DOR 2001 Legislative Concepts  
The Department has released its proposals for the 2001 legislative session in concept form and is in the process of finalizing the concepts for presentation to the Governor and Cabinet on November 29, 2000. After approval by that collegial agency head, actual bill language will be prepared. Some of the concepts that pertain to taxes include:

1. Allowing refunds for a 501(c)(3) organization back to the effective date of its IRS determination letter (but in no event for periods prior to January 1, 2001). Current law would make the Florida exemption certificate effective only from the date it is issued by the Department.

2. Close an alleged loophole by which foreign LLCs are being used to purchase vehicles for Florida residents, registering them in a state with no sales tax and thus avoiding Florida tax. The proposal would en requirements for the removal of the vehicle from Florida and address the residency effect of Florida corporate officers and stockholders.

3. Change the filing point for affidavits claiming the exemption for M&E used in producing electricity and steam energy under F.S. s. 212.08(5)(c). Such affidavits would be filed with the supplier rather than the Department.

4. Obsolete references in Section 212.08(5) (various M&E exemptions) to "Section 38 property" would be replaced with a definition of qualifying property that is consistent with the definition of that now-defunct Internal Revenue Code term.

5. The reference in F.S. s. 212.06(14)(b) to "trade fixtures" would be eliminated. It and a reference to "machinery and equipment" are said to have caused some "unintentional reclassification of some types of property which have historically been treated as real property." Contractors making real property improvements generally pay tax on tangible personal property purchased for that purpose but do not collect tax from their customers. The Department proposal would clarify the definition of "fixtures" (which are not real property) to deal with M&E used in manufacturing and to eliminate reference to "trade fixtures."

6. The Department proposes clarifying the prorated sales tax applicable to vessels, railroads and motor vehicles engaged in interstate or foreign commerce when the carrier has been operating for less than one year and replacing references to the ICC with the Surface Transportation Board.

7. Sales tax penalties which the Department considers "automatic" would be eliminated in certain circumstances (first time or minor errors), and eliminated or reduced if the taxpayer has a "good compliance history." Penalties for conversion of sales tax collected to business or personal use would be strengthened. 8. Certain first year information returns from entities exempt from Florida corporate income tax would be eliminated.

9. The Department is proposing that the certified audit program, scheduled to sunset on July 1, 2002, be extended for four years. The program allows taxpayers to hire private CPA firms to perform compliance audits, incentivized by the waiver of penalties, the first $25,000 in interest and 25% of interest in excess of $25,000.

10. The Department is proposing to preclude the use of qui tam actions with respect to unpaid taxes, making the rewards program in F.S. 213.30 the exclusive means of being compensated for information regarding another person's failure to comply with State tax laws.

11. The Department is proposing several changes recommended by the Auditor General in connection with a report critical of the Department's supervision of county ad valorem property taxes. The Department has already acted administratively on most of the criticisms. The proposals address such matters as documentation of criteria used to evalue sample representativeness for ratio-study purposes, substratification by market areas and value groups in sales ratio-study samples, reporting of levels of assessment in excess of 100% of market value, accommodating the assessment-increase limits in the 1992 Save Our Homes constitutional amendment, and use of a 4-year moving average in reporting county-by-county levels of assessment.

12. The Property Tax Administration Task Force created by the Department in May 2000 would be made a creature of statute and given an additional 3-year life.

Posted: 2000-11-13 00:00:00.0

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