Florida Senate - 2011                                    SB 2044
       
       
       
       By the Committee on Budget Subcommittee on Finance and Tax
       
       
       
       
       593-02614-11                                          20112044__
    1                        A bill to be entitled                      
    2         An act relating to tax administration; repealing ss.
    3         202.31 and 212.10, F.S., relating to liability for
    4         taxes following the sale of a business; amending s.
    5         212.12, F.S.; clarifying provisions imposing certain
    6         penalties for noncompliance with requirements for
    7         reporting taxes; creating s. 212.131, F.S.;
    8         authorizing the Department of Revenue to require that
    9         sellers of alcoholic beverages or tobacco products
   10         file information reports of sales of those products to
   11         retailers in the state; defining terms; requiring that
   12         the report be filed electronically; providing for
   13         certain exceptions; specifying the period for
   14         reporting information; providing a penalty for failure
   15         of a seller to provide the information report when
   16         due; amending s. 212.14, F.S.; authorizing the
   17         department to adopt rules to administer provisions
   18         requiring dealers to provide a cash deposit, bond, or
   19         other security upon the request of the department;
   20         defining the term “person” for purposes of such
   21         requirement; authorizing the Department of Revenue to
   22         adopt emergency rules; amending s. 213.053, F.S.;
   23         authorizing the department to release unemployment tax
   24         rate information to certain additional agents
   25         providing payroll services for employers; conforming a
   26         cross-reference; amending s. 213.758, F.S.; defining
   27         the terms “business,” “financial institution,”
   28         “insider,” “stock of goods,” and “tax” and clarifying
   29         the definition of the term “transfer” for purposes of
   30         provisions establishing tax liability following the
   31         disposition of a business; requiring that a final
   32         return be filed with the department within a specified
   33         time; requiring that an audit be performed within a
   34         specified period under certain circumstances;
   35         prohibiting a transferee who is liable for unpaid tax
   36         from continuing to engage in business; providing for
   37         an exception following the posting of a bond or other
   38         security; authorizing the Department of Legal Affairs
   39         to seek an injunction following prior written notice
   40         to the taxpayer; providing that under certain
   41         circumstances the transferor and transferee are
   42         jointly and severally liable for payment of the tax;
   43         providing procedures for determining the maximum
   44         liability of the transferee of a business; eliminating
   45         provisions authorizing rulemaking by the Department of
   46         Revenue; amending s. 322.142, F.S.; authorizing the
   47         Department of Highway Safety and Motor Vehicles to
   48         release photographs or digital images to the
   49         Department of Revenue in order to identify individuals
   50         for purposes of tax administration; amending s.
   51         443.131, F.S.; providing for a reduction in the
   52         standard rate of unemployment tax for an employer that
   53         produces certain work records to the state agency
   54         providing tax collection services; providing effective
   55         dates.
   56  
   57  Be It Enacted by the Legislature of the State of Florida:
   58  
   59         Section 1. Sections 202.31 and 212.10, Florida Statutes,
   60  are repealed.
   61         Section 2. Effective upon this act becoming a law,
   62  paragraph (d) of subsection (2) of section 212.12, Florida
   63  Statutes, is amended to read:
   64         212.12 Dealer’s credit for collecting tax; penalties for
   65  noncompliance; powers of Department of Revenue in dealing with
   66  delinquents; brackets applicable to taxable transactions;
   67  records required.—
   68         (2)
   69         (d) Any person who makes a false or fraudulent return with
   70  a willful intent to evade payment of any tax or fee imposed
   71  under this chapter; any person who, after the department’s
   72  delivery of a written notice to the person’s last known address
   73  specifically alerting the person of the requirement to register
   74  the person’s business as a dealer, intentionally fails to
   75  register the business; or and any person who, after the
   76  department’s delivery of a written notice to the person’s last
   77  known address specifically alerting the person of the
   78  requirement to collect tax on specific transactions,
   79  intentionally fails to collect such tax, shall, in addition to
   80  the other penalties provided by law, be liable for a specific
   81  penalty of 100 percent of any unreported or any uncollected tax
   82  or fee and, upon conviction, for fine and punishment as provided
   83  in s. 775.082, s. 775.083, or s. 775.084. Delivery of written
   84  notice may be made by certified mail, or by the use of such
   85  other method as is documented as being necessary and reasonable
   86  under the circumstances. The civil and criminal penalties
   87  imposed herein for failure to comply with a written notice
   88  alerting the person of the requirement to register the person’s
   89  business as a dealer or to collect tax on specific transactions
   90  shall not apply if the person timely files a written challenge
   91  to such notice in accordance with procedures established by the
   92  department by rule or the notice fails to clearly advise that
   93  failure to comply with or timely challenge the notice will
   94  result in the imposition of the civil and criminal penalties
   95  imposed herein.
   96         1. If the total amount of unreported or uncollected taxes
   97  or fees is less than $300, the first offense resulting in
   98  conviction is a misdemeanor of the second degree, the second
   99  offense resulting in conviction is a misdemeanor of the first
  100  degree, and the third and all subsequent offenses resulting in
  101  conviction is a misdemeanor of the first degree, and the third
  102  and all subsequent offenses resulting in conviction are felonies
  103  of the third degree.
  104         2. If the total amount of unreported or uncollected taxes
  105  or fees is $300 or more but less than $20,000, the offense is a
  106  felony of the third degree.
  107         3. If the total amount of unreported or uncollected taxes
  108  or fees is $20,000 or more but less than $100,000, the offense
  109  is a felony of the second degree.
  110         4. If the total amount of unreported or uncollected taxes
  111  or fees is $100,000 or more, the offense is a felony of the
  112  first degree.
  113         Section 3. Section 212.131, Florida Statutes, is created to
  114  read:
  115         212.131Information reports required for sales of alcoholic
  116  beverages and tobacco products.
  117         (1)(a) For the purpose of enforcing the collection of the
  118  tax levied by this chapter, the department may require every
  119  seller of alcoholic beverages or tobacco products to file an
  120  information report of any sales of those products to any
  121  retailer in this state.
  122         (b) As used in this section, the term:
  123         1. “Seller” means any manufacturer, wholesaler, or
  124  distributor of alcoholic beverages or tobacco products.
  125         2. “Retailer” means a person required to hold a license
  126  pursuant to chapter 561 or a permit pursuant to chapter 569.
  127         (2)(a) The information report must be filed electronically
  128  through the department’s specified data file format to ensure
  129  that the information is kept confidential. The information
  130  report must contain the seller’s name and the following
  131  information regarding sales to the retailers: the names,
  132  addresses, and resale certificate numbers; the dates the
  133  products were sold; the quantity of each type of product sold;
  134  and the sales price of each type of product sold.
  135         (b) The department may waive the requirement to submit the
  136  information report through an electronic data interchange due to
  137  problems arising from the seller’s computer capabilities, data
  138  system changes, or operating procedures. The request for waiver
  139  must be in writing and the seller must demonstrate that such
  140  circumstances exist. A waiver under this paragraph does not
  141  operate to relieve the seller from the obligation to file an
  142  information report.
  143         (3) The information report must contain the required
  144  information for the period from July 1 through June 30. The
  145  information report is due annually on July 1 for the preceding
  146  reporting period and is delinquent if not received by the
  147  department by September 30.
  148         (4) Any seller who fails to provide the information report
  149  when due is subject to a penalty of $1,000 for every month, or
  150  part thereof, the report is not provided, up to a maximum amount
  151  of $10,000.
  152         Section 4. Subsection (4) of section 212.14, Florida
  153  Statutes, is amended to read:
  154         212.14 Departmental powers; hearings; distress warrants;
  155  bonds; subpoenas and subpoenas duces tecum.—
  156         (4) In all cases where it is necessary to ensure compliance
  157  with the provisions of this chapter, the department shall
  158  require a cash deposit, bond, or other security as a condition
  159  to a person obtaining or retaining a dealer’s certificate of
  160  registration under this chapter. Such bond shall be in the form
  161  and such amount as the department deems appropriate under the
  162  particular circumstances. Every person failing to produce such
  163  cash deposit, bond, or other security as provided for herein
  164  shall not be entitled to obtain or retain a dealer’s certificate
  165  of registration under this chapter, and the Department of Legal
  166  Affairs is hereby authorized to proceed by injunction, when so
  167  requested by the Department of Revenue, to prevent such person
  168  from doing business subject to the provisions of this chapter
  169  until such cash deposit, bond, or other security is posted with
  170  the department, and any temporary injunction for this purpose
  171  may be granted by any judge or chancellor authorized by law to
  172  grant injunctions. Any security required to be deposited may be
  173  sold by the department at public sale if it becomes necessary so
  174  to do in order to recover any tax, interest, or penalty due.
  175  Notice of such sale may be served personally or by mail upon the
  176  person who deposited such security. If by mail, notice sent to
  177  the last known address as the same appears on the records of the
  178  department shall be sufficient for the purpose of this
  179  requirement. Upon such sale, the surplus, if any, above the
  180  amount due under this chapter shall be returned to the person
  181  who deposited the security. The department may adopt rules
  182  necessary to administer this subsection. For the purpose of the
  183  cash deposit, bond, or other security required by this
  184  subsection, the term “person” includes those entities defined in
  185  s. 212.02(12), as well as:
  186         (a) An individual or entity owning a controlling interest
  187  in an entity;
  188         (b) An individual or entity who has acquired an ownership
  189  interest or a controlling interest in a business that would be
  190  otherwise liable for posting a cash deposit, bond, or other
  191  security, unless the department has determined that the
  192  individual or entity is not liable for taxes, interest, or
  193  penalties as set forth in s. 213.758; or
  194         (c) An individual or entity seeking to obtain a dealer’s
  195  certificate of registration for a business that will be operated
  196  at an identical location of a previous business that would
  197  otherwise have been liable for posting a cash deposit, bond, or
  198  other security, if such individual or entity fails to provide
  199  evidence the business was acquired in an arms-length transaction
  200  or for consideration.
  201         Section 5. The Department of Revenue is authorized and all
  202  conditions are deemed met, to adopt emergency rules pursuant to
  203  ss. 120.536(1) and 120.54, Florida Statutes, to administer the
  204  provisions of sections 3 and 4 of this act. The emergency rules
  205  shall remain in effect for 6 months after the rules are adopted
  206  and the rules may be renewed during the pendency of procedures
  207  to adopt permanent rules addressing the subject of the emergency
  208  rules.
  209         Section 6. Subsections (4) and (17) of section 213.053,
  210  Florida Statutes, as amended by chapter 2010-280, Laws of
  211  Florida, are amended to read:
  212         213.053 Confidentiality and information sharing.—
  213         (4) The department, while providing unemployment tax
  214  collection services under contract with the Agency for Workforce
  215  Innovation through an interagency agreement pursuant to s.
  216  443.1316, may release unemployment tax rate information to the
  217  agent of an employer, which agent provides payroll services for
  218  more than 100 500 employers, pursuant to the terms of a
  219  memorandum of understanding. The memorandum of understanding
  220  must state that the agent affirms, subject to the criminal
  221  penalties contained in ss. 443.171 and 443.1715, that the agent
  222  will retain the confidentiality of the information, that the
  223  agent has in effect a power of attorney from the employer which
  224  authorizes permits the agent to obtain unemployment tax rate
  225  information, and that the agent shall provide the department
  226  with a copy of the employer’s power of attorney upon request.
  227         (17) The department may provide to the person against whom
  228  transferee liability is being asserted pursuant to s. 212.10(1)
  229  information relating to the basis of the claim.
  230         Section 7. Section 213.758, Florida Statutes, is amended to
  231  read:
  232         213.758 Transfer of tax liabilities.—
  233         (1) As used in this section, the term:
  234         (a) “Business” means any activity regularly engaged in by
  235  any person, or caused to be engaged in by him or her, with the
  236  object of private or public gain, benefit, or advantage, either
  237  direct or indirect. The term does not include occasional or
  238  isolated sales or transactions involving property or services by
  239  a person who does not hold himself or herself out as engaged in
  240  business. A discrete division or portion of a business is not
  241  considered to be a separate business if it is not a separate
  242  legal entity, but shall be aggregated with all divisions or
  243  portions to constitute a single business.
  244         (b) “Financial institution” means a financial institution
  245  as defined in s. 655.005 and any person that controls, is
  246  controlled by, or is under common control with a financial
  247  institution as defined in s. 655.005.
  248         (c)“Insider” means a person as defined in s. 726.102(7)
  249  and a member, manager, or managing member of a limited liability
  250  company.
  251         (d)(a) “Involuntary transfer” means a transfer of a
  252  business or stock of goods made without the consent of the
  253  transferor, including, but not limited to, a transfer:
  254         1. That occurs due to the foreclosure of a security
  255  interest issued to a person who is not an insider as defined in
  256  s. 726.102;
  257         2. That results from an eminent domain or condemnation
  258  action;
  259         3. Pursuant to chapter 61, chapter 702, or the United
  260  States Bankruptcy Code;
  261         4. To a financial institution, as defined in s. 655.005, if
  262  the transfer is made to satisfy the transferor’s debt to the
  263  financial institution; or
  264         5. To a third party to the extent that the proceeds are
  265  used to satisfy the transferor’s indebtedness to a financial
  266  institution as defined in s. 655.005. If the third party
  267  receives assets worth more than the indebtedness, the transfer
  268  of the excess may not be deemed an involuntary transfer.
  269         (e) “Stock of goods” means the inventory of a business held
  270  for sale to customers in the ordinary course of business.
  271         (f) “Tax” means any tax, interest, penalty, surcharge, or
  272  fee administered by the department pursuant to chapter 443 or
  273  any of the chapters specified in s. 213.05, excluding corporate
  274  income tax.
  275         (g)(b) “Transfer” means every mode, direct or indirect,
  276  with or without consideration, of disposing of or parting with a
  277  business, assets of a business, or stock of goods, and includes,
  278  but is not limited to, assigning, conveying, demising, gifting,
  279  granting, or selling, other than to customers in the ordinary
  280  course of business, to a transferee or to a group of transferees
  281  who are acting in concert. A transfer of more than 50 percent of
  282  all of:
  283         1. The business;
  284         2. The assets of the business; or
  285         3. The stock of goods,
  286  
  287  is a transfer of the business.
  288         (2) A taxpayer in business who is liable for any tax
  289  arising from the operation of that business, interest, penalty,
  290  surcharge, or fee administered by the department pursuant to
  291  chapter 443 or described in s. 72.011(1), excluding corporate
  292  income tax, and who quits the a business without the benefit of
  293  a purchaser, successor, or assignee, or without transferring the
  294  business, assets of the business, or stock of goods to a
  295  transferee, must file a final return for the business and make
  296  full payment of all taxes arising from the operation of the
  297  business within 15 days after quitting the business. A taxpayer
  298  who fails to file a final return and make payment may not engage
  299  in any business in this state until the final return has been
  300  filed and all taxes, interest, or penalties due have been paid.
  301  The Department of Legal Affairs may seek an injunction at the
  302  request of the department to prevent further business activity
  303  of a taxpayer who fails to file a final return and make payment
  304  of the taxes associated with the operation of the business until
  305  such taxes tax, interest, or penalties are paid. A temporary
  306  injunction enjoining further business activity may be granted by
  307  a circuit court having jurisdiction over the taxpayer upon
  308  providing at least 20 days’ prior written notice to the taxpayer
  309  without notice. The written notice must be provided to the
  310  taxpayer before the filing of the lawsuit seeking the
  311  injunction.
  312         (3) A taxpayer who is liable for any tax with respect to a
  313  business and taxes, interest, or penalties levied under chapter
  314  443 or any of the chapters specified in s. 213.05, excluding
  315  corporate income tax, who transfers the taxpayer’s business,
  316  assets of the business, or stock of goods, must file a final
  317  return and make full payment within 15 days after the date of
  318  transfer.
  319         (4)(a) A transferee, or a group of transferees acting in
  320  concert, of more than 50 percent of a business, assets of the
  321  business, or stock of goods is liable for any unpaid tax,
  322  interest, or penalties owed by the transferor arising from the
  323  operation of that business unless:
  324         1.a. There are no common insiders between the transferor
  325  and the transferee at the time of the transfer; and
  326         b. The transferor provides a receipt or certificate of
  327  compliance from the department to the transferee showing that
  328  the transferor has not received a notice of audit and that the
  329  transferor has filed all required tax returns and has paid all
  330  tax arising is not liable for taxes, interest, or penalties from
  331  the operation of the business identified on the returns filed;
  332  or and
  333         2. The department finds that the transferor is not liable
  334  for tax taxes, interest, or penalties after an audit of the
  335  transferor’s books and records. The audit may be requested by
  336  the transferee or the transferor, and, if not done pursuant to
  337  the certified audit program pursuant to s. 213.285, must be
  338  completed by the department within 90 days after the records are
  339  made available to the department. The department shall may
  340  charge a fee for the cost of the audit if it has not issued a
  341  notice of intent to audit by the time the request for the audit
  342  is received.
  343         (b) A transferee may withhold a portion of the
  344  consideration for a business, assets of the business, or stock
  345  of goods to pay the tax taxes, interest, or penalties owed to
  346  the state by the transferor taxpayer arising from the operation
  347  of the business. The transferee shall pay the withheld
  348  consideration to the state within 30 days after the date of the
  349  transfer. If the consideration withheld is less than the
  350  transferor’s liability, the transferor remains liable for the
  351  deficiency.
  352         (c) A transferee who is liable for unpaid tax of a
  353  transferor and who fails to pay the taxes due within 60 days
  354  after written notice from the department may not engage in any
  355  business in the state until the taxes are paid unless an action
  356  is filed pursuant to subsection (7). If an action is timely
  357  filed, the transferee may continue to engage in business until a
  358  final determination is entered against the transferee; however,
  359  the court may, during the pendency of the action, require the
  360  transferee to post a bond or other security if the department
  361  establishes that the department is likely to prevail and the
  362  collection of the unpaid tax would be jeopardized by delay. A
  363  transferee who acquires the business or stock of goods and fails
  364  to pay the taxes, interest, or penalties due may not engage in
  365  any business in the state until the taxes, interest, or
  366  penalties are paid. The Department of Legal Affairs may seek an
  367  injunction at the request of the department to prevent further
  368  business activity of a transferee who is liable for unpaid tax
  369  of a transferor and who fails to pay or cause to be paid the
  370  transferee’s maximum liability for such tax due until such
  371  maximum liability for the tax is, interest, or penalties are
  372  paid. A temporary injunction enjoining further business activity
  373  may be granted by a circuit court having jurisdiction over the
  374  transferee upon providing at least 20 days’ prior written notice
  375  to the taxpayer without notice. The written notice must be
  376  provided to the taxpayer before the filing of the lawsuit
  377  seeking the injunction.
  378         (5) The transferee, or transferees acting in concert, of
  379  more than 50 percent of a business, assets of the business, or
  380  stock of goods who are liable for any tax pursuant to this
  381  section are jointly and severally liable with the transferor for
  382  the payment of the tax taxes, interest, or penalties owed to the
  383  state from the operation of the business by the transferor up to
  384  the transferee’s maximum liability for such tax due.
  385         (6) The maximum liability of a transferee pursuant to this
  386  section is equal to the fair market value of the business,
  387  assets of the business, or stock of goods property transferred
  388  to the transferee, or the total purchase price paid by the
  389  transferee for the business, assets of the business, or stock of
  390  goods, whichever is greater. Fair market value shall be
  391  determined net of any liens or liabilities, excepting any liens
  392  or liabilities owed to insiders. The total purchase price shall
  393  be determined net of liens and liabilities against the assets,
  394  excepting any liens or liabilities owed to insiders, or which
  395  are assumed by the transferee, excepting any liens or
  396  liabilities owed to insiders.
  397         (7) After notice by the department of transferee liability
  398  under this section, the transferee has 60 days within which to
  399  file an action as provided in chapter 72.
  400         (8) This section does not impose liability on a transferee
  401  of a business or stock of goods pursuant to an involuntary
  402  transfer.
  403         (9) The department may adopt rules necessary to administer
  404  and enforce this section.
  405         Section 8. Subsection (4) of section 322.142, Florida
  406  Statutes, is amended to read:
  407         322.142 Color photographic or digital imaged licenses.—
  408         (4) The department may maintain a film negative or print
  409  file. The department shall maintain a record of the digital
  410  image and signature of the licensees, together with other data
  411  required by the department for identification and retrieval.
  412  Reproductions from the file or digital record are exempt from
  413  the provisions of s. 119.07(1) and shall be made and issued only
  414  for departmental administrative purposes; for the issuance of
  415  duplicate licenses; in response to law enforcement agency
  416  requests; to the Department of Business and Professional
  417  Regulation pursuant to an interagency agreement for the purpose
  418  of accessing digital images for reproduction of licenses issued
  419  by the Department of Business and Professional Regulation; to
  420  the Department of State pursuant to an interagency agreement to
  421  facilitate determinations of eligibility of voter registration
  422  applicants and registered voters in accordance with ss. 98.045
  423  and 98.075; to the Department of Revenue pursuant to an
  424  interagency agreement for use in establishing paternity and
  425  establishing, modifying, or enforcing support obligations in
  426  Title IV-D cases; and for use in establishing positive
  427  identification for tax administration purposes; to the
  428  Department of Children and Family Services pursuant to an
  429  interagency agreement to conduct protective investigations under
  430  part III of chapter 39 and chapter 415; to the Department of
  431  Children and Family Services pursuant to an interagency
  432  agreement specifying the number of employees in each of that
  433  department’s regions to be granted access to the records for use
  434  as verification of identity to expedite the determination of
  435  eligibility for public assistance and for use in public
  436  assistance fraud investigations; or to the Department of
  437  Financial Services pursuant to an interagency agreement to
  438  facilitate the location of owners of unclaimed property, the
  439  validation of unclaimed property claims, and the identification
  440  of fraudulent or false claims.
  441         Section 9. Effective upon this act becoming a law,
  442  paragraph (h) of subsection (3) of section 443.131, Florida
  443  Statutes, is amended to read:
  444         443.131 Contributions.—
  445         (3) VARIATION OF CONTRIBUTION RATES BASED ON BENEFIT
  446  EXPERIENCE.—
  447         (h) Additional conditions for variation from the standard
  448  rate.—An employer’s contribution rate may not be reduced below
  449  the standard rate under this section unless:
  450         1. All contributions, reimbursements, interest, and
  451  penalties incurred by the employer for wages paid by him or her
  452  in all previous calendar quarters, except the 4 calendar
  453  quarters immediately preceding the calendar quarter or calendar
  454  year for which the benefit ratio is computed, are paid; and
  455         2. The employer has produced for inspection and copying all
  456  work records in its possession, custody, or control which were
  457  requested by the Agency for Workforce Innovation or the state
  458  agency providing tax collection services pursuant to s.
  459  443.171(5); and
  460         3.2. The employer entitled to a rate reduction must have at
  461  least one annual payroll as defined in subparagraph (b)1. unless
  462  the employer is eligible for additional credit under the Federal
  463  Unemployment Tax Act. If the Federal Unemployment Tax Act is
  464  amended or repealed in a manner affecting credit under the
  465  federal act, this section applies only to the extent that
  466  additional credit is allowed against the payment of the tax
  467  imposed by the Federal Unemployment Tax Act.
  468  
  469  The tax collection service provider shall assign an earned
  470  contribution rate to an employer under subparagraph 1. the
  471  quarter immediately after the quarter in which all
  472  contributions, reimbursements, interest, and penalties are paid
  473  in full and all work records requested pursuant to s. 443.171(5)
  474  have been produced for inspection and copying to the Agency for
  475  Workforce Innovation or the state agency providing tax
  476  collection services.
  477         Section 10. Except as otherwise expressly provided in this
  478  act and except for this section, which shall take effect upon
  479  this act becoming a law, this act shall take effect July 1,
  480  2011.