Florida Senate - 2018 SB 1108 By Senator Young 18-01127B-18 20181108__ 1 A bill to be entitled 2 An act relating to the sales tax exemption for 3 political subdivisions; amending s. 212.08, F.S.; 4 conforming a provision to changes made by the act; 5 providing that for sales of tangible personal property 6 that will go into or become a part of public works 7 owned by certain governmental entities, the 8 governmental entity may authorize contractors or 9 subcontractors to utilize the governmental entity’s 10 certificate of entitlement to the exemption for the 11 direct purchase of the tangible personal property; 12 requiring such governmental entities to issue a letter 13 of authorization to the contractor or subcontractor; 14 specifying requirements for such letters; providing 15 construction relating to a certain risk of damage or 16 loss; providing an effective date. 17 18 Be It Enacted by the Legislature of the State of Florida: 19 20 Section 1. Paragraphs (b) and (c) of subsection (6) of 21 section 212.08, Florida Statutes, are amended, and paragraph (a) 22 of that subsection is republished, to read: 23 212.08 Sales, rental, use, consumption, distribution, and 24 storage tax; specified exemptions.—The sale at retail, the 25 rental, the use, the consumption, the distribution, and the 26 storage to be used or consumed in this state of the following 27 are hereby specifically exempt from the tax imposed by this 28 chapter. 29 (6) EXEMPTIONS; POLITICAL SUBDIVISIONS.— 30 (a) There are also exempt from the tax imposed by this 31 chapter sales made to the United States Government, a state, or 32 any county, municipality, or political subdivision of a state 33 when payment is made directly to the dealer by the governmental 34 entity. This exemption shall not inure to any transaction 35 otherwise taxable under this chapter when payment is made by a 36 government employee by any means, including, but not limited to, 37 cash, check, or credit card when that employee is subsequently 38 reimbursed by the governmental entity. This exemption does not 39 include sales, rental, use, consumption, or storage for use in 40 any political subdivision or municipality in this state of 41 machines and equipment and parts and accessories therefor used 42 in the generation, transmission, or distribution of electrical 43 energy by systems owned and operated by a political subdivision 44 in this state for transmission or distribution expansion. 45 Likewise exempt are charges for services rendered by radio and 46 television stations, including line charges, talent fees, or 47 license fees and charges for films, videotapes, and 48 transcriptions used in producing radio or television broadcasts. 49 The exemption provided in this subsection does not include 50 sales, rental, use, consumption, or storage for use in any 51 political subdivision or municipality in this state of machines 52 and equipment and parts and accessories therefor used in 53 providing two-way telecommunications services to the public for 54 hire by the use of a telecommunications facility, as defined in 55 s. 364.02(14), and for which a certificate is required under 56 chapter 364, which facility is owned and operated by any county, 57 municipality, or other political subdivision of the state. Any 58 immunity of any political subdivision of the state or other 59 entity of local government from taxation of the property used to 60 provide telecommunication services that is taxed as a result of 61 this section is hereby waived. However, the exemption provided 62 in this subsection includes transactions taxable under this 63 chapter which are for use by the operator of a public-use 64 airport, as defined in s. 332.004, in providing such 65 telecommunications services for the airport or its tenants, 66 concessionaires, or licensees, or which are for use by a public 67 hospital for the provision of such telecommunications services. 68 (b) Except as provided in this paragraph, the exemption 69 provided under this subsection does not include sales of 70 tangible personal property made to contractors employed directly 71 to or as agents of any such government or political subdivision 72 when such tangible personal property goes into or becomes a part 73 of public works owned by such government or political 74 subdivision. A determination of whether a particular transaction 75 is properly characterized as an exempt sale to a government 76 entity or a taxable sale to a contractor must
shallbe based 77 upon the substance of the transaction rather than the form in 78 which the transaction is cast. However, for sales of tangible 79 personal property that goes gointo or becomes becomea part of 80 public works owned by a governmental entity, other than the 81 Federal Government, a governmental entity claiming the exemption 82 provided under this subsection shall certify to the dealer and 83 the contractor the entity’s claim to the exemption by providing 84 the dealer and the contractor a certificate of entitlement to 85 the exemption for such sales. A governmental entity may 86 authorize the contractor or subcontractor to utilize the 87 governmental entity’s certificate of entitlement for the direct 88 purchase of tangible personal property that will go into or 89 become a part of the public works owned by the governmental 90 entity. A governmental entity electing to use such option must 91 issue a letter of authorization to the contractor or 92 subcontractor specifying the circumstances under which the 93 contractor or subcontractor may utilize the governmental 94 entity’s certificate of entitlement for purchasing. The 95 authorization letter must include all of the following 96 information: 97 1. The project title. 98 2. The name of the contractor or subcontractor authorized 99 to utilize the certificate of entitlement. 100 3. The name of the governmental entity issuing the 101 authorization letter. 102 4. A list of the materials, equipment, furnishings, and 103 fixtures approved for purchase. 104 105 If the department later determines that such sales, in which the 106 governmental entity provided the dealer and the contractor with 107 a certificate of entitlement to the exemption, were not exempt 108 sales to the governmental entity, the governmental entity shall 109 be liable for any tax, penalty, and interest determined to be 110 owed on such transactions. Possession by a dealer or contractor 111 of a certificate of entitlement to the exemption from the 112 governmental entity relieves the dealer from the responsibility 113 of collecting tax on the sale and the contractor for any 114 liability for tax, penalty, or interest related to the sale, and 115 the department shall look solely to the governmental entity for 116 recovery of tax, penalty, and interest if the department 117 determines that the transaction was not an exempt sale to the 118 governmental entity. The governmental entity may not transfer 119 liability for such tax, penalty, and interest to another party 120 by contract or agreement. 121 (c) The department shall adopt rules for determining 122 whether a particular transaction is properly characterized as an 123 exempt sale to a governmental entity or a taxable sale to a 124 contractor, which give special consideration to factors that 125 govern the status of the tangible personal property before being 126 affixed to real property. In developing such rules, assumption 127 of the risk of damage or loss is of paramount consideration in 128 the determination. In instances where the governmental entity 129 has authorized the contractor or subcontractor to utilize the 130 governmental entity’s certificate of exemption for direct 131 purchase of tangible personal property that will go into or 132 become a part of the public works owned by the governmental 133 entity, the risk of damage or loss is dictated by the terms of 134 the contract. The department shall also adopt, by rule, a 135 certificate of entitlement to exemption for use as provided in 136 paragraph (b). The certificate shall require the governmental 137 entity to affirm that it will comply with the requirements of 138 this subsection and the rules adopted under paragraph (b) in 139 order to qualify for the exemption and that it acknowledges its 140 liability for any tax, penalty, or interest later determined by 141 the department to be owed on such transactions. 142 Section 2. This act shall take effect July 1, 2018.