This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0763.RRS
DATE: 2/5/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 763 Tax Exemption for Charges for Private Investigations
SPONSOR(S): Casello and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1146
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee Thompson Anstead
2) Ways & Means Committee
3) Commerce Committee
SUMMARY ANALYSIS
Florida levies a six percent sales and use tax on the sale or rental of most tangible personal property,
admissions, transient rentals, and a limited number of services.
The state of Florida does not usually collect sales tax from the vast majority of services performed. An example
of taxed services would be investigative and crime protection services, interior nonresidential cleaning
services, nonresidential pest control services, or a service which includes repairing or creating a product. This
means that a yoga instructor would not be required to collect sales tax, while a janitor or private investigator
may be required to collect sales tax.
Chapter 212, F.S., contains provisions authorizing the levy and collection of Florida’s sales and use tax, as well
as the exemptions and credits applicable to certain items or uses under specified circumstances. Sales tax is
added to the price of the taxable good or service and collected from the purchaser at the time of sale.
Currently, charges for detective, burglar protection, and other protection services listed under the North
American Industry Classification System (NAICS), including investigative services, security guards and patrol
services, armored car services, and security systems services, except locksmiths, are subject to the 6 percent
sales and use tax.
The bill exempts charges for private investigations provided by a small private investigative agency from the
sales and use tax.
The bill defines the term "small private investigative agency" as a person licensed as a private investigator that
employs three or fewer employees and that received less than $50,000 in compensation during the preceding
calendar year for providing private investigations for all businesses that are related through common
ownership.
The Revenue Estimating Conference estimated that the bill will have a negative cash and recurring impact on
General Revenue of $0.3 million in FY 2022-23, and a negative cash and recurring impact on local government
revenues of $0.1 million in FY 2022-23.
The effective date of the bill is July 1, 2022.
STORAGE NAME: h0763.RRS PAGE: 2
DATE: 2/5/2022
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Background
Florida Sales and Use Tax
Florida levies a six percent sales and use tax on the sale or rental of most tangible personal property,
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admissions,
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transient rentals,
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and a limited number of services. Chapter 212, F.S., authorizes the levy
and collection of Florida’s sales and use tax and provides the exemptions and credits applicable to
certain items or uses under specified circumstances. Sales tax is added to the price of the taxable good
or service and collected from the purchaser at the time of sale.
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The state of Florida does not usually collect sales tax from the vast majority of services performed. An
example of taxed services would be investigative and crime protection services, interior nonresidential
cleaning services, nonresidential pest control services, or a service which includes repairing or creating
a product. This means that a yoga instructor would not be required to collect sales tax, while a janitor or
private investigator may be required to collect sales tax.
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Counties are authorized to impose local discretionary sales surtaxes in addition to the state sales tax.
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A surtax applies to “all transactions occurring in the county which transactions are subject to the state
tax imposed on sales, use, services, rentals, admissions, and other transactions by [ch. 212, F.S.], and
communications services as defined in ch. 202, F.S.”
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The discretionary sales surtax is based on the
tax rate imposed by the county where the taxable goods or services are sold or delivered. Discretionary
sales surtax rates currently being levied vary by county in a range of 0.5 to 2.5 percent.
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Currently, charges for detective, burglar protection, and other protection services listed under the North
American Industry Classification System (NAICS) National Numbers 561611 (investigative services),
561612 (security guards and patrol services), 561613 (armored car services), and 561621 (security
systems services, except locksmiths) are subject to the 6 percent sales and use tax.
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Fingerprint
services required under s. 790.06, F.S., or s. 790.062, F.S., are not subject to the tax.
Law enforcement
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and public safety services are not subject to tax irrespective of whether the duty is
characterized as “extra duty,” “off-duty,” or “secondary employment,” and irrespective of whether the
officer is paid directly or through the officer’s agency by an outside source.
Charges for detective, burglar protection, and other protection security services performed in this state
but used outside this state are exempt from taxation. Charges for detective, burglar protection, and
other protection security services performed outside this state and used in this state are subject to
tax.
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1
S. 212.05(1)(a)1.a., F.S.
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S. 212.04(1)(b), F.S.
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S. 212.03(1)(a), F.S.
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S. 212.07(2), F.S.
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Sales Tax Handbook, Florida Sales Tax, https://www.salestaxhandbook.com/florida (last visited Feb. 4, 2022).
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S. 212.055, F.S.
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Section 212.054(2)(a), F.S.
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Office of Economic and Demographic Research, Florida Tax Handbook, 227-228 (2021),
http://edr.state.fl.us/Content/revenues/reports/tax-handbook/taxhandbook2021.pdf (last visited Feb. 02, 2022).
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S. 212.05(1)(i)1., F.S.
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S. 943.10(1), F.S., defines “law enforcement officer” as any person who is elected, appointed, or employed full time by any
municipality or the state or any political subdivision thereof; who is vested with authority to bear arms and make arrests; and whose
primary responsibility is the prevention and detection of crime or the enforcement of the penal, criminal, traffic, or highway laws of
the state.
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S. 212.05(1)(i)3., F.S. STORAGE NAME: h0763.RRS PAGE: 3
DATE: 2/5/2022
Private Investigative Services
The Division of Licensing within the Department of Agriculture and Consumer Services (DACS)
oversees the regulation of licensing of private investigative services.
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As of December 31, 2021, the
Division has issued 2,627 private investigative agency licenses and 6,992 private investigator
licenses.
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A “private investigator” is defined as any individual who, for consideration, advertises as providing or
performs private investigations.
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A “private investigative agency” means any person who, for
consideration, advertises as providing or is engaged in the business of furnishing privation
investigations.
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“Private investigation” is defined as an investigation to obtain information on any of the
following matters:
Crime or wrongs done or threatened against the United States or any state or territory of the
United States, when operating under express written authority of the governmental official
responsible for authorizing such investigation.
The identity, habits, conduct, movements, whereabouts, affiliations, associations, transactions,
reputation, or character of any society, person, or group of persons.
The credibility of witnesses or other persons.
The whereabouts of missing persons, owners of unclaimed property or escheated property, or
heirs to estates.
The location or recovery of lost or stolen property.
The causes and origin of, or responsibility for, fires, libels, slanders, losses, accidents, damage,
or injuries to real or personal property.
The business of securing evidence to be used before investigating committees or boards of
award or arbitration or in the trial of civil or criminal cases and the preparation thereof.
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Applicants for licensure as a private investigator must complete and submit an application to DACS and
meet certain requirements. An applicant must:
Be at least 18 years old;
Be one of the following:
o A United States citizen,
o A permanent legal resident, or
o A holder of a work visa from the United States Citizenship and Immigration Service;
Have no disqualifying criminal history;
Be of good moral character;
Have no history of:
o Mental illness,
o Alcohol abuse, or
o Substance abuse; and
Submit an application with certain identifying information;
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and
Complete 40 hours of required training and submit proof thereof to DACS.
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To become a private investigator in Florida, a Class “C” Private Investigator license is required.
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An
applicant for the Class "C" Private Investigator license must have two years of lawfully gained,
verifiable, full-time experience to qualify for the license.
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In order to carry a firearm in the course of
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Ch. 493, F.S.
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Department of Agriculture and Consumer Services, Division of Licensing Statistical Reports (as of December 31, 2021), available
at https://www.fdacs.gov/Divisions-Offices/Licensing/Statistical-Reports (last visited Jan. 28, 2022).
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Section 493.6101(16), F.S.
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Section 493.6101(15), F.S.
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Section 493.6101(17), F.S.
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S. 493.6105, F.S.
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S. 493.6303(4)(a), F.S.
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S. 493.6201(5), F.S.
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S. 493.6203, F.S. STORAGE NAME: h0763.RRS PAGE: 4
DATE: 2/5/2022
performing such duties, the licensee must also obtain a Class “G” Statewide Firearm license in addition
to the Class “C” Private Investigator license.
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Effect of the Bill
The bill exempts charges for private investigations provided by a “small private investigative agency”
from the sales and use tax.
The bill defines the term "small private investigative agency" as:
a person as defined in s. 212.02(12), F.S.,
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licensed as a private investigator under s.
493.6201, F.S., that employs three or fewer employees and that received less than $50,000
in compensation during the preceding calendar year for providing private investigations, as
that term is defined in s. 493.6101(17), F.S., for all businesses that are related through
common ownership.
The bill defines the term "employees" as:
all full-time and part-time employees currently employed by a small private investigative
agency at all of its business locations, wherever they are located, including any person
performing services for the small private investigative agency under an arrangement for
employee leasing as that term is defined in s. 468.520(4), F.S.
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B. SECTION DIRECTORY:
Section 1: Amends s. 212.05, F.S., relating to sales, storage, use tax.
Section 2: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The Revenue Estimating conference estimated that the bill will have a negative cash and recurring
impact on General Revenue of $0.3 million in FY 2022-23.
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2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating conference estimated that the bill will have a negative cash and recurring
impact on local government revenues of $0.1 million in FY 2022-23.
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2. Expenditures:
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S. 493.6115(2), F.S.
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S. 212.02(12), F.S., defines “person” as any individual, firm, copartnership, joint adventure, association, corporation, estate, trust,
business trust, receiver, syndicate, or other group or combination acting as a unit and also any political subdivision, municipality, state
agency, bureau, or department and includes the plural as well as the singular number.
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S. 468.520(4), defines “employee leasing” as an arrangement whereby a leasing company assigns its employees to a client and
allocates the direction of and control over the leased employees between the leasing company and the client.
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2022 Regular Session Revenue Estimating Conference, Impact Conference Results (Jan. 07, 2022), ps. 173-175,
http://edr.state.fl.us/content/conferences/revenueimpact/archives/2022/_pdf/Impact0107.pdf (last visited Feb. 02, 2022).
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Id. STORAGE NAME: h0763.RRS PAGE: 5
DATE: 2/5/2022
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Charges for private investigations provided by small private investigative agencies will be exempt from
sales tax.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
The county/municipality mandates provision of Art. VII, section 18, of the Florida Constitution may
apply because this bill may reduce revenues collected by counties and municipalities related to
taxes and private investigative services; however, an exemption may apply. The insignificant fiscal
impact exemption may apply because the statewide fiscal impact to counties and municipalities is
approximately $100,000.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The Department of Revenue may be required to undergo rulemaking to update Rule 12A-1.0092 of
the Florida Administrative Code.
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C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
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Fla. Dept. of Revenue, Agency Analysis of 2022 HB 763, p.2 (Dec. 16, 2021).