Major Florida tax legislation passed in 2000  
A summary of major tax legislation enacted during the 2000 regular session of the Florida Legislature, which adjourned May 5, 2000,is provided below. Except as noted, all of these measures have been signed by the Governor or allowed to become law without his signature. Rulemaking proceedings to implement many of these provisions are expected in the near future.

- HB 67 & 87. Intangibles Tax. Effective January 1, 2001, the tax rate on intangible property is lowered from 1.5 mills to 1 mill, and 100 percent of business receivables are exempt from tax. The bill also amends the situs rules for trusts. Chapter 2000-173, Laws of Florida.

- HB 161. Tax free clothing week.. From July 29, through August 6, 2000, no sales or use tax will be collected on sales of clothing, wallets, or bags with a selling price of $100 or less. The exemption includes wearing apparel, shoes, handbags, backpacks, fanny packs and diaper bags. Chapter 2000-175, Laws of Florida.

- HB 349. Sales tax-concession leases-ticket surcharges. This bill exempts from tax under Section 212.031 certain rental/license payments made by concessionaires selling souvenirs, novelties and other event-related products during events at civic center, convention hall and other enumerated venues. Only percentage rent/license payments are exempt. The tax for 7-day or shorter events need not be remitted until the following month. The bill also exempts from Section 212.031 tax separately stated charges by such venues on lessees/licensees for food, drink or services, including stagehands, security personnel, cleaning staff, advertising, etc. [Some of these charges, e.g. for security and cleaning services, may be taxable under other Chapter 212 statutes.] Certain separately stated surcharges, taxes and fees, including ticket service charges imposed by a facility ticket office or a ticketing service, are excluded from the Section 212.04 admissions tax. Further, certain events in such venues are exempt from admissions tax if sponsored by governmental entities or nonprofit sports authorities or sports commissions. The enumerated venues are also authorized to delay remittance of admission taxes until the month following the event. Retroactive relief is granted with respect to the newly-enacted exemptions if tax was not previously paid or collected. Chapter 2000-345, Laws of Florida.

- HB 389. Mineral severance tax. Revises the distribution of revenues from the tax on severance of phosphate rock. Also repeals section 211.3103(9), Florida Statutes (which requires a reduction in the amount of proceeds from the severance tax returned to a county equal to the value of any donation of real or other property from a mineral producer). The bill also increases the amount of funds credited to the Minerals Trust Fund from severance taxes remaining in the fund at the end of the fiscal year and revises the purposes for which money from the Nonmandatory Land Reclamation Trust Fund may be used. Chapter 2000-389, Laws of Florida.

- HB 411. Sales tax exemption for road materials. The exemption for asphalt incorporated into public works products is increased from 20 percent to 40 percent of the taxable base. Materials used in construction of rail roadways also are exempted. Both changes take effect July 1, 2000. Chapter 2000-310, Laws of Florida.

- HB 509. Tourist development tax and general tax administration. This bill as originally filed pertained only to the local-option tourist development tax, authorizing local governments to extend the tax beyond the retirement of the bonds financed by the tax. The bill was amended numerous times during the legislative process, and, as passed, duplicates several of the tax administration provisions in the Department’s tax package (HB 2433) and contains other technical tax administration provisions. Chapter 2000-312, Laws of Florida.

- HB 775. Rent tax exemption for space flight businesses. An exemption from the Section 212.031 tax on real property rentals and licenses is created by this bill. The exemption is for property used or occupied predominantly for space flight business purposes. The term “space flight business” means “manufacturing, processing or assembly of a space facility, space propulsion system, space vehicle, satellite, or station of any kind possessing the capacity for space flight, as defined by s. 212.02(23), or components thereof, and also means the following activities supporting space flight: vehicle launch activities, flight operations, ground control or ground support and all administrative activities directly related thereto.” In order to qualify for the exemption, more than 50 percent of the property or improvements must be used for one or more space flight business purposes. Provision is made for the furnishing of a certificate to the landlord by the tenant or licensee claiming the exemption. Chapter 2000-183, Laws of Florida.

- HB 879. Sales/use tax on printed materials. The bill makes the purchaser of printed materials solely responsible for Chapter 212 taxes if the materials are delivered by the printer to the U.S. Postal Service for mailing to persons in and outside Florida. The printer is relieved of any tax collection responsibility unless all or substantially all of the printed materials will be mailed to persons in Florida. A rebuttable presumption is created that all materials printed at a facility are mailed to persons in the state where the facility is located. The presumption may be rebutted by a blanket or transaction-specific certificate from the purchaser. Chapter 2000-275, Laws of Florida.

- HB 743. Entertainment industry incentives. Provides a single application process for the sales tax exemptions available to companies engaged in the production of motion pictures, television series, commercial advertising, music videos, or sound recordings in Florida. Chapter 2000-182, Laws of Florida.

- HB 1535. State Tax Reform Task Force. A sixteen member task force is created to evaluate whether the state’s tax structure is adequate to support the state’s continuing needs. The task force must evaluate the effectiveness of the current tax structure, its efficiency, and whether it is equitable and must analyze alternative tax sources. The task force must submit an interim report by February 1, 2001 and a final report by February 1, 2002. Chapter 2000-222, Laws of Florida.

- HB 1933. Miscellaneous sales and use tax exemptions. This bill creates exemptions from sales and use taxes for sales or leases to: (1) s. 501(c)(4) corporations whose primary function is to construct, maintain, or operate a water system in Florida; (2) s. 501(c)(3) corporations providing crime prevention services, drunk driving prevention services, or juvenile delinquency prevention services that benefit society; and (3) s. 501(c)(3) corporations designated as state theater contract organizations as provided under Florida Statutes. The bill also exempts sales or leases to the Florida Fire Emergency Services Foundation. Chapter 2000-223, Laws of Florida. See also SB 388.

- HB 2433. Department of Revenue tax package. The Department’s annual tax bill makes numerous technical changes, with respect to both substantive tax law and tax administration. Highlights:

• Effective July 1, 2002, the statute of limitations on all assessments is three years. Last year’s legislation shortened the statute from five years to three years, but only for taxes payable after July 1, 1999. • The sales tax exemption for pollution control machinery and equipment is extended to water treatment chemicals and microorganisms used for bio-treatment. • The word “statistically” is deleted from the statute authorizing the Department to statistically sample tax records for audits. This may validate the Department’s common use of block sampling. The same provision authorizes the Department to refund overpayments based on audit samples.

• The Department is authorized to compromise tax or interest based on the taxpayer’s reliance on certain prior positions of the Department, such as non-assessment of the same item during a prior audit when the same issue was raised. [This provision is duplicated in HB 509.]See also the article about this feature posted on this site.

• The Department may enter into contracts with third-party tax compliance vendors using automated systems to collect and remit sales tax for sellers. Dealers who use such systems are relieved from filing returns and from audit exposure.

Chapter 2000-355, Laws of Florida.

- SB 114. Small county sales surtax. Revises section 212.055(3)(a), Florida Statutes, to provide that counties with a population of 75,000 or less on October 1, 2000 may levy a discretionary sales surtax of 0.5 percent or 1 percent. VETOED.

- SB 290. Property tax VAB and filing fees; educational purpose exemption. Requires the property appraiser to consider a value assigned to tangible personal property in the prior year by the Value Adjustment Board and to justify with new information any increase over that amount. Repeals provision that allows successful VAB petitioner to recover the filing fee. Allows an educational purpose exemption for property which is governmentally owned and subleased back to the owner who used it for such purposes. Chapter 2000-262, Laws of Florida.

- SB 388. Exemptions for s. 501(c)(3) organizations. Exempts sales and leases to all such organizations when such sales and leases are used in customary nonprofit activities. Repeals provisions of the property tax exemption statutes which reference a sales tax consumer certificate of exemption. Chapter 2000-228, Laws of Florida. See also HB 1933.

- SB 770. Alcoholic beverage surcharge. This bill reduces by one-half the alcoholic beverage surcharge on beverages sold for consumption on premises and exempts from the surcharge the sale of alcoholic beverages by certain nonprofit organizations. The bill makes numerous other changes affecting pari-mutuel wagering. Chapter 2000-354, Laws of Florida.

- SB 932. Repeal of additional annual sales tax registration fee. This bill repeals the additional annual registration fee on dealers with taxable sales or purchases of $30,000 or more. The bill also repeals requirement that those fees be deposited in the Solid Waste Management Trust Fund. Chapter 2000-206, Laws of Florida.

- SB 1334. Electronic commerce; sales tax exemption for network access point (NAP) equipment. Lengthy bill, with one sales tax provision exempting equipment purchased by a communications service provider for direct participation in a network access point (NAP). “NAP” is defined as a “carrier-neutral, public-private Internet traffic exchange point.” Exemption is available only by refund. Exemption sunsets in 2005. Non-tax provisions of the bill relate to electronic signatures and electronic records, online voting, privacy, state procurement of information technology, excavations under the “one call” statute, and the Public Service Commission Nominating Council. Chapter 2000-164, Laws of Florida.

- SB 1338. Telecommunications tax reform. Major overhaul of telecommunications tax structure. Defines new “communications services” tax base to include cable and satellite services. Replaces sales tax, local municipal utility tax (MUT), local franchise fees, local option sales tax and consolidates reporting of new state and local communications services taxes and gross receipts tax. Eliminates disparities in charges and services subject to state and local taxes. Excludes from communications services taxes sales for resale, information services, Internet access and related on-line services, prepaid calling arrangements, air-ground services. Limits annual state and local tax liabilities for call centers. Centralizes administration of state and local taxes with the Department of Revenue. Limits power of local jurisdictions to interfere with providers’ use of rights-of-way or to charge fees therefor. Provides alternate methods for assignment of customers to local jurisdictions without audit exposure. Provides mechanism for customer refunds patterned after 1999 MUT amendment. New tax regime is effective October 1, 2001. However, some provisions have earlier effective dates, e.g., reduction in sales tax rate on prepaid calling arrangements from seven percent to six percent. Chapter 2000-260, Laws of Florida.

- SB 1604. Sales tax-machinery & equipment-semiconductor manufacturing-defense and space technology. Among other provisions, this bill changes the current M&E exemption pertaining to silicon technology production. It makes the exemption applicable to M&E used in certified semiconductor facilities to manufacture semiconductor technology products. The term “industrial machinery and equipment” is defined for this purpose to include molds, dies, machine tooling, other accessories, testing equipment, test beds, computers and software, among other items, whether purchased or self-fabricated. A similar exemption is available for certified semiconductor R&D facilities. The bill also grants a 25% exemption to M&E used in certified defense or space technology facilities to manufacture defense or space technology products or used in a certified defense or space technology R&D facility. Building materials purchased for use in semiconductor-manufacturing clean rooms are also exempted. Facilities are certified by the Office of Tourism, Trade and Economic Development upon the recommendation of Enterprise Florida, Inc. Definitions of “defense technology products” and “space technology products” are included. The bill also extends for three years the sales tax exemption applicable to solar energy systems. Chapter 2000-351, Laws of Florida.

Posted: 2000-08-09 00:00:00.0

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