CS/CS/CS/HB 907

1	A bill to be entitled
2	An act relating to the transfer of tax liability; amending
3	s. 213.758, F.S.; providing definitions; revising
4	provisions relating to tax liability when a person
5	transfers or quits a business; providing that the transfer
6	of the assets of a business or stock of goods of a
7	business under certain circumstances is considered a
8	transfer of the business; requiring the Department of
9	Revenue to provide certain notification to a business
10	before a circuit court shall temporarily enjoin business
11	activity by that business; providing that transferees of
12	the business are liable for certain taxes unless specified
13	conditions are met; requiring the department to conduct
14	certain audits relating to the tax liability of
15	transferors and transferees of a business within a
16	specified time period; requiring certain notification by
17	the Department of Revenue to a transferee before a circuit
18	court shall enjoin business activity in an action brought
19	by the Department of Legal Affairs seeking an injunction;
20	specifying a transferor and transferee of the assets of a
21	business are jointly and severally liable for certain tax
22	payments up to a specified maximum amount; specifying the
23	maximum liability of a transferee; providing methods for
24	calculating the fair market value or total purchase price
25	of specified business transfers to determine maximum tax
26	liability of transferees; excluding certain transferees
27	from tax liability when the transfer consists only of
28	specified assets; amending s. 213.053, F.S.; authorizing
29	the Department of Revenue to provide certain tax
30	information to a transferee against whom tax liability is
31	being asserted pursuant to s. 213.758, F.S.; repealing s.
32	202.31, F.S., relating to the tax liability and criminal
33	liability of dealers of communications services who make
34	certain transfers related to a communications services
35	business; repealing s. 212.10, F.S., relating to a
36	dealer's tax liability and criminal liability for sales
37	tax when certain transfers of a business occur; providing
38	an effective date.
39
40	Be It Enacted by the Legislature of the State of Florida:
41
42	Section 1.  Section 213.758, Florida Statutes, is amended
43	to read:
44	213.758  Transfer of tax liabilities.-
45	(1)  As used in this section, the term:
46	(a)  "Business" means any activity regularly engaged in by
47	any person, or caused to be engaged in by any person, for the
48	purpose of private or public gain, benefit, or advantage. The
49	term does not include occasional or isolated sales or
50	transactions involving property or services by a person who does
51	not hold himself or herself out as engaged in business. A
52	discrete division or portion of a business is not a separate
53	business and must be aggregated with all other divisions or
54	portions that constitute a business if the division or portion
55	is not a separate legal entity.
56	(b)  "Financial institution" means a financial institution
57	as defined in s. 655.005 and any person who controls, is
58	controlled by, or is under common control with a financial
59	institution as defined in s. 655.005.
60	(c)  "Insider" means:
61	1.  Any person included within the meaning of insider as
62	used in s. 726.102(7); or
63	2.  A manager of, a managing member of, or a person who
64	controls a transferor that is a limited liability company, or a
65	relative as defined in s. 726.102(11) of any such persons.
66	(d)(a)  "Involuntary transfer" means a transfer of a
67	business, assets of a business, or stock of goods of a business
68	made without the consent of the transferor, including, but not
69	limited to, a transfer:
70	1.  That occurs due to the foreclosure of a security
71	interest issued to a person who is not an insider as defined in
72	s. 726.102;
73	2.  That results from an eminent domain or condemnation
74	action;
75	3.  Pursuant to chapter 61, chapter 702, or the United
76	States Bankruptcy Code;
77	4.  To a financial institution, as defined in s. 655.005,
78	if the transfer is made to satisfy the transferor's debt to the
79	financial institution; or
80	5.  To a third party to the extent that the proceeds are
81	used to satisfy the transferor's indebtedness to a financial
82	institution as defined in s. 655.005. If the third party
83	receives assets worth more than the indebtedness, the transfer
84	of the excess may not be deemed an involuntary transfer.
85	(e)  "Stock of goods" means the inventory of a business
86	held for sale to customers in the ordinary course of business.
87	(f)  "Tax" means any tax, interest, penalty, surcharge, or
88	fee administered by the department pursuant to chapter 443 or
89	any of the chapters specified in s. 213.05, excluding chapter
90	220, the corporate income tax code.
91	(g)(b)  "Transfer" means every mode, direct or indirect,
92	with or without consideration, of disposing of or parting with a
93	business, assets of the business, or stock of goods of the
94	business, and includes, but is not limited to, assigning,
95	conveying, demising, gifting, granting, or selling, other than
96	to customers in the ordinary course of business, to a transferee
97	or to a group of transferees who are acting in concert. A
98	business is considered transferred when there is a transfer of
99	more than 50 percent of:
100	1.  The business;
101	2.  The assets of the business; or
102	3.  The stock of goods of the business.
103	(2)  A taxpayer engaged in a business who is liable for any
104	tax arising from the operation of that business, interest,
105	penalty, surcharge, or fee administered by the department
106	pursuant to chapter 443 or described in s. 72.011(1), excluding
107	corporate income tax, and who quits the a business without the
108	benefit of a purchaser, successor, or assignee, or without
109	transferring the business, assets of the business, or stock of
110	goods of a business to a transferee, must file a final return
111	for the business and make full payment of all taxes arising from
112	the operation of that business within 15 days after quitting the
113	business. A taxpayer who fails to file a final return and make
114	payment may not engage in any business in this state until the
115	final return has been filed and all taxes, interest, or
116	penalties due have been paid. The Department of Legal Affairs
117	may seek an injunction at the request of the department to
118	prevent further business activity of a taxpayer who fails to
119	file a final return and make payment of the taxes associated
120	with the operation of the business until such taxes tax,
121	interest, or penalties are paid. A temporary injunction
122	enjoining further business activity shall may be granted by a
123	circuit court if the department has provided at least 20 days'
124	prior written notice to the taxpayer without notice.
125	(3)  A taxpayer who is liable for taxes with respect to a
126	business, interest, or penalties levied under chapter 443 or any
127	of the chapters specified in s. 213.05, excluding corporate
128	income tax, who transfers the taxpayer's business, assets of the
129	business, or stock of goods of the business, must file a final
130	return and make full payment within 15 days after the date of
131	transfer.
132	(4)(a)  A transferee, or a group of transferees acting in
133	concert, of more than 50 percent of a business, assets of a
134	business, or stock of goods of a business is liable for any
135	unpaid tax, interest, or penalties owed by the transferor
136	arising from the operation of that business unless:
137	1.a.  The transferor provides a receipt or certificate of
138	compliance from the department to the transferee showing that
139	the transferor has not received a notice of audit and the
140	transferor has filed all required tax returns and has paid all
141	tax arising is not liable for taxes, interest, or penalties from
142	the operation of the business identified on the returns filed;
143	and
144	b.  There were no insiders in common between the transferor
145	and the transferee at the time of the transfer; or
146	2.  The department finds that the transferor is not liable
147	for taxes, interest, or penalties after an audit of the
148	transferor's books and records. The audit may be requested by
149	the transferee or the transferor and, if not done pursuant to
150	the certified audit program under s. 213.285, must be completed
151	by the department within 90 days after the records are made
152	available to the department. The department may charge a fee for
153	the cost of the audit if it has not issued a notice of intent to
154	audit by the time the request for the audit is received.
155	(b)  A transferee may withhold a portion of the
156	consideration for a business, assets of the business, or stock
157	of goods of the business to pay the tax taxes, interest, or
158	penalties owed to the state by the transferor taxpayer arising
159	from the operation of the business. The transferee shall pay the
160	withheld consideration to the state within 30 days after the
161	date of the transfer. If the consideration withheld is less than
162	the transferor's liability, the transferor remains liable for
163	the deficiency.
164	(c)  A transferee who acquires the business or stock of
165	goods and fails to pay the taxes, interest, or penalties due may
166	not engage in any business in the state until the taxes,
167	interest, or penalties are paid. The Department of Legal Affairs
168	may seek an injunction at the request of the department to
169	prevent further business activity of a transferee who is liable
170	for unpaid tax of a transferor and who fails to pay or cause to
171	be paid the transferee's maximum liability for such tax due
172	until such maximum liability for the tax is, interest, or
173	penalties are paid. A temporary injunction enjoining further
174	business activity shall may be granted by a circuit court if:
175	without notice.
176	1.  The assessment against the transferee is final and
177	either:
178	a.  The time for filing a contest under s. 72.011 has
179	expired; or
180	b.  Any contest filed pursuant to s. 72.011 resulted in a
181	final and nonappealable judgment sustaining any part of the
182	assessment; and
183	2.  The department has provided at least 20 days' prior
184	written notice to the transferee of its intention to seek an
185	injunction.
186	(5)  The transferee, or transferees acting in concert, of
187	more than 50 percent of a business, assets of the business, or
188	stock of goods of a business who are liable for any tax pursuant
189	to this section shall be are jointly and severally liable with
190	the transferor for the payment of the tax taxes, interest, or
191	penalties owed to the state from the operation of the business
192	by the transferor up to the transferee's or transferees' maximum
193	liability for such tax due.
194	(6)  The maximum liability of a transferee pursuant to this
195	section is equal to the fair market value of the business,
196	assets of the business, or stock of goods of the business
197	property transferred to the transferee or the total purchase
198	price paid by the transferee for the business, assets of the
199	business, or stock of goods of the business, whichever is
200	greater.
201	(a)  The fair market value must be determined net of any
202	liens or liabilities, with the exception of liens or liabilities
203	owed to insiders.
204	(b)  The total purchase price must be determined net of
205	liens and liabilities against the assets, with the exception of:
206	1.  Liens or liabilities owed to insiders.
207	2.  Liens or liabilities assumed by the transferee that are
208	not liens or liabilities owed to insiders.
209	(7)  After notice by the department of transferee liability
210	under this section, the transferee has 60 days within which to
211	file an action as provided in chapter 72.
212	(8)  This section does not impose liability on a transferee
213	of a business, assets of a business, or stock of goods of a
214	business when:
215	(a)  The transfer is pursuant to an involuntary transfer;
216	or
217	(b)  The transferee is not an insider, and the asset
218	transferred consists solely of a one- to four-family residential
219	real property and furnishings and fixtures therein; real
220	property that has not been improved with any building; or owner-
221	occupied commercial real property; and, in each case, is not
222	accompanied by a transfer of other assets of the business.
223	(9)  The department may adopt rules necessary to administer
224	and enforce this section.
225	Section 2.  Subsection (17) of section 213.053, Florida
226	Statutes, as amended by chapter 2010-280, Laws of Florida, is
227	amended to read:
228	213.053  Confidentiality and information sharing.-
229	(17)  The department may provide to the person against whom
230	transferee liability is being asserted pursuant to s. 213.758 s.
231	212.10(1) information relating to the basis of the claim.
232	Section 3.  Section 202.31, Florida Statutes, is repealed.
233	Section 4.  Section 212.10, Florida Statutes, is repealed.
234	Section 5.  This act shall take effect July 1, 2011.

CODING: Words stricken are deletions; words underlined are additions.