Florida Senate - 2017                                    SB 1636
       By Senator Artiles
       40-01413-17                                           20171636__
    1                        A bill to be entitled                      
    2         An act relating to taxation of Internet video service;
    3         amending s. 202.11, F.S.; redefining the term
    4         “communications services” to exclude Internet video
    5         service; defining the term “Internet video service”;
    6         redefining the term “video service” to exclude
    7         Internet video service; amending s. 202.24, F.S.;
    8         prohibiting, except under certain circumstances,
    9         public bodies from levying on or collecting from
   10         sellers or purchasers of Internet video services any
   11         tax, charge, fee, or other imposition on or with
   12         respect to the provision or purchase of Internet video
   13         services; amending ss. 202.26, 212.05, and 610.118,
   14         F.S.; conforming cross-references; providing an
   15         effective date.
   17  Be It Enacted by the Legislature of the State of Florida:
   19         Section 1. Paragraph (i) is added to subsection (1) of
   20  section 202.11, Florida Statutes, present subsections (7)
   21  through (24) of that section are redesignated as subsections (8)
   22  through (25), respectively, a new subsection (7) is added to
   23  that section, and present subsection (24) of that section is
   24  amended, to read:
   25         202.11 Definitions.—As used in this chapter, the term:
   26         (1) “Communications services” means the transmission,
   27  conveyance, or routing of voice, data, audio, video, or any
   28  other information or signals, including video services, to a
   29  point, or between or among points, by or through any electronic,
   30  radio, satellite, cable, optical, microwave, or other medium or
   31  method now in existence or hereafter devised, regardless of the
   32  protocol used for such transmission or conveyance. The term
   33  includes such transmission, conveyance, or routing in which
   34  computer processing applications are used to act on the form,
   35  code, or protocol of the content for purposes of transmission,
   36  conveyance, or routing without regard to whether such service is
   37  referred to as voice-over-Internet-protocol services or is
   38  classified by the Federal Communications Commission as enhanced
   39  or value-added. The term does not include:
   40         (i) Internet video service.
   41         (7) “Internet video service” means a subscription video
   42  programming service received by the end user customer by means
   43  of a wired or wireless Internet connection.
   44         (25)(24) “Video service” means the transmission of video,
   45  audio, or other programming service to a purchaser, and the
   46  purchaser interaction, if any, required for the selection or use
   47  of a programming service, regardless of whether the programming
   48  is transmitted over facilities owned or operated by the video
   49  service provider or over facilities owned or operated by another
   50  dealer of communications services. The term includes point-to
   51  point and point-to-multipoint distribution services through
   52  which programming is transmitted or broadcast by microwave or
   53  other equipment directly to the purchaser’s premises, but does
   54  not include direct-to-home satellite service or Internet video
   55  service. The term includes basic, extended, premium, pay-per
   56  view, digital video, two-way cable, and music services.
   57         Section 2. Paragraph (a) of subsection (2) of section
   58  202.24, Florida Statutes, is amended to read:
   59         202.24 Limitations on local taxes and fees imposed on
   60  dealers of communications services.—
   61         (2)(a) Except as provided in paragraph (c), each public
   62  body is prohibited from:
   63         1. Levying on or collecting from dealers or purchasers of
   64  communications services any tax, charge, fee, or other
   65  imposition on or with respect to the provision or purchase of
   66  communications services.
   67         2. Requiring any dealer of communications services to enter
   68  into or extend the term of a franchise or other agreement that
   69  requires the payment of a tax, charge, fee, or other imposition.
   70         3. Adopting or enforcing any provision of any ordinance or
   71  agreement to the extent that such provision obligates a dealer
   72  of communications services to charge, collect, or pay to the
   73  public body a tax, charge, fee, or other imposition.
   74         4. Levying on or collecting from sellers or purchasers of
   75  Internet video service any tax, charge, fee, or other imposition
   76  on or with respect to the provision or purchase of Internet
   77  video service.
   79  Municipalities and counties may not negotiate those terms and
   80  conditions related to franchise fees or the definition of gross
   81  revenues or other definitions or methodologies related to the
   82  payment or assessment of franchise fees on providers of video
   83  services.
   84         Section 3. Paragraph (j) of subsection (3) of section
   85  202.26, Florida Statutes, is amended to read:
   86         202.26 Department powers.—
   87         (3) To administer the tax imposed by this chapter, the
   88  department may adopt rules relating to:
   89         (j) The types of books and records kept in the regular
   90  course of business which must be available during an audit of a
   91  dealer’s books and records when the dealer has made an
   92  allocation or attribution pursuant to the definition of sales
   93  prices in s. 202.11(14)(b)8. s. 202.11(13)(b)8. and examples of
   94  methods for determining the reasonableness thereof. Books and
   95  records kept in the regular course of business include, but are
   96  not limited to, general ledgers, price lists, cost records,
   97  customer billings, billing system reports, tariffs, and other
   98  regulatory filings and rules of regulatory authorities. Such
   99  records may be required to be made available to the department
  100  in an electronic format when so kept by the dealer. The dealer
  101  may support the allocation of charges with books and records
  102  kept in the regular course of business covering the dealer’s
  103  entire service area, including territories outside this state.
  104  During an audit, the department may reasonably require
  105  production of any additional books and records found necessary
  106  to assist in its determination.
  107         Section 4. Paragraph (e) of subsection (1) of section
  108  212.05, Florida Statutes, is amended to read:
  109         212.05 Sales, storage, use tax.—It is hereby declared to be
  110  the legislative intent that every person is exercising a taxable
  111  privilege who engages in the business of selling tangible
  112  personal property at retail in this state, including the
  113  business of making mail order sales, or who rents or furnishes
  114  any of the things or services taxable under this chapter, or who
  115  stores for use or consumption in this state any item or article
  116  of tangible personal property as defined herein and who leases
  117  or rents such property within the state.
  118         (1) For the exercise of such privilege, a tax is levied on
  119  each taxable transaction or incident, which tax is due and
  120  payable as follows:
  121         (e)1. At the rate of 6 percent on charges for:
  122         a. Prepaid calling arrangements. The tax on charges for
  123  prepaid calling arrangements shall be collected at the time of
  124  sale and remitted by the selling dealer.
  125         (I) “Prepaid calling arrangement” has the same meaning as
  126  provided in s. 202.11.
  127         (II) If the sale or recharge of the prepaid calling
  128  arrangement does not take place at the dealer’s place of
  129  business, it shall be deemed to have taken place at the
  130  customer’s shipping address or, if no item is shipped, at the
  131  customer’s address or the location associated with the
  132  customer’s mobile telephone number.
  133         (III) The sale or recharge of a prepaid calling arrangement
  134  shall be treated as a sale of tangible personal property for
  135  purposes of this chapter, regardless of whether a tangible item
  136  evidencing such arrangement is furnished to the purchaser, and
  137  such sale within this state subjects the selling dealer to the
  138  jurisdiction of this state for purposes of this subsection.
  139         (IV) No additional tax under this chapter or chapter 202 is
  140  due or payable if a purchaser of a prepaid calling arrangement
  141  who has paid tax under this chapter on the sale or recharge of
  142  such arrangement applies one or more units of the prepaid
  143  calling arrangement to obtain communications services as
  144  described in s. 202.11(10)(b)3. s. 202.11(9)(b)3., other
  145  services that are not communications services, or products.
  146         b. The installation of telecommunication and telegraphic
  147  equipment.
  148         c. Electrical power or energy, except that the tax rate for
  149  charges for electrical power or energy is 4.35 percent. Charges
  150  for electrical power and energy do not include taxes imposed
  151  under ss. 166.231 and 203.01(1)(a)3.
  152         2. Section 212.17(3), regarding credit for tax paid on
  153  charges subsequently found to be worthless, is equally
  154  applicable to any tax paid under this section on charges for
  155  prepaid calling arrangements, telecommunication or telegraph
  156  services, or electric power subsequently found to be
  157  uncollectible. As used in this paragraph, the term “charges”
  158  does not include any excise or similar tax levied by the Federal
  159  Government, a political subdivision of this state, or a
  160  municipality upon the purchase, sale, or recharge of prepaid
  161  calling arrangements or upon the purchase or sale of
  162  telecommunication, television system program, or telegraph
  163  service or electric power, which tax is collected by the seller
  164  from the purchaser.
  165         Section 5. Paragraph (a) of subsection (1) of section
  166  610.118, Florida Statutes, is amended to read:
  167         610.118 Impairment; court-ordered operations.—
  168         (1) If an incumbent cable or video service provider is
  169  required to operate under its existing franchise and is legally
  170  prevented by a lawfully issued order of a court of competent
  171  jurisdiction from exercising its right to terminate its existing
  172  franchise pursuant to the terms of s. 610.105, any
  173  certificateholder providing cable service or video service in
  174  whole or in part within the service area that is the subject of
  175  the incumbent cable or video service provider’s franchise shall,
  176  for as long as the court order remains in effect, comply with
  177  the following franchise terms and conditions as applicable to
  178  the incumbent cable or video service provider in the service
  179  area:
  180         (a) The certificateholder shall pay to the municipality or
  181  county:
  182         1. Any prospective lump-sum or recurring per-subscriber
  183  funding obligations to support public, educational, and
  184  governmental access channels or other prospective franchise
  185  required monetary grants related to public, educational, or
  186  governmental access facilities equipment and capital costs.
  187  Prospective lump-sum payments shall be made on an equivalent
  188  per-subscriber basis calculated as follows: the amount of the
  189  prospective funding obligations divided by the number of
  190  subscribers being served by the incumbent cable service provider
  191  at the time of payment, divided by the number of months
  192  remaining in the incumbent cable or video service provider’s
  193  franchise equals the monthly per subscriber amount to be paid by
  194  the certificateholder until the expiration or termination of the
  195  incumbent cable or video service provider’s franchise; and
  196         2. If the incumbent cable or video service provider is
  197  required to make payments for the funding of an institutional
  198  network, the certificateholder shall pay an amount equal to the
  199  incumbent’s funding obligations but not to exceed 1 percent of
  200  the sales price, as defined in s. 202.11 s. 202.11(13), for the
  201  taxable monthly retail sales of cable or video programming
  202  services the certificateholder received from subscribers in the
  203  affected municipality or county. All definitions and exemptions
  204  under chapter 202 apply in the determination of taxable monthly
  205  retail sales of cable or video programming services.
  206         Section 6. This act shall take effect July 1, 2017.