Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. SB 316
       
       
       
       
       
       
                                Barcode 405190                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  02/07/2013           .                                
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       The Committee on Commerce and Tourism (Detert) recommended the
       following:
       
    1         Senate Substitute for Amendment (444784) (with title
    2  amendment)
    3  
    4         Delete line 301
    5  and insert:
    6         Section 3. Effective January 1, 2014, paragraphs (a) and
    7  (b) of subsection (1) of section 202.12, Florida Statutes, are
    8  amended to read:
    9         202.12 Sales of communications services.—The Legislature
   10  finds that every person who engages in the business of selling
   11  communications services at retail in this state is exercising a
   12  taxable privilege. It is the intent of the Legislature that the
   13  tax imposed by chapter 203 be administered as provided in this
   14  chapter.
   15         (1) For the exercise of such privilege, a tax is levied on
   16  each taxable transaction, and the tax is due and payable as
   17  follows:
   18         (a) Except as otherwise provided in this subsection, at a
   19  rate of 5.65 percent 6.65 percent applied to the sales price of
   20  the communications service which:
   21         1. Originates and terminates in this state, or
   22         2. Originates or terminates in this state and is charged to
   23  a service address in this state,
   24  
   25  when sold at retail, computed on each taxable sale for the
   26  purpose of remitting the tax due. The gross receipts tax imposed
   27  by chapter 203 shall be collected on the same taxable
   28  transactions and remitted with the tax imposed by this
   29  paragraph. If no tax is imposed by this paragraph by reason of
   30  s. 202.125(1), the tax imposed by chapter 203 shall nevertheless
   31  be collected and remitted in the manner and at the time
   32  prescribed for tax collections and remittances under this
   33  chapter.
   34         (b) At the rate of 9.8 percent 10.8 percent on the retail
   35  sales price of any direct-to-home satellite service received in
   36  this state. The proceeds of the tax imposed under this paragraph
   37  shall be accounted for and distributed in accordance with s.
   38  202.18(2). The gross receipts tax imposed by chapter 203 shall
   39  be collected on the same taxable transactions and remitted with
   40  the tax imposed by this paragraph.
   41         Section 4. Effective January 1, 2014, section 202.12001,
   42  Florida Statutes, is amended to read:
   43         202.12001 Combined rate for tax collected pursuant to ss.
   44  202.12(1)(a) and 203.01(1)(b).—In complying with ss. 1-3, ch.
   45  2010-149, Laws of Florida, the dealer of communication services
   46  may collect a combined rate of 5.8 percent 6.8 percent comprised
   47  of 5.65 percent 6.65 percent and 0.15 percent required by ss.
   48  202.12(1)(a) and 203.01(1)(b)3., respectively, as long as the
   49  provider properly reflects the tax collected with respect to the
   50  two provisions as required in the return to the Department of
   51  Revenue.
   52         Section 5. Effective January 1, 2014, section 203.001,
   53  Florida Statutes, is amended to read:
   54         203.001 Combined rate for tax collected pursuant to ss.
   55  202.12(1)(a) and 203.01(1)(b).—In complying with ss. 1-3, ch.
   56  2010-149, Laws of Florida, the dealer of communication services
   57  may collect a combined rate of 5.8 percent 6.8 percent comprised
   58  of 5.65 percent 6.65 percent and 0.15 percent required by ss.
   59  202.12(1)(a) and 203.01(1)(b)3., respectively, as long as the
   60  provider properly reflects the tax collected with respect to the
   61  two provisions as required in the return to the Department of
   62  Revenue.
   63         Section 6. Paragraphs (b), (d), and (h) of subsection (5)
   64  of section 212.08, Florida Statutes, are amended to read:
   65         212.08 Sales, rental, use, consumption, distribution, and
   66  storage tax; specified exemptions.—The sale at retail, the
   67  rental, the use, the consumption, the distribution, and the
   68  storage to be used or consumed in this state of the following
   69  are hereby specifically exempt from the tax imposed by this
   70  chapter.
   71         (5) EXEMPTIONS; ACCOUNT OF USE.—
   72         (b) Industrial machinery and equipment used by
   73  manufacturers or used exclusively in spaceport activities to
   74  increase productive output.—
   75         1. Industrial machinery and equipment purchased for
   76  exclusive use in businesses that manufacture, process, compound,
   77  or produce for sale items of tangible personal property at fixed
   78  locations or for exclusive use by a new business in spaceport
   79  activities as defined by s. 212.02 or for use in new businesses
   80  that manufacture, process, compound, or produce for sale items
   81  of tangible personal property at fixed locations are exempt from
   82  the tax imposed by this chapter if, at the time of purchase, the
   83  purchaser furnishes the seller with a signed certificate stating
   84  that the items to be exempted are for exclusive use as provided
   85  in this paragraph. The certificate relieves the seller of the
   86  responsibility of collecting the tax on the sale of such items
   87  and the department shall look solely to the purchaser for
   88  recovery of the tax if it determines that the purchaser was not
   89  entitled to the exemption upon an affirmative showing by the
   90  taxpayer to the satisfaction of the department that such items
   91  are used in a new business in this state. Such purchases must be
   92  made before the date the business first begins its productive
   93  operations, and delivery of the purchased item must be made
   94  within 12 months after that date.
   95         2. Industrial machinery and equipment purchased for
   96  exclusive use by an expanding facility which is engaged in
   97  spaceport activities as defined by s. 212.02 or for use in
   98  expanding manufacturing facilities or plant units which
   99  manufacture, process, compound, or produce for sale items of
  100  tangible personal property at fixed locations in this state are
  101  exempt from any amount of tax imposed by this chapter upon an
  102  affirmative showing by the taxpayer to the satisfaction of the
  103  department that such items are used to increase the productive
  104  output of such expanded facility or business by not less than 5
  105  percent.
  106         3.a. To receive an exemption provided by subparagraph 1. or
  107  subparagraph 2., a qualifying business entity shall apply to the
  108  department for a temporary tax exemption permit. The application
  109  shall state that a new business exemption or expanded business
  110  exemption is being sought. Upon a tentative affirmative
  111  determination by the department pursuant to subparagraph 1. or
  112  subparagraph 2., the department shall issue such permit.
  113         b. The applicant shall maintain all necessary books and
  114  records to support the exemption. Upon completion of purchases
  115  of qualified machinery and equipment pursuant to subparagraph 1.
  116  or subparagraph 2., the temporary tax permit shall be delivered
  117  to the department or returned to the department by certified or
  118  registered mail.
  119         c. If, in a subsequent audit conducted by the department,
  120  it is determined that the machinery and equipment purchased as
  121  exempt under subparagraph 1. or subparagraph 2. did not meet the
  122  criteria mandated by this paragraph or if commencement of
  123  production did not occur, the amount of taxes exempted at the
  124  time of purchase shall immediately be due and payable to the
  125  department by the business entity, together with the appropriate
  126  interest and penalty, computed from the date of purchase, in the
  127  manner prescribed by this chapter.
  128         d. If a qualifying business entity fails to apply for a
  129  temporary exemption permit or if the tentative determination by
  130  the department required to obtain a temporary exemption permit
  131  is negative, a qualifying business entity shall receive the
  132  exemption provided in subparagraph 1. or subparagraph 2. through
  133  a refund of previously paid taxes. No refund may be made for
  134  such taxes unless the criteria mandated by subparagraph 1. or
  135  subparagraph 2. have been met and commencement of production has
  136  occurred.
  137         4. The department shall adopt rules governing applications
  138  for, issuance of, and the form of temporary tax exemption
  139  permits; provisions for recapture of taxes; and the manner and
  140  form of refund applications, and may establish guidelines as to
  141  the requisites for an affirmative showing of increased
  142  productive output, commencement of production, and qualification
  143  for exemption.
  144         2.5. The exemption does exemptions provided in
  145  subparagraphs 1. and 2. do not apply to machinery or equipment
  146  purchased or used by electric utility companies, communications
  147  companies, oil or gas exploration or production operations,
  148  publishing firms that do not export at least 50 percent of their
  149  finished product out of the state, any firm subject to
  150  regulation by the Division of Hotels and Restaurants of the
  151  Department of Business and Professional Regulation, or any firm
  152  that does not manufacture, process, compound, or produce for
  153  sale items of tangible personal property or that does not use
  154  such machinery and equipment in spaceport activities as required
  155  by this paragraph. The exemption does apply exemptions provided
  156  in subparagraphs 1. and 2. shall apply to machinery and
  157  equipment purchased for use in phosphate or other solid minerals
  158  severance, mining, or processing operations.
  159         3.6. For the purposes of the exemption, the term exemptions
  160  provided in subparagraphs 1. and 2., these terms have the
  161  following meanings:
  162         a. “industrial machinery and equipment” means tangible
  163  personal property or other property that has a depreciable life
  164  of 3 years or more and that is used as an integral part in the
  165  manufacturing, processing, compounding, or production of
  166  tangible personal property for sale or is exclusively used in
  167  spaceport activities. A building and its structural components
  168  are not industrial machinery and equipment unless the building
  169  or structural component is so closely related to the industrial
  170  machinery and equipment that it houses or supports that the
  171  building or structural component can be expected to be replaced
  172  when the machinery and equipment are replaced. Heating and air
  173  conditioning systems are not industrial machinery and equipment
  174  unless the sole justification for their installation is to meet
  175  the requirements of the production process, even though the
  176  system may provide incidental comfort to employees or serve, to
  177  an insubstantial degree, nonproduction activities. The term
  178  includes parts and accessories for industrial machinery and
  179  equipment only to the extent that the exemption thereof is
  180  consistent with the provisions of this paragraph.
  181         b. “Productive output” means the number of units actually
  182  produced by a single plant, operation, or product line in a
  183  single continuous 12-month period, irrespective of sales.
  184  Increases in productive output shall be measured by the output
  185  for 12 continuous months selected by the expanding business
  186  after completion of the installation of such machinery or
  187  equipment over the output for the 12 continuous months
  188  immediately preceding such installation. However, in no case may
  189  such time period begin later than 2 years after completion of
  190  the installation of the new machinery and equipment. The units
  191  used to measure productive output shall be physically comparable
  192  between the two periods, irrespective of sales.
  193         (d) Machinery and equipment used under federal procurement
  194  contract.—
  195         1. Industrial machinery and equipment purchased by an
  196  expanding business that which manufactures tangible personal
  197  property pursuant to federal procurement regulations at fixed
  198  locations in this state are exempt from the tax imposed in this
  199  chapter upon an affirmative showing by the taxpayer to the
  200  satisfaction of the department that such items are used to
  201  increase the implicit productive output of the expanded business
  202  by not less than 10 percent. The percentage of increase is
  203  measured as deflated implicit productive output for the calendar
  204  year during which the installation of the machinery or equipment
  205  is completed or during which commencement of production
  206  utilizing such items is begun divided by the implicit productive
  207  output for the preceding calendar year. In no case may The
  208  commencement of production may not begin later than 2 years
  209  after completing following completion of installation of the
  210  machinery or equipment.
  211         2. The amount of the exemption allowed must shall equal the
  212  taxes otherwise imposed by this chapter on qualifying industrial
  213  machinery or equipment reduced by the percentage of gross
  214  receipts from cost-reimbursement type contracts attributable to
  215  the plant or operation to total gross receipts so attributable,
  216  accrued for the year of completion or commencement.
  217         3. The exemption provided by this paragraph shall inure to
  218  the taxpayer only through a refund of previously paid taxes.
  219  Such refund shall be made within 30 days after of formal
  220  approval by the department of the taxpayer’s application, which
  221  application may be made on an annual basis following
  222  installation of the machinery or equipment.
  223         4. For the purposes of this paragraph, the term:
  224         a. “Cost-reimbursement type contracts” has the same meaning
  225  as in 32 C.F.R. s. 3-405.
  226         b. “Deflated implicit productive output” means the product
  227  of implicit productive output times the quotient of the national
  228  defense implicit price deflator for the preceding calendar year
  229  divided by the deflator for the year of completion or
  230  commencement.
  231         c. “Eligible costs” means the total direct and indirect
  232  costs, as defined in 32 C.F.R. ss. 15-202 and 15-203, excluding
  233  general and administrative costs, selling expenses, and profit,
  234  defined by the uniform cost-accounting standards adopted by the
  235  Cost-Accounting Standards Board created pursuant to 50 U.S.C. s.
  236  2168.
  237         d. “Implicit productive output” means the annual eligible
  238  costs attributable to all contracts or subcontracts subject to
  239  federal procurement regulations of the single plant or operation
  240  at which the machinery or equipment is used.
  241         e. “Industrial machinery and equipment” means tangible
  242  personal property or other property that has a depreciable life
  243  of 3 years or more, that qualifies as an eligible cost under
  244  federal procurement regulations, and that is used as an integral
  245  part of the process of production of tangible personal property.
  246  A building and its structural components are not industrial
  247  machinery and equipment unless the building or structural
  248  component is so closely related to the industrial machinery and
  249  equipment that it houses or supports that the building or
  250  structural component can be expected to be replaced when the
  251  machinery and equipment are replaced. Heating and air
  252  conditioning systems are not industrial machinery and equipment
  253  unless the sole justification for their installation is to meet
  254  the requirements of the production process, even though the
  255  system may provide incidental comfort to employees or serve, to
  256  an insubstantial degree, nonproduction activities. The term
  257  includes parts and accessories only to the extent that the
  258  exemption of such parts and accessories is consistent with the
  259  provisions of this paragraph.
  260         f. “National defense implicit price deflator” means the
  261  national defense implicit price deflator for the gross national
  262  product as determined by the Bureau of Economic Analysis of the
  263  United States Department of Commerce.
  264         5. The exclusions provided in subparagraph (b)2. (b)5.
  265  apply to this exemption. This exemption applies only to
  266  machinery or equipment purchased pursuant to production
  267  contracts with the United States Department of Defense and Armed
  268  Forces, the National Aeronautics and Space Administration, and
  269  other federal agencies for which the contracts are classified
  270  for national security reasons. In no event shall The provisions
  271  of this paragraph do not apply to an any expanding business
  272  whose the increase in productive output is measurable of which
  273  could be measured under the provisions of sub-subparagraph
  274  (b)6.b. as physically comparable between the two periods. As
  275  used in this subparagraph, the term “productive output” means
  276  the number of units actually produced by a single plant,
  277  operation, or product line in a single continuous 12-month
  278  period, irrespective of sales. Increases in productive output
  279  shall be measured by dividing the output for 12 continuous
  280  months selected by the expanding business after completing the
  281  installation of machinery or equipment by the output for the 12
  282  continuous months immediately preceding such installation.
  283  However, such time period may not commence 2 years after
  284  completing the installation. The units used to measure
  285  productive output must be physically comparable between the two
  286  periods, irrespective of sales.
  287         (h) Business property used in an enterprise zone.—
  288         1. Business property purchased for use by businesses
  289  located in an enterprise zone which is subsequently used in an
  290  enterprise zone is shall be exempt from the tax imposed by this
  291  chapter. This exemption inures to the business only through a
  292  refund of previously paid taxes. A refund shall be authorized
  293  upon an affirmative showing by the taxpayer, to the satisfaction
  294  of the department, that the requirements of this paragraph have
  295  been met.
  296         2. To receive a refund, the business must file under oath
  297  with the governing body or enterprise zone development agency
  298  having jurisdiction over the enterprise zone where the business
  299  is located, as applicable, an application, under oath, which
  300  includes:
  301         a. The name and address of the business claiming the
  302  refund.
  303         b. The identifying number assigned pursuant to s. 290.0065
  304  to the enterprise zone in which the business is located.
  305         c. A specific description of the property for which a
  306  refund is sought, including its serial number or other permanent
  307  identification number.
  308         d. The location of the property.
  309         e. The sales invoice or other proof of purchase of the
  310  property, showing the amount of sales tax paid, the date of
  311  purchase, and the name and address of the sales tax dealer from
  312  whom the property was purchased.
  313         f. Whether the business is a small business as defined in
  314  by s. 288.703.
  315         g. If applicable, the name and address of each permanent
  316  employee of the business, including, for each employee who is a
  317  resident of an enterprise zone, the identifying number assigned
  318  pursuant to s. 290.0065 to the enterprise zone in which the
  319  employee resides.
  320         3. Within 10 working days after receipt of an application,
  321  the governing body or enterprise zone development agency shall
  322  review the application to determine if it contains all the
  323  information required pursuant to subparagraph 2. and meets the
  324  criteria set out in this paragraph. The governing body or agency
  325  shall certify all applications that contain the information
  326  required pursuant to subparagraph 2. and meet the criteria set
  327  out in this paragraph as eligible to receive a refund. If
  328  applicable, the governing body or agency shall also certify if
  329  20 percent of the employees of the business are residents of an
  330  enterprise zone, excluding temporary and part-time employees.
  331  The certification must shall be in writing, and a copy of the
  332  certification shall be transmitted to the executive director of
  333  the Department of Revenue. The business is shall be responsible
  334  for forwarding a certified application to the department within
  335  the time specified in subparagraph 4.
  336         4. An application for a refund pursuant to this paragraph
  337  must be submitted to the department within 6 months after the
  338  tax is due on the business property that is purchased.
  339         5. The amount refunded on purchases of business property
  340  under this paragraph shall be the lesser of 97 percent of the
  341  sales tax paid on such business property or $5,000, or, if up to
  342  no less than 20 percent of the employees of the business are
  343  residents of an enterprise zone, excluding temporary and part
  344  time employees, the amount refunded on purchases of business
  345  property under this paragraph shall be the lesser of 97 percent
  346  of the sales tax paid on such business property or $10,000. A
  347  refund must approved pursuant to this paragraph shall be made
  348  within 30 days after formal approval by the department of the
  349  application for the refund. A refund may not be granted under
  350  this paragraph unless the amount to be refunded exceeds $100 in
  351  sales tax paid on purchases made within a 60-day time period.
  352         6. The department shall adopt rules governing the manner
  353  and form of refund applications and may establish guidelines as
  354  to the requisites for an affirmative showing of qualification
  355  for exemption under this paragraph.
  356         7. If the department determines that the business property
  357  is used outside an enterprise zone within 3 years after from the
  358  date of purchase, the amount of taxes refunded to the business
  359  purchasing such business property is shall immediately be due
  360  and payable to the department by the business, together with the
  361  appropriate interest and penalty, computed from the date of
  362  purchase, in the manner provided by this chapter.
  363  Notwithstanding this subparagraph, business property used
  364  exclusively in:
  365         a. Licensed commercial fishing vessels,
  366         b. Fishing guide boats, or
  367         c. Ecotourism guide boats
  368  
  369         that leave and return to a fixed location within an area
  370  designated under s. 379.2353, Florida Statutes 2010, are
  371  eligible for the exemption provided under this paragraph if all
  372  requirements of this paragraph are met. Such vessels and boats
  373  must be owned by a business that is eligible to receive the
  374  exemption provided under this paragraph. This exemption does not
  375  apply to the purchase of a vessel or boat.
  376         8. The department shall deduct an amount equal to 10
  377  percent of each refund granted under this paragraph from the
  378  amount transferred into the Local Government Half-cent Sales Tax
  379  Clearing Trust Fund pursuant to s. 212.20 for the county area in
  380  which the business property is located and shall transfer that
  381  amount to the General Revenue Fund.
  382         9. For the purposes of this exemption, the term “business
  383  property” means new or used property defined as “recovery
  384  property” in s. 168(c) of the Internal Revenue Code of 1954, as
  385  amended, except:
  386         a. Property classified as 3-year property under s.
  387  168(c)(2)(A) of the Internal Revenue Code of 1954, as amended;
  388         b. Industrial machinery and equipment as defined in
  389  subparagraph (b)3. sub-subparagraph (b)6.a. and eligible for
  390  exemption under paragraph (b);
  391         c. Building materials as defined in sub-subparagraph
  392  (g)8.a.; and
  393         d. Business property having a sales price of under $5,000
  394  per unit.
  395         10. This paragraph expires on the date specified in s.
  396  290.016 for the expiration of the Florida Enterprise Zone Act.
  397         Section 7. (1) The Department of Revenue shall develop a
  398  tracking system, in consultation with the Revenue Estimating
  399  Conference, to determine the amount of sales taxes remitted by
  400  out–of-state dealers who would otherwise not be required to
  401  collect and remit sales taxes in the absence of the amendments
  402  made to s. 212.0596, Florida Statutes, in section 1 of this act.
  403  By February 1 of each year, the Department of Revenue shall
  404  submit a report to the Governor, the President of the Senate,
  405  and the Speaker of the House of Representatives which sets forth
  406  the amount of sales taxes collected and remitted by such dealers
  407  in the previous calendar year and the methodology used to
  408  determine the amount.
  409         (2) By March 1 of each year, the Revenue Estimating
  410  Conference shall use the information provided by the Department
  411  of Revenue pursuant to subsection (1) to determine the amount of
  412  sales taxes remitted in the previous calendar year by such out
  413  of-state dealers who would otherwise not be required to collect
  414  and remit sales taxes and estimate the amount that may be
  415  expected in the following fiscal year.
  416         (3) The Legislature shall use the information provided by
  417  the Department of Revenue and the Revenue Estimating Conference
  418  to develop legislation designed to return the amount of those
  419  sales taxes collected to the taxpayers of this state. The
  420  Legislature shall reduce taxes in an amount not less than the
  421  amount determined by the Revenue Estimating Conference. Such
  422  reduction shall take into account reductions already provided in
  423  this act in sections 3, 4, 5, and 6 of this act. If the amount
  424  collected is determined to be of a recurring nature and
  425  sufficient to lower tax rates, the Legislature may provide other
  426  permanent tax relief as it deems appropriate.
  427         Section 8. Except as otherwise expressly provided in this
  428  act and except for this section, which shall take effect upon
  429  this act becoming a law, this act shall take effect July 1,
  430  2013.
  431  
  432  ================= T I T L E  A M E N D M E N T ================
  433         And the title is amended as follows:
  434         Delete line 22
  435  and insert:
  436         “dealer”; amending s. 202.12, F.S.; reducing the tax
  437         rate applied to the sale of communications services;
  438         reducing the tax rate applied to retail sales of
  439         direct-to-home satellite services; amending s.
  440         202.12001, F.S.; conforming rates to the reduction of
  441         the communications services tax; amending s. 203.001,
  442         F.S.; conforming rates to the reduction of the
  443         communications services tax; amending s. 212.08, F.S.;
  444         revising the sales tax exemption from the sales tax
  445         for certain business purchases of industrial machinery
  446         and equipment and spaceport activities; deleting
  447         certain limitations on, and procedural requirements
  448         relating to, the exemption; conforming cross
  449         references; requiring that the Department of Revenue
  450         develop a tracking system, in consultation with the
  451         Revenue Estimating Conference, to determine the amount
  452         of sales tax remitted by out-of-state dealers who
  453         would otherwise not be required to collect and remit
  454         sales taxes but for the amendments made by the act;
  455         requiring that the department submit a report to the
  456         Governor and Legislature by a specified date each
  457         year; requiring that the Revenue Estimating Conference
  458         use such report to determine the amount of sales taxes
  459         remitted in the previous calendar year by such out-of
  460         state dealers and estimate the amount that may be
  461         expected in the following fiscal year; requiring that
  462         the Legislature use the information to reduce tax
  463         rates for other taxes as deemed appropriate; providing
  464         an effective date.
  465