HB 103

A bill to be entitled
2An act relating to the transfer of tax liability;
3amending s. 213.758, F.S.; providing definitions;
4revising provisions relating to tax liability when a
5person transfers or quits a business; providing that
6the transfer of the assets of a business or stock of
7goods of a business under certain circumstances is
8considered a transfer of the business; requiring the
9Department of Revenue to provide certain notification
10to a business before a circuit court shall temporarily
11enjoin business activity by that business; providing
12that transferees of the business are liable for
13certain taxes unless specified conditions are met;
14requiring the department to conduct certain audits
15relating to the tax liability of transferors and
16transferees of a business within a specified time
17period; requiring certain notification by the
18Department of Revenue to a transferee before a circuit
19court shall enjoin business activity in an action
20brought by the Department of Legal Affairs seeking an
21injunction; specifying a transferor and transferee of
22the assets of a business are jointly and severally
23liable for certain tax payments up to a specified
24maximum amount; specifying the maximum liability of a
25transferee; providing methods for calculating the fair
26market value or total purchase price of specified
27business transfers to determine maximum tax liability
28of transferees; excluding certain transferees from tax
29liability when the transfer consists only of specified
30assets; amending s. 213.053, F.S.; authorizing the
31Department of Revenue to provide certain tax
32information to a transferee against whom tax liability
33is being asserted pursuant to s. 213.758, F.S.;
34repealing s. 202.31, F.S., relating to the tax
35liability and criminal liability of dealers of
36communications services who make certain transfers
37related to a communications services business;
38repealing s. 212.10, F.S., relating to a dealer's tax
39liability and criminal liability for sales tax when
40certain transfers of a business occur; providing an
41effective date.
43Be It Enacted by the Legislature of the State of Florida:
45     Section 1.  Section 213.758, Florida Statutes, is amended
46to read:
47     213.758  Transfer of tax liabilities.-
48     (1)  As used in this section, the term:
49     (a)  "Business" means any activity regularly engaged in by
50any person, or caused to be engaged in by any person, for the
51purpose of private or public gain, benefit, or advantage. The
52term does not include occasional or isolated sales or
53transactions involving property or services by a person who does
54not hold himself or herself out as engaged in business. A
55discrete division or portion of a business is not a separate
56business and must be aggregated with all other divisions or
57portions that constitute a business if the division or portion
58is not a separate legal entity.
59     (b)  "Financial institution" means a financial institution
60as defined in s. 655.005 and any person who controls, is
61controlled by, or is under common control with a financial
62institution as defined in s. 655.005.
63     (c)  "Insider" means:
64     1.  Any person included within the meaning of insider as
65used in s. 726.102(7); or
66     2.  A manager of, a managing member of, or a person who
67controls a transferor that is a limited liability company, or a
68relative as defined in s. 726.102(11) of any such persons.
69     (d)(a)  "Involuntary transfer" means a transfer of a
70business, assets of a business, or stock of goods of a business
71made without the consent of the transferor, including, but not
72limited to, a transfer:
73     1.  That occurs due to the foreclosure of a security
74interest issued to a person who is not an insider as defined in
75s. 726.102;
76     2.  That results from an eminent domain or condemnation
78     3.  Pursuant to chapter 61, chapter 702, or the United
79States Bankruptcy Code;
80     4.  To a financial institution, as defined in s. 655.005,
81if the transfer is made to satisfy the transferor's debt to the
82financial institution; or
83     5.  To a third party to the extent that the proceeds are
84used to satisfy the transferor's indebtedness to a financial
85institution as defined in s. 655.005. If the third party
86receives assets worth more than the indebtedness, the transfer
87of the excess may not be deemed an involuntary transfer.
88     (e)  "Stock of goods" means the inventory of a business
89held for sale to customers in the ordinary course of business.
90     (f)  "Tax" means any tax, interest, penalty, surcharge, or
91fee administered by the department pursuant to chapter 443 or
92any of the chapters specified in s. 213.05, excluding chapter
93220, the corporate income tax code.
94     (g)(b)  "Transfer" means every mode, direct or indirect,
95with or without consideration, of disposing of or parting with a
96business, assets of the business, or stock of goods of the
97business, and includes, but is not limited to, assigning,
98conveying, demising, gifting, granting, or selling, other than
99to customers in the ordinary course of business, to a transferee
100or to a group of transferees who are acting in concert. A
101business is considered transferred when there is a transfer of
102more than 50 percent of:
103     1.  The business;
104     2.  The assets of the business; or
105     3.  The stock of goods of the business.
106     (2)  A taxpayer engaged in a business who is liable for any
107tax arising from the operation of that business, interest,
108penalty, surcharge, or fee administered by the department
109pursuant to chapter 443 or described in s. 72.011(1), excluding
110corporate income tax, and who quits the a business without the
111benefit of a purchaser, successor, or assignee, or without
112transferring the business, assets of the business, or stock of
113goods of a business to a transferee, must file a final return
114for the business and make full payment of all taxes arising from
115the operation of that business within 15 days after quitting the
116business. A taxpayer who fails to file a final return and make
117payment may not engage in any business in this state until the
118final return has been filed and all taxes, interest, or
119penalties due have been paid. The Department of Legal Affairs
120may seek an injunction at the request of the department to
121prevent further business activity of a taxpayer who fails to
122file a final return and make payment of the taxes associated
123with the operation of the business until such taxes tax,
124interest, or penalties are paid. A temporary injunction
125enjoining further business activity shall may be granted by a
126circuit court if the department has provided at least 20 days'
127prior written notice to the taxpayer without notice.
128     (3)  A taxpayer who is liable for taxes with respect to a
129business, interest, or penalties levied under chapter 443 or any
130of the chapters specified in s. 213.05, excluding corporate
131income tax, who transfers the taxpayer's business, assets of the
132business, or stock of goods of the business, must file a final
133return and make full payment within 15 days after the date of
135     (4)(a)  A transferee, or a group of transferees acting in
136concert, of more than 50 percent of a business, assets of a
137business, or stock of goods of a business is liable for any
138unpaid tax, interest, or penalties owed by the transferor
139arising from the operation of that business unless:
140     1.a.  The transferor provides a receipt or certificate of
141compliance from the department to the transferee showing that
142the transferor has not received a notice of audit and the
143transferor has filed all required tax returns and has paid all
144tax arising is not liable for taxes, interest, or penalties from
145the operation of the business identified on the returns filed;
147     b.  There were no insiders in common between the transferor
148and the transferee at the time of the transfer; or
149     2.  The department finds that the transferor is not liable
150for taxes, interest, or penalties after an audit of the
151transferor's books and records. The audit may be requested by
152the transferee or the transferor and, if not done pursuant to
153the certified audit program under s. 213.285, must be completed
154by the department within 90 days after the records are made
155available to the department. The department may charge a fee for
156the cost of the audit if it has not issued a notice of intent to
157audit by the time the request for the audit is received.
158     (b)  A transferee may withhold a portion of the
159consideration for a business, assets of the business, or stock
160of goods of the business to pay the tax taxes, interest, or
161penalties owed to the state by the transferor taxpayer arising
162from the operation of the business. The transferee shall pay the
163withheld consideration to the state within 30 days after the
164date of the transfer. If the consideration withheld is less than
165the transferor's liability, the transferor remains liable for
166the deficiency.
167     (c)  A transferee who acquires the business or stock of
168goods and fails to pay the taxes, interest, or penalties due may
169not engage in any business in the state until the taxes,
170interest, or penalties are paid. The Department of Legal Affairs
171may seek an injunction at the request of the department to
172prevent further business activity of a transferee who is liable
173for unpaid tax of a transferor and who fails to pay or cause to
174be paid the transferee's maximum liability for such tax due
175until such maximum liability for the tax is, interest, or
176penalties are paid. A temporary injunction enjoining further
177business activity shall may be granted by a circuit court if:
178without notice.
179     1.  The assessment against the transferee is final and
181     a.  The time for filing a contest under s. 72.011 has
182expired; or
183     b.  Any contest filed pursuant to s. 72.011 resulted in a
184final and nonappealable judgment sustaining any part of the
185assessment; and
186     2.  The department has provided at least 20 days' prior
187written notice to the transferee of its intention to seek an
189     (5)  The transferee, or transferees acting in concert, of
190more than 50 percent of a business, assets of the business, or
191stock of goods of a business who are liable for any tax pursuant
192to this section shall be are jointly and severally liable with
193the transferor for the payment of the tax taxes, interest, or
194penalties owed to the state from the operation of the business
195by the transferor up to the transferee's or transferees' maximum
196liability for such tax due.
197     (6)  The maximum liability of a transferee pursuant to this
198section is equal to the fair market value of the business,
199assets of the business, or stock of goods of the business
200property transferred to the transferee or the total purchase
201price paid by the transferee for the business, assets of the
202business, or stock of goods of the business, whichever is
204     (a)  The fair market value must be determined net of any
205liens or liabilities, with the exception of liens or liabilities
206owed to insiders.
207     (b)  The total purchase price must be determined net of
208liens and liabilities against the assets, with the exception of:
209     1.  Liens or liabilities owed to insiders.
210     2.  Liens or liabilities assumed by the transferee that are
211not liens or liabilities owed to insiders.
212     (7)  After notice by the department of transferee liability
213under this section, the transferee has 60 days within which to
214file an action as provided in chapter 72.
215     (8)  This section does not impose liability on a transferee
216of a business, assets of a business, or stock of goods of a
217business when:
218     (a)  The transfer is pursuant to an involuntary transfer;
220     (b)  The transferee is not an insider, and the asset
221transferred consists solely of a one- to four-family residential
222real property and furnishings and fixtures therein; real
223property that has not been improved with any building; or owner-
224occupied commercial real property; and, in each case, is not
225accompanied by a transfer of other assets of the business.
226     (9)  The department may adopt rules necessary to administer
227and enforce this section.
228     Section 2.  Subsection (17) of section 213.053, Florida
229Statutes, is amended to read:
230     213.053  Confidentiality and information sharing.-
231     (17)  The department may provide to the person against whom
232transferee liability is being asserted pursuant to s. 213.758
233212.10(1) information relating to the basis of the claim.
234     Section 3.  Section 202.31, Florida Statutes, is repealed.
235     Section 4.  Section 212.10, Florida Statutes, is repealed.
236     Section 5.  This act shall take effect upon becoming a law.

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