Senate Bill sb2458

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2005                                  SB 2458

    By Senator Atwater





    25-903A-05

  1                      A bill to be entitled

  2         An act relating to the tax on sales, use, and

  3         other transactions; amending s. 212.08, F.S.;

  4         providing an exemption for tangible personal

  5         property sold to a contractor employed directly

  6         by or as an agent of the United States

  7         Government or a state or local government when

  8         such property becomes part of a prekindergarten

  9         or elementary school owned by the governmental

10         entity under specified conditions; providing

11         duties of governmental entities, contractors,

12         and sellers relating to documentation and

13         recordkeeping; providing for application of

14         penalties; providing an effective date.

15  

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

17  

18         Section 1.  Subsection (6) of section 212.08, Florida

19  Statutes, is amended, and subsection (18) is added to that

20  section, to read:

21         212.08  Sales, rental, use, consumption, distribution,

22  and storage tax; specified exemptions.--The sale at retail,

23  the rental, the use, the consumption, the distribution, and

24  the storage to be used or consumed in this state of the

25  following are hereby specifically exempt from the tax imposed

26  by this chapter.

27         (6)  EXEMPTIONS; POLITICAL SUBDIVISIONS.--There are

28  also exempt from the tax imposed by this chapter sales made to

29  the United States Government, a state, or any county,

30  municipality, or political subdivision of a state when payment

31  is made directly to the dealer by the governmental entity.

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1  This exemption shall not inure to any transaction otherwise

 2  taxable under this chapter when payment is made by a

 3  government employee by any means, including, but not limited

 4  to, cash, check, or credit card when that employee is

 5  subsequently reimbursed by the governmental entity. Unless the

 6  conditions specified in subsection (18) are met, this

 7  exemption does not include sales of tangible personal property

 8  made to contractors employed either directly or as agents of

 9  any such government or political subdivision thereof when such

10  tangible personal property goes into or becomes a part of

11  public works owned by such government or political

12  subdivision. A determination whether a particular transaction

13  is properly characterized as an exempt sale to a government

14  entity or a taxable sale to a contractor shall be based on the

15  substance of the transaction rather than the form in which the

16  transaction is cast. The department shall adopt rules that

17  give special consideration to factors that govern the status

18  of the tangible personal property before its affixation to

19  real property. In developing these rules, assumption of the

20  risk of damage or loss is of paramount consideration in the

21  determination. This exemption does not include sales, rental,

22  use, consumption, or storage for use in any political

23  subdivision or municipality in this state of machines and

24  equipment and parts and accessories therefor used in the

25  generation, transmission, or distribution of electrical energy

26  by systems owned and operated by a political subdivision in

27  this state for transmission or distribution expansion.

28  Likewise exempt are charges for services rendered by radio and

29  television stations, including line charges, talent fees, or

30  license fees and charges for films, videotapes, and

31  transcriptions used in producing radio or television

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1  broadcasts. The exemption provided in this subsection does not

 2  include sales, rental, use, consumption, or storage for use in

 3  any political subdivision or municipality in this state of

 4  machines and equipment and parts and accessories therefor used

 5  in providing two-way telecommunications services to the public

 6  for hire by the use of a telecommunications facility, as

 7  defined in s. 364.02(14), and for which a certificate is

 8  required under chapter 364, which facility is owned and

 9  operated by any county, municipality, or other political

10  subdivision of the state.  Any immunity of any political

11  subdivision of the state or other entity of local government

12  from taxation of the property used to provide

13  telecommunication services that is taxed as a result of this

14  section is hereby waived.  However, the exemption provided in

15  this subsection includes transactions taxable under this

16  chapter which are for use by the operator of a public-use

17  airport, as defined in s. 332.004, in providing such

18  telecommunications services for the airport or its tenants,

19  concessionaires, or licensees, or which are for use by a

20  public hospital for the provision of such telecommunications

21  services.

22         (18)  EXEMPTIONS; ELEMENTARY SCHOOL CONSTRUCTION

23  CONTRACTOR PURCHASES.--

24         (a)  Sales of tangible personal property made to

25  contractors employed directly by or as agents of the United

26  States Government, a state, a county, a municipality, or a

27  political subdivision of a state for public prekindergarten or

28  elementary school construction are exempt from the tax imposed

29  by this chapter if all of the following conditions are met:

30  

31  

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1         1.  At the time of such sale, the governmental entity

 2  or political subdivision holds a current consumer's

 3  certificate of exemption from the department.

 4         2.  The tangible personal property purchased by the

 5  contractor will go into or become part of a public

 6  prekindergarten or elementary school owned by the governmental

 7  entity or political subdivision. Tangible personal property

 8  purchased and used by a contractor in the course of performing

 9  a contract which does not become part of the public

10  prekindergarten or elementary school is not exempt under this

11  subsection.

12         3.  The governmental entity or political subdivision

13  bears the economic burden of the cost of the tangible personal

14  property, through direct reimbursement of the cost to the

15  contractor under the contract or inclusion of the cost in the

16  contractor's price for performance of the contract.

17         4.  The governmental entity or political subdivision,

18  general contractor, or a subcontractor presents to the seller

19  before or at the time of a purchase:

20         a.  A copy of a current, valid Florida consumer's

21  certificate of exemption held by the governmental entity or

22  political subdivision.

23         b.  A signed and dated statement of an officer or

24  authorized employee of the governmental entity or political

25  subdivision which identifies a specific public prekindergarten

26  or elementary school project and names the contractor or

27  contractors engaged to perform work on the identified project

28  who have been authorized to make exempt purchases of materials

29  for the project.

30         c.  A signed and dated statement of the purchasing

31  contractor certifying that all purchases made by that

                                  4

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1  contractor and identified at the time of purchase to the

 2  public prekindergarten or elementary school project specified

 3  in the statement of the governmental entity or political

 4  subdivision will be for incorporation into that public

 5  prekindergarten or elementary school.

 6  

 7  A seller may rely on a single copy of the governmental

 8  entity's or political subdivision's consumer's certificate of

 9  exemption and a single signed and dated statement from the

10  governmental entity or political subdivision to make sales to

11  any contractor named on that statement so long as the other

12  certification and recordkeeping requirements of this

13  subsection are also satisfied. A seller may rely on a single

14  signed statement of a purchasing contractor to make sales to

15  that contractor for the public prekindergarten or elementary

16  school project specified in that statement so long as the

17  other certification and recordkeeping requirements of this

18  subsection are also satisfied.

19         5.  The records of the seller contain documentation for

20  each exempted purchase as follows:

21         a.  A purchase order from the contractor specifically

22  identifying, by description and quantity, the tangible

23  personal property being purchased for incorporation by the

24  contractor into a specifically named public prekindergarten or

25  elementary school project; or

26         b.  Electronic or other records of the seller which

27  establish that the purchased tangible personal property,

28  identified by description and quantity, was charged by a

29  contractor who has provided a statement as described in

30  subparagraph 4. to an account to which only purchases for the

31  

                                  5

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1  public prekindergarten or elementary school project specified

 2  in that statement are charged.

 3         6.  The statements of the governmental entity or

 4  political subdivision and of the purchasing contractor

 5  described in this paragraph are dated and contain the

 6  following printed or typed declaration at the end of the

 7  statement and immediately above the signature of the public

 8  officer, employee, or contractor: "Under penalties of perjury

 9  as provided in section 92.525, Florida Statutes, I declare

10  that I have read the foregoing statement and that the facts

11  stated in it are true."

12         7.  The seller verifies that a purchasing contractor is

13  named in the statement from the governmental entity or

14  political subdivision and that the project identified in the

15  statement of the contractor is the same project as that

16  identified in the statement of the governmental entity or

17  political subdivision before the exemption is granted as to

18  any purchase.

19         (b)1.  The seller must maintain in its records the

20  certificate, statements, and other records described in

21  paragraph (a) to document the exempt status of any sale for

22  the period of time during which the department may conduct an

23  audit of the seller's books and records. A dealer may, through

24  the informal protest provided for in s. 213.21 and the rules

25  of the department, provide the department with evidence of the

26  exempt status of a sale. A consumer's certificate of exemption

27  executed by a governmental entity or political subdivision

28  that was registered with the department at the time of sale, a

29  statement of the governmental entity or political subdivision

30  as described in sub-subparagraph (a)4.b. which had been issued

31  and signed before or on the date of the sale for which

                                  6

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1  exemption was claimed, and a purchasing contractor's statement

 2  as described in sub-subparagraph (a)4.c. from a contractor

 3  that could have issued such statement at the time of the sale

 4  shall be accepted by the department when submitted during the

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

 6  under chapter 120 or any circuit court action instituted under

 7  chapter 72. An exemption may not be recognized for any

 8  purchase by a contractor before the date on which a

 9  governmental entity or political subdivision has issued a

10  signed and dated statement authorizing that contractor to make

11  exempt purchases for a specified public prekindergarten or

12  elementary school project.

13         2.  A contractor that claims an exemption under this

14  subsection must maintain records to establish that the

15  materials purchased were actually incorporated into the public

16  prekindergarten or elementary school project described in the

17  contractor's statement. The contractor must accrue and remit

18  use tax on any items that are purchased as exempt under this

19  subsection which are not incorporated into the public

20  prekindergarten or elementary school project, unless such

21  items are transferred to the governmental entity or political

22  subdivision or returned to the seller for a credit to the

23  contractor's account. The contractor must maintain records to

24  document any such transfers or returns.

25         3.  Any person who fraudulently, for the purpose of

26  evading taxes, issues a written statement for use in claiming

27  an exemption under this subsection for materials that do not

28  satisfy the requirements for such exemption shall, in addition

29  to being liable for the payment of the tax due on such

30  materials, be subject to the penalties provided in s. 212.085.

31  

                                  7

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2458
    25-903A-05




 1         Section 2.  This act shall take effect upon becoming a

 2  law.

 3  

 4            *****************************************

 5                          SENATE SUMMARY

 6    Provides an exemption for tangible personal property sold
      to a contractor employed by or as an agent of the
 7    federal, state, or local government when such property
      becomes part of a prekindergarten or elementary school
 8    owned by the governmental entity if specified conditions
      are satisfied. Provides duties of governmental entities,
 9    contractors, and sellers relating to documentation and
      recordkeeping. Provides for application of penalties.
10  

11  

12  

13  

14  

15  

16  

17  

18  

19  

20  

21  

22  

23  

24  

25  

26  

27  

28  

29  

30  

31  

                                  8

CODING: Words stricken are deletions; words underlined are additions.