues received by that local government from the local

12  communications services tax imposed under subsection (1) are

13  less than the revenues received from the replaced revenue

14  sources for the corresponding 2000-2001 period; plus

15  reasonably anticipated growth in such revenues over the

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

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

18  amount representing the revenues from the replaced revenue

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

20  jurisdiction was required to forego, the governing authority

21  may adjust the rate of the local communications services tax

22  upward to the extent necessary to generate the entire

23  shortfall in revenues within 1 year after the rate adjustment

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

25  revenue on an ongoing basis.

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

27  determining whether the revenues received by a local

28  government from the local communications services tax imposed

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

30  the replaced revenue sources for the corresponding 2000-2001

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

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    Florida Senate - 2005                           CS for SB 2066
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 1  shall use the best data available for the corresponding

 2  2000-2001 period in making such determination.

 3         3.  The adjustment permitted under subparagraph 1. may

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

 5  notwithstanding the maximum rate established under s.

 6  202.19(2) and notwithstanding any schedules or timeframes or

 7  any other limitations contained in this chapter. The authority

 8  of a local government to make such adjustment may be exercised

 9  only if the department or a dealer reallocates revenue away

10  from the local government. The emergency ordinance or

11  resolution shall specify an effective date for the adjusted

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

13  adoption of the ordinance or resolution and shall be effective

14  with respect to taxable services included on bills that are

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

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

17  effective date of such adjusted rate, the local governing

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

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

20  was necessary to recoup the amount of revenues not received

21  prior to the implementation of the emergency rate.

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

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

24  government from the local communications services tax

25  conversion rate established under subsection (1), adjusted

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

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

28  above the threshold of 10 percent more than the revenues

29  received from the replaced revenue sources for the

30  corresponding 2000-2001 period plus reasonably anticipated

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

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    Florida Senate - 2005                           CS for SB 2066
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 1  based on the average growth of such revenues over the

 2  immediately preceding 5-year period, the governing authority

 3  must adjust the rate of the local communications services tax

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

 5  emergency ordinance or resolution within the timeframes

 6  established in subparagraph 3. The foregoing rate adjustment

 7  requirement shall not apply to a local government that adopts

 8  a local communications services tax rate by resolution or

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

10  determining whether the revenues exceed the threshold, the

11  local government shall use the best data available for the

12  corresponding 2000-2001 period in making such determination.

13  This subparagraph shall not be construed as establishing a

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

15  challenge a local government's implementation of this

16  subparagraph.

17         Section 6.  Effective July 1, 2007, subsection (2) of

18  section 202.20, Florida Statutes, as amended by this act, is

19  amended to read:

20         202.20  Local communications services tax conversion

21  rates.--

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

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

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

25  revenues received by that local government from the local

26  communications services tax imposed under subsection (1) are

27  less than the revenues received from the replaced revenue

28  sources for the corresponding 2000-2001 period; plus

29  reasonably anticipated growth in such revenues over the

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

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

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    Florida Senate - 2005                           CS for SB 2066
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 1  amount representing the revenues from the replaced revenue

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

 3  jurisdiction was required to forego, the governing authority

 4  may adjust the rate of the local communications services tax

 5  upward to the extent necessary to generate the entire

 6  shortfall in revenues within 1 year after the rate adjustment

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

 8  revenue on an ongoing basis.

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

10  determining whether the revenues received by a local

11  government from the local communications services tax imposed

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

13  the replaced revenue sources for the corresponding 2000-2001

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

15  shall use the best data available for the corresponding

16  2000-2001 period in making such determination.

17         3.  The adjustment permitted under subparagraph 1. may

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

19  notwithstanding the maximum rate established under s.

20  202.19(2) and notwithstanding any schedules or timeframes or

21  any other limitations contained in this chapter. The authority

22  of a local government to make such adjustment may be exercised

23  only if the department or a dealer reallocates revenue away

24  from the local government. The emergency ordinance or

25  resolution shall specify an effective date for the adjusted

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

27  adoption of the ordinance or resolution and shall be effective

28  with respect to taxable services included on bills that are

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

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

31  effective date of such adjusted rate, the local governing

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    Florida Senate - 2005                           CS for SB 2066
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 1  authority shall, as soon as is consistent with s. 202.21,

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

 3  was necessary to recoup the amount of revenues not received

 4  prior to the implementation of the emergency rate.

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

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

 7  government from the local communications services tax

 8  conversion rate established under subsection (1), adjusted

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

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

11  above the threshold of 10 percent more than the revenues

12  received from the replaced revenue sources for the

13  corresponding 2000-2001 period plus reasonably anticipated

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

15  based on the average growth of such revenues over the

16  immediately preceding 5-year period, the governing authority

17  must adjust the rate of the local communications services tax

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

19  emergency ordinance or resolution within the timeframes

20  established in subparagraph 3. The foregoing rate adjustment

21  requirement shall not apply to a local government that adopts

22  a local communications services tax rate by resolution or

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

24  determining whether the revenues exceed the threshold, the

25  local government shall use the best data available for the

26  corresponding 2000-2001 period in making such determination.

27  This subparagraph shall not be construed as establishing a

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

29  challenge a local government's implementation of this

30  subparagraph.

31  

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    Florida Senate - 2005                           CS for SB 2066
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 1         (b)  The term Except as otherwise provided in this

 2  subsection, "replaced revenue sources," as used in this

 3  section, means the following taxes, charges, fees, or other

 4  impositions to the extent that the respective local taxing

 5  jurisdictions were authorized to impose them prior to July 1,

 6  2000.

 7         (a)1.  With respect to municipalities and charter

 8  counties and the taxes authorized by s. 202.19(1):

 9         1.a.  The public service tax on telecommunications

10  authorized by former s. 166.231(9).

11         2.b.  Franchise fees on cable service providers as

12  authorized by 47 U.S.C. s. 542.

13         3.c.  The public service tax on prepaid calling

14  arrangements.

15         4.d.  Franchise fees on dealers of communications

16  services which use the public roads or rights-of-way, up to

17  the limit set forth in s. 337.401. For purposes of calculating

18  rates under this section, it is the legislative intent that

19  charter counties be treated as having had the same authority

20  as municipalities to impose franchise fees on recurring local

21  telecommunication service revenues prior to July 1, 2000.

22  However, the Legislature recognizes that the authority of

23  charter counties to impose such fees is in dispute, and the

24  treatment provided in this section is not an expression of

25  legislative intent that charter counties actually do or do not

26  possess such authority.

27         5.e.  Actual permit fees relating to placing or

28  maintaining facilities in or on public roads or rights-of-way,

29  collected from providers of long-distance, cable, and mobile

30  communications services for the fiscal year ending September

31  30, 1999; however, if a municipality or charter county elects

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    Florida Senate - 2005                           CS for SB 2066
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 1  the option to charge permit fees pursuant to s.

 2  337.401(3)(c)1.a., such fees shall not be included as a

 3  replaced revenue source.

 4         (b)2.  With respect to all other counties and the taxes

 5  authorized in s. 202.19(1), franchise fees on cable service

 6  providers as authorized by 47 U.S.C. s. 542.

 7         Section 7.  Effective July 1, 2007, section 202.21,

 8  Florida Statutes, is amended to read:

 9         202.21  Effective dates; procedures for informing

10  dealers of communications services of tax levies and rate

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

12  local communications services tax imposed under s. 202.19 is

13  effective with respect to taxable services included on bills

14  that are dated on or after the January 1 subsequent to such

15  adoption, repeal, or change. A municipality or county

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

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

18  September 1 immediately preceding such January 1. Notification

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

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

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

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

23  municipality or county to respond to inquiries concerning the

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

25  repeal, or change to all affected dealers of communications

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

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

28  communications services tax by emergency ordinance or

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

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

31  The department shall provide written notice of the adoption of

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    Florida Senate - 2005                           CS for SB 2066
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 1  the new rate to all affected dealers within 30 days after

 2  receiving such notice. In any notice to providers or

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

 4  the department shall express the rate for a municipality or

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

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

 7  express the rate for any other county as the sum of the tax

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

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

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

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

12  202.19.

13         Section 8.  The amendments to section 202.19(3)(a),

14  Florida Statutes, contained in this act are remedial in nature

15  and intended to clarify the law in effect on October 1, 2001,

16  but do not grant any right to a refund of any fees or charges

17  paid prior to July 1, 2004, unless the payment was made under

18  written protest as to the authority of any local government to

19  impose such fees or costs on a dealer.

20         Section 9.  Except as otherwise expressly provided in

21  this act, this act shall take effect upon becoming a law.

22  

23          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
24                         Senate Bill 2066

25                                 

26  The committee substitute deletes an exemption for the sales of
    communications services if the services are purchased, used,
27  or sold by an Internet access provider to provide access to
    the Internet. It deletes definitions of "Internet," "Internet
28  access service," and "Internet access provider." It also
    requires the Department of Revenue to establish a toll-free
29  telephone number for verifying registration numbers and resale
    certificates and to create an automated system to provide
30  authorization numbers for sales for resale by January 1, 2006.

31  

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