CS/HB 907

1	A bill to be entitled
2	An act relating to the transfer of tax liability; amending
3	s. 213.758, F.S.; providing definitions; revising
4	provisions relating to tax liability when a person
5	transfers or quits a business; excluding the corporate
6	income tax from provisions relating to the transfer of tax
7	liabilities when a business is transferred; providing that
8	the transfer of the assets of a business or stock of goods
9	of a business under certain circumstances constitutes a
10	transfer of the business; requiring the Department of
11	Revenue to provide certain notification to a business
12	before a circuit court may enjoin business activity by
13	that business; providing that transferees of the business
14	are liable for certain taxes unless specified conditions
15	are met; requiring the department to conduct certain
16	audits relating to the tax liability of transferors and
17	transferees of a business within a specified time period;
18	limiting a transferee who is liable for unpaid taxes from
19	engaging in business activities under certain
20	circumstances; providing an exception during the pendency
21	of a timely filed appeal; providing for the posting of
22	security during the pendency of an appeal under certain
23	circumstances; requiring certain notification by the
24	Department of Revenue to a transferee before a circuit
25	court may enjoin business activity in an action brought by
26	the Department of Legal Affairs seeking an injunction;
27	specifying a transferor and transferee of the assets of a
28	business are jointly and severally liable for certain tax
29	payments up to a specified maximum amount; specifying the
30	maximum liability of a transferee; providing methods for
31	calculating the fair market value or total purchase price
32	of specified business transfers to determine maximum tax
33	liability of transferees; repealing s. 202.31, F.S.,
34	relating to the tax liability and criminal liability of
35	dealers of communications services who make certain
36	transfers related to a communications services business;
37	repealing s. 212.10, F.S., relating to a dealer's tax
38	liability and criminal liability for sales tax when
39	certain transfers of a business occur; providing an
40	effective date.
41
42	Be It Enacted by the Legislature of the State of Florida:
43
44	Section 1.  Section 213.758, Florida Statutes, is amended
45	to read:
46	213.758  Transfer of tax liabilities.-
47	(1)  As used in this section, the term:
48	(a)  "Business" means any activity regularly engaged in by
49	any person, or caused to be engaged in by any person, for the
50	purpose of direct or indirect, private or public gain, benefit,
51	or advantage. The term does not include occasional or isolated
52	sales or transactions involving property or services by a person
53	who does not hold himself or herself out as engaged in business.
54	A discrete division or portion of a business is not a separate
55	business and must be aggregated with all other divisions or
56	portions that constitute a business if the division or portion
57	is not a separate legal entity.
58	(b)  "Financial institution" means a financial institution
59	as defined in s. 655.005 and any person who controls, is
60	controlled by, or is under common control with a financial
61	institution as defined in s. 655.005.
62	(c)  "Insider" means a person as defined in s. 726.102(7),
63	and a member, manager, or managing member of a limited liability
64	company.
65	(d)(a)  "Involuntary transfer" means a transfer of a
66	business or stock of goods made without the consent of the
67	transferor, including, but not limited to, a transfer:
68	1.  That occurs due to the foreclosure of a security
69	interest issued to a person who is not an insider as defined in
70	s. 726.102;
71	2.  That results from an eminent domain or condemnation
72	action;
73	3.  Pursuant to chapter 61, chapter 702, or the United
74	States Bankruptcy Code;
75	4.  To a financial institution, as defined in s. 655.005,
76	if the transfer is made to satisfy the transferor's debt to the
77	financial institution; or
78	5.  To a third party to the extent that the proceeds are
79	used to satisfy the transferor's indebtedness to a financial
80	institution as defined in s. 655.005. If the third party
81	receives assets worth more than the indebtedness, the transfer
82	of the excess may not be deemed an involuntary transfer.
83	(e)  "Stock of goods" means the inventory of a business
84	held for sale to customers in the ordinary course of business.
85	(f)  "Tax" means any tax, interest, penalty, surcharge, or
86	fee administered by the department pursuant to chapter 443 or
87	any of the chapters specified in s. 213.05, excluding corporate
88	income tax.
89	(g)(b)  "Transfer" means every mode, direct or indirect,
90	with or without consideration, of disposing of or parting with a
91	business, assets of the business, or stock of goods, and
92	includes, but is not limited to, assigning, conveying, demising,
93	gifting, granting, or selling, other than to customers in the
94	ordinary course of business, to a transferee or to a group of
95	transferees who are acting in concert. A business is transferred
96	when there is a transfer of more than 50 percent of:
97	1.  The business;
98	2.  The assets of the business; or
99	3.  The stock of goods of the business.
100	(2)  A taxpayer in business who is liable for any tax
101	arising from the operation of that business, interest, penalty,
102	surcharge, or fee administered by the department pursuant to
103	chapter 443 or described in s. 72.011(1), excluding corporate
104	income tax, and who quits the a business without the benefit of
105	a purchaser, successor, or assignee, or without transferring the
106	business, assets of the business, or stock of goods to a
107	transferee, must file a final return for the business and make
108	full payment of all taxes arising from the operation of that
109	business within 15 days after quitting the business. A taxpayer
110	who fails to file a final return and make payment may not engage
111	in any business in this state until the final return has been
112	filed and all taxes, interest, or penalties due have been paid.
113	The Department of Legal Affairs may seek an injunction at the
114	request of the department to prevent further business activity
115	of a taxpayer who fails to file a final return and make payment
116	of the taxes associated with the operation of the business until
117	such taxes tax, interest, or penalties are paid. A temporary
118	injunction enjoining further business activity may be granted by
119	a circuit court with jurisdiction over the taxpayer if the
120	department has provided at least 20 days' prior written notice
121	to the taxpayer without notice. The written notice may be
122	provided to the taxpayer before the filing of the lawsuit
123	seeking the injunction.
124	(3)  A taxpayer who is liable for taxes with respect to a
125	business, interest, or penalties levied under chapter 443 or any
126	of the chapters specified in s. 213.05, excluding corporate
127	income tax, who transfers the taxpayer's business, assets of the
128	business, or stock of goods, must file a final return and make
129	full payment within 15 days after the date of transfer.
130	(4)(a)  A transferee, or a group of transferees acting in
131	concert, of more than 50 percent of a business, assets of a
132	business, or stock of goods is liable for any unpaid tax,
133	interest, or penalties owed by the transferor arising from the
134	operation of that business unless:
135	1.a.  The transferor provides a receipt or certificate of
136	compliance from the department to the transferee showing that
137	the transferor has not received a notice of audit and the
138	transferor has filed all required tax returns and has paid all
139	tax arising is not liable for taxes, interest, or penalties from
140	the operation of the business identified on the returns filed;
141	and
142	b.  There were no insiders in common between the transferor
143	and the transferee at the time of the transfer; or and
144	2.  The department finds that the transferor is not liable
145	for taxes, interest, or penalties after an audit of the
146	transferor's books and records. The audit may be requested by
147	the transferee or the transferor and, if not done pursuant to
148	the certified audit program under s. 213.285, must be completed
149	by the department within 90 days after the records are made
150	available to the department. The department may charge a fee for
151	the cost of the audit if it has not issued a notice of intent to
152	audit by the time the request for the audit is received.
153	(b)  A transferee may withhold a portion of the
154	consideration for a business, assets of the business, or stock
155	of goods to pay the tax taxes, interest, or penalties owed to
156	the state by the transferor taxpayer arising from the operation
157	of the business. The transferee shall pay the withheld
158	consideration to the state within 30 days after the date of the
159	transfer. If the consideration withheld is less than the
160	transferor's liability, the transferor remains liable for the
161	deficiency.
162	(c)  A transferee who is liable for unpaid tax of a
163	transferor and who fails to pay the taxes due within 60 days
164	after written notice from the department may not engage in any
165	business in the state until the taxes are paid unless an action
166	is filed pursuant to subsection (7). If an action is timely
167	filed, the transferee may continue to engage in business until a
168	final determination is entered against the transferee, although
169	the court may, during the pendency of the action, require the
170	transferee to post a bond or other security if the department
171	establishes that it is likely to prevail and the collection of
172	the unpaid tax would be jeopardized by delay acquires the
173	business or stock of goods and fails to pay the taxes, interest,
174	or penalties due may not engage in any business in the state
175	until the taxes, interest, or penalties are paid. The Department
176	of Legal Affairs may seek an injunction at the request of the
177	department to prevent further business activity of a transferee
178	who is liable for unpaid tax of a transferor and who fails to
179	pay or cause to be paid the transferee's maximum liability for
180	such tax due until such maximum liability for the tax is,
181	interest, or penalties are paid. A temporary injunction
182	enjoining further business activity may be granted by a circuit
183	court if the department has provided at least 20 days' prior
184	written notice to the taxpayer without notice. The written
185	notice may be provided to the taxpayer before the filing of the
186	lawsuit seeking the injunction.
187	(5)  The transferee, or transferees acting in concert, of
188	more than 50 percent of a business, assets of the business, or
189	stock of goods who are liable for any tax pursuant to this
190	section shall be are jointly and severally liable with the
191	transferor for the payment of the tax taxes, interest, or
192	penalties owed to the state from the operation of the business
193	by the transferor up to the transferee's maximum liability for
194	such tax due.
195	(6)  The maximum liability of a transferee pursuant to this
196	section is equal to the fair market value of the business,
197	assets of the business, or stock of goods property transferred
198	to the transferee or the total purchase price paid by the
199	transferee for the business, assets of the business, or stock of
200	goods, whichever is greater.
201	(a)  The fair market value must be determined net of any
202	liens or liabilities, with the exception of liens or liabilities
203	owed to insiders.
204	(b)  The total purchase price must be determined net of
205	liens and liabilities against the assets, with the exception of:
206	1.  Liens or liabilities owed to insiders.
207	2.  Liens or liabilities assumed by the transferee that are
208	not liens or liabilities owed to insiders.
209	(7)  After notice by the department of transferee liability
210	under this section, the transferee has 60 days within which to
211	file an action as provided in chapter 72.
212	(8)  This section does not impose liability on a transferee
213	of a business or stock of goods pursuant to an involuntary
214	transfer.
215	(9)  The department may adopt rules necessary to administer
216	and enforce this section.
217	Section 2.  Sections 202.31 and 212.10, Florida Statutes,
218	are repealed.
219	Section 3.  This act shall take effect July 1, 2011.

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