Possible Bill of Rights Proposal  
The Florida Bar Tax Section does not involve itself in substantive tax issues but does periodically make proposals regarding matters of tax administration and compliance. It is now considering some changes VMG and others have suggested to the Taxpayer Bill of Rights statutes. The proposals are concerned primarily with sales and Communication Services Tax refunds, but do touch a couple of related matters.

The Florida Constitution mandates a taxpayer bill of rights but the current statutory version, while iterating various rights, makes them dependent upon the enactment of a separate statute. Some listed rights are the subject of such implementing statutes, while others are not, with the result that the Bill of Rights states a number of “rights” on a purely aspirational basis. One change in the proposal being considered by the Tax Section would remove the qualification that a separate implementing statute is needed and instead direct the Department to implement all stated rights through duly-promulgated rules. Another part of the proposal would require the Department, in conducting audits, to look for overpayments as well as underpayments, a provision necessary to make the offset rights in F.S. s. 213.34(4) more meaningful.

On the refund front, a purchaser would be permitted to apply for sales and CST refunds directly from the Department. Current Department rules direct purchasers to seek a refund from the dealer to which they paid the tax, Rule 12A-1.014(4). The dealer does not have the funds in question, of course, because they have been remitted to the Department and the dealer is often caught in a dispute between a taxpayer (frequently one with whom the dealer wishes to maintain good customer relations) and the Department over the taxability of the underlying transactions. The change would allow dealers to make such refunds and recover the same from the Department but would also let the purchaser deal directly with the Department rather than going through the dealer.

The proposals would also eliminate the current statutory provision that starts interest accruing on overpayments 90 days after a “completed” refund application has been filed. Instead, interest would accrue from the date a notice refund application is filed with the proviso that no interest will be paid if the refund is paid within 90 days of that date. The change would put sales and CST tax refunds on the same system now used with Chapter 220 corporate income tax overpayments and eliminate arguments between taxpayers and the Department over the date when a refund application was “complete.” Separate provision is made for interest on refunds deriving from the determination that a taxing provision is unconstitutional. In order to dissuade unnecessary use of the “pay and chase” approach available to the Department in F.S. s. 213.255(7), interest on refunds paid and which the Department later recovers as having been paid in error would be at a rate lower than the adjusted rate used for other deficiency and overpayment purposes

Posted: 2006-09-01 00:00:00.0

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