Senate Bill sb0434
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Florida Senate - 2006 SB 434
By Senator Bennett
21-314-06
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 state or local government when
8 such property will become part of a public K-12
9 school owned by the governmental entity, if
10 specified conditions are met; providing duties
11 of such governmental entities, contractors, and
12 sellers with respect to documentation and
13 recordkeeping; providing for application of
14 penalties; providing an effective date.
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16 Be It Enacted by the Legislature of the State of Florida:
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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.
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1 Unless the conditions specified in subsection (18) are met,
2 this exemption shall not inure to any transaction otherwise
3 taxable under this chapter when payment is made by a
4 government employee by any means, including, but not limited
5 to, cash, check, or credit card when that employee is
6 subsequently reimbursed by the governmental entity. 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
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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(15), 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; PUBLIC K-12 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 K-12 school
28 construction are exempt if the following conditions are met:
29 1. At the time of the sale, the governmental entity or
30 political subdivision holds a current consumer's certificate
31 of exemption from the department.
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1 2. The tangible personal property purchased by the
2 contractor will go into or become part of a public K-12 school
3 owned by the governmental entity or political subdivision.
4 Tangible personal property purchased and used by a contractor
5 in the course of performing a contract which does not become
6 part of the public K-12 school is not exempt under this
7 subsection.
8 3. The governmental entity or political subdivision
9 bears the economic burden of the cost of the tangible personal
10 property, either through direct reimbursement of the cost to
11 the contractor under the contract or by inclusion of the cost
12 in the contractor's price for performance of the contract.
13 4. The governmental entity or political subdivision,
14 general contractor, or a subcontractor presents to the seller
15 before or at the time of a purchase:
16 a. A copy of a current, valid Florida consumer's
17 certificate of exemption held by the governmental entity or
18 political subdivision.
19 b. A signed and dated statement of an officer or
20 authorized employee of the governmental entity or political
21 subdivision which identifies a specific public K-12 school
22 project and names the contractor or contractors engaged to
23 perform work on the identified project who have been
24 authorized to make exempt purchases of materials for the
25 project.
26 c. A signed and dated statement of the purchasing
27 contractor certifying that all purchases made by that
28 contractor and identified at the time of purchase as property
29 that will go into or become part of the public K-12 school
30 project specified in the statement of the governmental entity
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1 or political subdivision will be for incorporation into that
2 public K-12 school project.
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4 A seller may rely on a single copy of the governmental
5 entity's or political subdivision's consumer's certificate of
6 exemption and a single signed and dated statement from the
7 governmental entity or political subdivision to make sales to
8 any contractor named on that statement if the other
9 certification and recordkeeping requirements of this
10 subsection have also been satisfied. A seller may rely on a
11 single signed statement of a purchasing contractor to make
12 sales to that contractor for the public K-12 school project
13 specified in that statement if the other certification and
14 recordkeeping requirements of this subsection have also been
15 satisfied.
16 5. The records of the seller contain documentation for
17 each exempt purchase as follows:
18 a. A purchase order from the contractor specifically
19 identifying, by description and quantity, the tangible
20 personal property being purchased for incorporation by the
21 contractor into a specifically named public K-12 school
22 project; or
23 b. Electronic or other records of the seller which
24 establish that the purchased tangible personal property,
25 identified by description and quantity, was charged by a
26 contractor who has provided a statement as described in
27 subparagraph 4. to an account to which only purchases for the
28 public K-12 school project specified in that statement are
29 charged.
30 6. The statements of the governmental entity or
31 political subdivision and of the purchasing contractor
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1 described in this paragraph must be dated and must contain the
2 following printed or typed declaration at the end of the
3 statement and immediately above the signature of the public
4 officer, employee, or contractor: "Under penalties of perjury
5 as provided in s. 92.525, Florida Statutes, I declare that I
6 have read the foregoing statement and that the facts stated in
7 it are true."
8 7. The seller verifies that a purchasing contractor is
9 named in the statement from the governmental entity or
10 political subdivision and that the project identified in the
11 statement of the contractor is the same project as that
12 identified in the statement of the governmental entity or
13 political subdivision before the exemption is granted as to
14 any purchase.
15 (b)1. The seller shall maintain in its records the
16 certificate, statements, and other records described in
17 paragraph (a) to document the exempt status of any sale for
18 the period of time during which the department may conduct an
19 audit of the seller's books and records. A dealer may, through
20 the informal protest provided for in s. 213.21 and the rules
21 of the department, provide the department with evidence of the
22 exempt status of a sale. A consumer's certificate of exemption
23 executed by a governmental entity or political subdivision
24 which was registered with the department at the time of sale,
25 a statement of the governmental entity or political
26 subdivision as described in sub-subparagraph (a)4.b. which had
27 been issued and signed before or on the date of the sale for
28 which exemption was claimed, and a purchasing contractor's
29 statement as described in sub-subparagraph (a)4.c. from a
30 contractor that could have issued such a statement at the time
31 of the sale shall be accepted by the department when submitted
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1 during the protest period but may not be accepted in any
2 proceeding under chapter 120 or any circuit court action
3 instituted under chapter 72. A purchase does not qualify for
4 exemption under this subsection if a contractor made the
5 purchase before the date on which a governmental entity or
6 political subdivision issued a signed and dated statement
7 authorizing that contractor to make exempt purchases for a
8 specified public K-12 school project.
9 2. A contractor that claims an exemption under this
10 subsection shall maintain records to establish that the
11 materials purchased were actually incorporated into the public
12 K-12 school project described in the contractor's statement.
13 The contractor must accrue and remit use tax on any items
14 purchased as exempt under this subsection which are not
15 incorporated into the public K-12 school project, unless the
16 items are transferred to the governmental entity or political
17 subdivision or returned to the seller for a credit to the
18 contractor's account. The contractor shall maintain records to
19 document any such transfers or returns.
20 3. Any person who fraudulently, for the purpose of
21 evading tax, issues a written statement for use in claiming an
22 exemption under this subsection for materials that do not
23 satisfy the requirements for the exemption is, in addition to
24 being liable for the payment of the tax due on the materials,
25 subject to the penalties provided in s. 212.085.
26 Section 2. This act shall take effect upon becoming a
27 law.
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2 SENATE SUMMARY
3 Provides an exemption from the tax on sales, use, and
other transactions for tangible personal property sold to
4 a contractor employed directly by or as an agent of the
United States Government or state or local government
5 when such property will become part of a public K-12
school owned by the governmental entity, if specified
6 conditions are met. Provides duties of such governmental
entities, contractors, and sellers with respect to
7 documentation and recordkeeping. Provides for the
application of penalties.
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