CS/CS/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; providing that the transfer
6	of the assets of a business or stock of goods of a
7	business under certain circumstances is considered a
8	transfer of the business; requiring the Department of
9	Revenue to provide certain notification to a business
10	before a circuit court shall temporarily enjoin business
11	activity by that business; providing that transferees of
12	the business are liable for certain taxes unless specified
13	conditions are met; requiring the department to conduct
14	certain audits relating to the tax liability of
15	transferors and transferees of a business within a
16	specified time period; requiring certain notification by
17	the Department of Revenue to a transferee before a circuit
18	court shall enjoin business activity in an action brought
19	by the Department of Legal Affairs seeking an injunction;
20	specifying a transferor and transferee of the assets of a
21	business are jointly and severally liable for certain tax
22	payments up to a specified maximum amount; specifying the
23	maximum liability of a transferee; providing methods for
24	calculating the fair market value or total purchase price
25	of specified business transfers to determine maximum tax
26	liability of transferees; excluding certain transferees
27	from tax liability when the transfer consists only of
28	specified assets; amending s. 213.053, F.S.; authorizing
29	the Department of Revenue to provide certain tax
30	information to a transferee against whom tax liability is
31	being asserted pursuant to s. 213.758, F.S.; repealing s.
32	202.31, F.S., relating to the tax liability and criminal
33	liability of dealers of communications services who make
34	certain transfers related to a communications services
35	business; repealing s. 212.10, F.S., relating to a
36	dealer's tax liability and criminal liability for sales
37	tax when certain transfers of a business occur; providing
38	an effective date.
39
40	Be It Enacted by the Legislature of the State of Florida:
41
42	Section 1.  Section 213.758, Florida Statutes, is amended
43	to read:
44	213.758  Transfer of tax liabilities.-
45	(1)  As used in this section, the term:
46	(a)  "Business" means any activity regularly engaged in by
47	any person, or caused to be engaged in by any person, for the
48	purpose of private or public gain, benefit, or advantage. The
49	term does not include occasional or isolated sales or
50	transactions involving property or services by a person who does
51	not hold himself or herself out as engaged in business. A
52	discrete division or portion of a business is not a separate
53	business and must be aggregated with all other divisions or
54	portions that constitute a business if the division or portion
55	is not a separate legal entity.
56	(b)  "Financial institution" means a financial institution
57	as defined in s. 655.005 and any person who controls, is
58	controlled by, or is under common control with a financial
59	institution as defined in s. 655.005.
60	(c)  "Insider" means a person as defined in s. 726.102(7),
61	and a manager of, a managing member of, a person who controls a
62	limited liability company or a relative thereof as defined in s.
63	726.102(11).
64	(d)(a)  "Involuntary transfer" means a transfer of a
65	business, assets of a business, or stock of goods of a business
66	made without the consent of the transferor, including, but not
67	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 chapter
88	220, the corporate income tax code.
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 of the
92	business, and includes, but is not limited to, assigning,
93	conveying, demising, gifting, granting, or selling, other than
94	to customers in the ordinary course of business, to a transferee
95	or to a group of transferees who are acting in concert. A
96	business is considered transferred when there is a transfer of
97	more than 50 percent of:
98	1.  The business;
99	2.  The assets of the business; or
100	3.  The stock of goods of the business.
101	(2)  A taxpayer engaged in a business who is liable for any
102	tax arising from the operation of that business, interest,
103	penalty, surcharge, or fee administered by the department
104	pursuant to chapter 443 or described in s. 72.011(1), excluding
105	corporate income tax, and who quits the a business without the
106	benefit of a purchaser, successor, or assignee, or without
107	transferring the business, assets of the business, or stock of
108	goods of a business to a transferee, must file a final return
109	for the business and make full payment of all taxes arising from
110	the operation of that business within 15 days after quitting the
111	business. A taxpayer who fails to file a final return and make
112	payment may not engage in any business in this state until the
113	final return has been filed and all taxes, interest, or
114	penalties due have been paid. The Department of Legal Affairs
115	may seek an injunction at the request of the department to
116	prevent further business activity of a taxpayer who fails to
117	file a final return and make payment of the taxes associated
118	with the operation of the business until such taxes tax,
119	interest, or penalties are paid. A temporary injunction
120	enjoining further business activity shall may be granted by a
121	circuit court if the department has provided at least 20 days'
122	prior written notice to the taxpayer without notice.
123	(3)  A taxpayer who is liable for taxes with respect to a
124	business, interest, or penalties levied under chapter 443 or any
125	of the chapters specified in s. 213.05, excluding corporate
126	income tax, who transfers the taxpayer's business, assets of the
127	business, or stock of goods of the business, must file a final
128	return and make full payment within 15 days after the date of
129	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 of a business is liable for any
133	unpaid tax, interest, or penalties owed by the transferor
134	arising from the 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
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 of the business to pay the tax taxes, interest, or
156	penalties owed to the state by the transferor taxpayer arising
157	from the operation of the business. The transferee shall pay the
158	withheld consideration to the state within 30 days after the
159	date of the transfer. If the consideration withheld is less than
160	the transferor's liability, the transferor remains liable for
161	the deficiency.
162	(c)  A transferee who acquires the business or stock of
163	goods and fails to pay the taxes, interest, or penalties due may
164	not engage in any business in the state until the taxes,
165	interest, or penalties are paid. The Department of Legal Affairs
166	may seek an injunction at the request of the department to
167	prevent further business activity of a transferee who is liable
168	for unpaid tax of a transferor and who fails to pay or cause to
169	be paid the transferee's maximum liability for such tax due
170	until such maximum liability for the tax is, interest, or
171	penalties are paid. A temporary injunction enjoining further
172	business activity shall may be granted by a circuit court if:
173	without notice.
174	1.  The assessment against the transferee is final and
175	either:
176	a.  The time for filing a contest under s. 72.011 has
177	expired; or
178	b.  Any contest filed pursuant to s. 72.011 resulted in a
179	final and nonappealable judgment sustaining any part of the
180	assessment; and
181	2.  The department has provided at least 20 days' prior
182	written notice to the transferee of its intention to seek an
183	injunction.
184	(5)  The transferee, or transferees acting in concert, of
185	more than 50 percent of a business, assets of the business, or
186	stock of goods of a business who are liable for any tax pursuant
187	to this section shall be are jointly and severally liable with
188	the transferor for the payment of the tax taxes, interest, or
189	penalties owed to the state from the operation of the business
190	by the transferor up to the transferee's or transferees' maximum
191	liability for such tax due.
192	(6)  The maximum liability of a transferee pursuant to this
193	section is equal to the fair market value of the business,
194	assets of the business, or stock of goods of the business
195	property transferred to the transferee or the total purchase
196	price paid by the transferee for the business, assets of the
197	business, or stock of goods of the business, whichever is
198	greater.
199	(a)  The fair market value must be determined net of any
200	liens or liabilities, with the exception of liens or liabilities
201	owed to insiders.
202	(b)  The total purchase price must be determined net of
203	liens and liabilities against the assets, with the exception of:
204	1.  Liens or liabilities owed to insiders.
205	2.  Liens or liabilities assumed by the transferee that are
206	not liens or liabilities owed to insiders.
207	(7)  After notice by the department of transferee liability
208	under this section, the transferee has 60 days within which to
209	file an action as provided in chapter 72.
210	(8)  This section does not impose liability on a transferee
211	of a business, assets of a business, or stock of goods of a
212	business when:
213	(a)  The transfer is pursuant to an involuntary transfer;
214	or
215	(b)  The transferee is not an insider, and the asset
216	transferred consists solely of a one- to four-family residential
217	real property and furnishings and fixtures therein; vacant real
218	property; or owner-occupied commercial real property; and, in
219	each case, is not accompanied by a transfer of other assets of
220	the business.
221	(9)  The department may adopt rules necessary to administer
222	and enforce this section.
223	Section 2.  Subsection (17) of section 213.053, Florida
224	Statutes, as amended by chapter 2010-280, Laws of Florida, is
225	amended to read:
226	213.053  Confidentiality and information sharing.-
227	(17)  The department may provide to the person against whom
228	transferee liability is being asserted pursuant to s. 213.758 s.
229	212.10(1) information relating to the basis of the claim.
230	Section 3.  Section 202.31, Florida Statutes, is repealed.
231	Section 4.  Section 212.10, Florida Statutes, is repealed.
232	Section 5.  This act shall take effect July 1, 2011.

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