Florida Senate - 2011                          SENATOR AMENDMENT
       Bill No. CS/CS/CS/HB 907, 1st Eng.
       
       
       
       
       
       
                                Barcode 302138                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
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                  Floor: WD            .                                
             05/06/2011 03:25 PM       .                                
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       Senator Ring moved the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Before line 42
    4  insert:
    5         Section 1. Subsection (2) of section 212.0596, Florida
    6  Statutes, is amended to read:
    7         212.0596 Taxation of mail order sales.—
    8         (2) Every dealer as defined in s. 212.06(2)(c) who makes a
    9  mail order sale is subject to the power of this state to levy
   10  and collect the tax imposed by this chapter when:
   11         (a) The dealer is a corporation doing business under the
   12  laws of this state or a person domiciled in, a resident of, or a
   13  citizen of, this state;
   14         (b) The dealer maintains retail establishments or offices
   15  in this state, whether the mail order sales thus subject to
   16  taxation by this state result from or are related in any other
   17  way to the activities of such establishments or offices;
   18         (c) The dealer has agents in this state who solicit
   19  business or transact business on behalf of the dealer, whether
   20  the mail order sales thus subject to taxation by this state
   21  result from or are related in any other way to such solicitation
   22  or transaction of business, except that:
   23         1. A printer who mails or delivers for an out-of-state
   24  print purchaser material the printer printed for it shall not be
   25  deemed to be the print purchaser’s agent for purposes of this
   26  paragraph; or
   27         2. A fulfillment center owned, leased, or operated by an
   28  economic investment entity that is owned, maintained, occupied,
   29  operated, or used in this state permanently, temporarily,
   30  directly, or indirectly by the dealer, or through a subsidiary,
   31  affiliate, or agent of the dealer, may not be deemed to be the
   32  dealer’s agent for purposes of this paragraph. This provision
   33  does not apply to any person that is registered to collect the
   34  tax imposed under this chapter as of May 1, 2011;
   35         (d) The property was delivered in this state in fulfillment
   36  of a sales contract that was entered into in this state, in
   37  accordance with applicable conflict of laws rules, when a person
   38  in this state accepted an offer by ordering the property;
   39         (e) The dealer, by purposefully or systematically
   40  exploiting the market provided by this state by any media
   41  assisted, media-facilitated, or media-solicited means,
   42  including, but not limited to, direct mail advertising,
   43  unsolicited distribution of catalogs, computer-assisted
   44  shopping, television, radio, or other electronic media, or
   45  magazine or newspaper advertisements or other media, creates
   46  nexus with this state;
   47         (f) Through compact or reciprocity with another
   48  jurisdiction of the United States, that jurisdiction uses its
   49  taxing power and its jurisdiction over the retailer in support
   50  of this state’s taxing power;
   51         (g) The dealer consents, expressly or by implication, to
   52  the imposition of the tax imposed by this chapter;
   53         (h) The dealer is subject to service of process under s.
   54  48.181;
   55         (i) The dealer’s mail order sales are subject to the power
   56  of this state to tax sales or to require the dealer to collect
   57  use taxes under a statute or statutes of the United States;
   58         (j) The dealer owns real property or tangible personal
   59  property that is physically in this state, except that:
   60         1. A dealer whose only property (including property owned
   61  by an affiliate) in this state is located at the premises of a
   62  printer with which the vendor has contracted for printing, and
   63  is either a final printed product, or property which becomes a
   64  part of the final printed product, or property from which the
   65  printed product is produced, is not deemed to own such property
   66  for purposes of this paragraph; or
   67         2. A dealer whose property, including property owned by a
   68  subsidiary, affiliate, or agent, in this state is located at the
   69  premises of a fulfillment center that is owned, leased, or
   70  operated by an economic investment entity in this state is not
   71  deemed to own such property for purposes of this paragraph. This
   72  provision does not apply to any person that is registered to
   73  collect the tax imposed under this chapter as of May 1, 2011;
   74         (k) The dealer, while not having nexus with this state on
   75  any of the bases described in paragraphs (a)-(j) or paragraph
   76  (l), is a corporation that is a member of an affiliated group of
   77  corporations, as defined in s. 1504(a) of the Internal Revenue
   78  Code, whose members are includable under s. 1504(b) of the
   79  Internal Revenue Code and whose members are eligible to file a
   80  consolidated tax return for federal corporate income tax
   81  purposes and any parent or subsidiary corporation in the
   82  affiliated group has nexus with this state on one or more of the
   83  bases described in paragraphs (a)-(j) or paragraph (l); or
   84         (l) The dealer or the dealer’s activities have sufficient
   85  connection with or relationship to this state or its residents
   86  of some type other than those described in paragraphs (a)-(k) to
   87  create nexus empowering this state to tax its mail order sales
   88  or to require the dealer to collect sales tax or accrue use tax.
   89         Section 2. Paragraphs (m), (n), and (o) are added to
   90  subsection (2) of section 212.06, Florida Statutes, to read:
   91         212.06 Sales, storage, use tax; collectible from dealers;
   92  “dealer” defined; dealers to collect from purchasers;
   93  legislative intent as to scope of tax.—
   94         (2)
   95         (m) Except as provided in paragraph (n), a remote dealer
   96  shall be considered a “dealer” for purposes of subsection (3).
   97         (n) Notwithstanding paragraph (m) or any other law, a
   98  remote dealer that qualifies as an economic investment entity
   99  under s. 212.099 may not be considered a to be “dealer” under
  100  this chapter. However, the economic investment entity shall be
  101  considered a dealer for purposes of obtaining a purchaser resale
  102  certificate.
  103         (o)1. Notwithstanding paragraph (m) or any other law, a
  104  person shall not be considered to be a “dealer” under this
  105  chapter, except for purposes of obtaining a purchaser resale
  106  certificate, due to that person’s:
  107         a. Maintenance, occupation, operation, or use in this state
  108  permanently, temporarily, directly, or indirectly, or through a
  109  subsidiary, affiliate, or agent by whatever name, of a
  110  fulfillment center that is owned, leased, or operated by an
  111  economic investment entity;
  112         b. Ownership of tangible personal property located at the
  113  premises of a fulfillment center owned, leased, or operated by
  114  an economic investment entity; or
  115         c. Maintenance, occupation, operation, or use in this state
  116  permanently, temporarily, directly, or indirectly, or through a
  117  subsidiary, affiliate, agent by whatever name, or otherwise of a
  118  computer server.
  119         2.This paragraph does not apply to any person that is
  120  registered to collect the tax imposed under this chapter as of
  121  May 1, 2011.
  122         Section 3. Subsection (10) is added to section 212.07,
  123  Florida Statutes, to read:
  124         212.07 Sales, storage, use tax; tax added to purchase
  125  price; dealer not to absorb; liability of purchasers who cannot
  126  prove payment of the tax; penalties; general exemptions.—
  127         (10)Notwithstanding any other law:
  128         (a)A sale for resale of tangible personal property,
  129  regardless of whether the sale for resale is otherwise tax
  130  exempt under this chapter, to an economic investment entity, as
  131  defined by s. 212.099; and
  132         (b) Such property is delivered to the economic investment
  133  entity or its customer in this state,
  134  
  135  is not subject to any tax that would otherwise be imposed on
  136  such transactions under this chapter.
  137         Section 4. Section 212.099, Florida Statutes, is created to
  138  read:
  139         (1) DEFINITIONS.—As used in this section and in ss.
  140  212.0596(2)(c) and (j), 212.06(2)(m), (n), and (o), 212.07(10),
  141  and 212.18, the term:
  142         (a) “Affiliate” means a person that directly or indirectly,
  143  through one or more intermediaries, controls, is controlled by,
  144  or is under common control with another person. For purposes of
  145  this paragraph, a person controls another person if that person
  146  directly or indirectly holds an ownership interest of more than
  147  50 percent in the other person.
  148         (b) “Fulfillment center” means an establishment in this
  149  state where tangible personal property and gift cards are stored
  150  or processed for delivery to customers via common carrier. The
  151  term does not include an establishment that is open to the
  152  general public for the in-person receipt of tangible personal
  153  property sold at retail, excluding sales for resale, regardless
  154  of whether the sale for resale is tax exempt under this chapter.
  155         (c) “Remote dealer” means any person whose physical
  156  presence in this state is attributable to the maintenance,
  157  occupation, operation, or use of a distributing house, or house,
  158  warehouse or other place of business by such person directly,
  159  indirectly, or by such person’s subsidiary, affiliate, or agent,
  160  unless the in-state place of business is a physical location
  161  that is open to the general public for the sale of goods at
  162  retail or for the in-person receipt of goods sold at retail and
  163  at least one of the following activities is performed at the
  164  place of business:
  165         1. Retail sales of goods by such person or on such person’s
  166  behalf, excluding sales for resale, regardless of whether the
  167  sale for resale is tax exempt under this chapter;
  168         2. Promotion of such person’s business, such as
  169  distributing such person’s coupons or compiling such person’s
  170  mailing list, but excluding the distribution of such person’s
  171  merchandise, advertising materials, including flyers and other
  172  promotional materials and the availability of such person’s
  173  catalogs at such place of business to use for reference purposes
  174  or to be provided to a retail customer at the customer’s
  175  request;
  176         3. Acceptance of in-person returns or exchanges of, or
  177  credits for, merchandise purchased from or through such person;
  178         4. Maintenance of telephone or Internet kiosks that allow
  179  retail customers to access inventories and purchase merchandise
  180  from or through such person; or
  181         5. Acceptance or placement of customers’ orders with such
  182  person when a product is unavailable at such place of business.
  183         (d) “Economic investment entity” means a remote dealer, as
  184  defined in paragraph (c), which may, in combination with any
  185  affiliates of the remote dealer, also be remote dealers:
  186         1. Within 3 years after July 1, 2011, achieves a net
  187  increase in employees in this state of 1,500, measured pursuant
  188  to subsection (3);
  189         2. For 4 years subsequent to achieving the net increase
  190  described under subparagraph 1., maintains an increase of at
  191  least 1,500 employees in this state in each year, measured
  192  pursuant to subsection (3);
  193         3. Within 3 years after July 1, 2011, invests more than
  194  $100 million in qualified expenditures in this state; and
  195         4. Owns or operates one or more fulfillment centers in this
  196  state.
  197         (e) “Qualified expenditure” means any capital expenditure
  198  other than inventory or compensation paid to employees.
  199         (2) SPECIAL CONSIDERATIONS.—For purposes of this section
  200  only:
  201         (a) All persons who are employed at a facility regardless
  202  of whether such persons are employed by the remote dealer shall
  203  be treated as employed by the remote dealer.
  204         (b) All qualified expenditures that are incurred by those
  205  entities and persons that are affiliates of a remote dealer, or
  206  by any other person with respect to a facility to be used
  207  primarily by the remote dealer or an affiliate of the remote
  208  dealer, shall be treated as incurred by the remote dealer.
  209         (3) MEASUREMENT OF EMPLOYEE THRESHOLDS.—
  210         (a) For purposes of subparagraph (1)(d)1. the net increase
  211  in employees shall be measured by subtracting the number of
  212  employees, determined on a full-time equivalent basis, employed
  213  by the remote dealer as of July 1, 2011, from the average number
  214  of employees, determined on a full-time equivalent basis,
  215  employed by the remote dealer from July 1, 2013, to June 30,
  216  2014.
  217         (b) For purposes of subparagraph (1)(d)2., the number of
  218  employees, determined on a full-time equivalent basis, employed
  219  by the remote dealer for each year shall be the average number
  220  of employees, determined on a full-time equivalent basis,
  221  employed by the remote dealer from July 1 of the previous
  222  calendar year to June 30 of the current calendar year.
  223         (4) QUALIFICATION AS AN ECONOMIC INVESTMENT ENTITY.—
  224         (a) To qualify as an economic investment entity, a remote
  225  dealer must file a statement with the department indicating that
  226  the remote dealer will meet the definition of economic
  227  investment entity under paragraph (1)(d). The statement must
  228  include, but need not be limited to:
  229         1. The federal employer identification number of the remote
  230  dealer and its applicable affiliates, including existing or
  231  acquired affiliates, which in combination with the remote
  232  dealer, are taken into account for qualification of an economic
  233  investment entity.
  234         2. The anticipated net increase in employees, determined on
  235  a full-time equivalent basis, in this state as of June 30, 2014,
  236  calculated pursuant to paragraph (3)(a).
  237         3. The anticipated number of employees, determined on a
  238  full-time equivalent basis, employed by the remote dealer for
  239  each of the 4 years subsequent to the year in which the remote
  240  dealer achieves the net increase described in subparagraph
  241  (1)(d)1., calculated pursuant to paragraph (3)(b).
  242         4. The anticipated amount of qualified expenditures that
  243  will be invested by the remote dealer in this state as of June
  244  30, 2014.
  245         (b) A remote dealer shall be considered an economic
  246  investment entity as of January 1 of the year in which the
  247  statement is filed.
  248         (c) Any remote dealer who is an affiliate of a remote
  249  dealer that qualifies as an economic investment entity under
  250  this section shall also be considered an economic investment
  251  entity and is not required to file a separate statement with the
  252  department.
  253         (5) PENALTIES.—Notwithstanding the provisions of s.
  254  95.091(3), a remote dealer who is considered an economic
  255  investment entity in a particular year but who is subsequently
  256  shown to have failed to meet the requirements of paragraph
  257  (1)(d) for the required periods set forth in paragraph (1)(d) is
  258  liable for any tax that the remote dealer would have been
  259  required to remit to the department with respect to such non
  260  qualifying year had that remote dealer not qualified as an
  261  economic investment entity for such year.
  262         (6) EFFECT OF QUALIFYING STATEMENT.—Notwithstanding any
  263  other provision of law, the filing of a statement to qualify as
  264  an economic investment entity under subsection (4) shall not
  265  serve as the basis for subjecting an economic investment entity
  266  to liability for tax imposed under this chapter except for
  267  taxable expenditures consumed at the fulfillment center.
  268         (7) RULEMAKING.—The department may adopt forms and rules to
  269  administer this section.
  270         Section 5. Present subsection (4) of section 212.18,
  271  Florida Statutes, is renumbered as subsection (5), and a new
  272  subsection (4) is added to that section, to read:
  273         212.18 Administration of law; registration of dealers;
  274  rules.—
  275         (4) An economic investment entity that ships items to
  276  customers located in this state shall not be required to file
  277  any report, statement, or other information with any government
  278  agency or official in this state related to sales and use tax
  279  notification with respect to purchases made from such economic
  280  investment entity. The economic investment entity shall not be
  281  required to send to customers in this state sales and use tax
  282  notifications with respect to their purchases.
  283  
  284  ================= T I T L E  A M E N D M E N T ================
  285         And the title is amended as follows:
  286         Delete line 2
  287  and insert:
  288         An act relating to taxation; amending s. 212.0596,
  289         F.S.; creating an exception to acts that may otherwise
  290         subject a fulfillment center to requirements to
  291         collect and remit sales and use taxes to this state;
  292         amending s. 212.06, F.S.; providing that an economic
  293         investment entity is not considered to be a dealer;
  294         providing that specified conduct relating to a
  295         fulfillment center does not result in a person being
  296         considered as a dealer; amending s. 212.07, F.S.;
  297         providing that certain transactions by an economic
  298         investment entity are exempt from sales and use taxes;
  299         creating s. 212.099, F.S.; providing definitions;
  300         requiring an a remote dealer that seeks to qualify as
  301         an economic investment entity to have a specified
  302         number of employees and make a specified investment in
  303         this state; imposing additional tax liability for
  304         failing to employ the required number of employees or
  305         make the required minimum investment; authorizing the
  306         Department of Revenue to adopt rules; amending s.
  307         212.18, F.S.; providing that an economic investment
  308         entity is not required to file reports, statements, or
  309         information relating to sales and use taxes under
  310         certain circumstances; providing that an economic
  311         investment entity is not required to send customers
  312         sales and use tax notifications; amending