This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0763e.COM
DATE: 2/24/2022
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 763 Tax Exemption for Charges for Private Investigations
SPONSOR(S): Ways & Means Committee, Regulatory Reform Subcommittee, Casello and others
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1146
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Regulatory Reform Subcommittee 17 Y, 0 N, As CS Thompson Anstead
2) Ways & Means Committee 15 Y, 0 N, As CS Berg Aldridge
3) Commerce Committee 22 Y, 0 N Thompson Hamon
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. 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.
The state of Florida does not usually collect sales tax from the vast majority of services performed. 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 investigative services provided by a small private investigative agency
from the sales and use tax.
The bill defines the term "small private investigative agency" as a licensed private investigator that employs
three or fewer employees and reported less than $150,000 in taxable sales during the preceding calendar year
for providing private investigative services.
The bill provides emergency rulemaking authority for the Department of Revenue.
The Revenue Estimating Conference (REC) estimated that the bill will have a cash impact on General
Revenue of -$1.2 million (-$2.2 million recurring), an insignificant negative cash and recurring impact on state
trust funds, and a cash impact of -$0.3 million (-$0.4 million recurring) on local government revenues in Fiscal
Year 2022-23.
The effective date of the bill is July 1, 2022.
STORAGE NAME: h0763e.COM PAGE: 2
DATE: 2/24/2022
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,
1
admissions,
2
transient rentals,
3
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.
4
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.
Counties are authorized to impose local discretionary sales surtaxes in addition to the state sales tax.
5
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.”
6
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 1.5 percent.
7
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.
8
Fingerprint
services required under s. 790.06, F.S., or s. 790.062, F.S., are not subject to the tax.
Law enforcement
9
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.
10
1
S. 212.05(1)(a)1.a., F.S.
2
S. 212.04(1)(b), F.S.
3
S. 212.03(1)(a), F.S.
4
S. 212.07(2), F.S.
5
S. 212.055, F.S.
6
S. 212.054(2)(a), F.S.
7
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).
8
S. 212.05(1)(i)1., F.S.
9
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.
10
S. 212.05(1)(i)3., F.S. STORAGE NAME: h0763e.COM PAGE: 3
DATE: 2/24/2022
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.
11
As of December 31, 2021, the
Division has issued 2,627 private investigative agency licenses and 6,992 private investigator
licenses.
12
A “private investigator” is defined as any individual who, for consideration, advertises as providing or
performs private investigations.
13
A “private investigative agency” means any person who, for
consideration, advertises as providing or is engaged in the business of furnishing privation
investigations.
14
“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.
15
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;
16
and
Complete 40 hours of required training and submit proof thereof to DACS.
17
Any person, firm, company, partnership, or corporation which engages in business as a private
investigative agency shall have a Class “A” license.
18
To become a private investigator in Florida, a
Class “C” Private Investigator license is required.
19
An applicant for the Class "C" Private Investigator
license must have two years of lawfully gained, verifiable, full-time experience to qualify for the
11
Ch. 493, F.S.
12
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).
13
S. 493.6101(16), F.S.
14
S. 493.6101(15), F.S.
15
S. 493.6101(17), F.S.
16
S. 493.6105, F.S.
17
S. 493.6303(4)(a), F.S.
18
S. 493.6201(1), F.S.
19
S. 493.6201(5), F.S. STORAGE NAME: h0763e.COM PAGE: 4
DATE: 2/24/2022
license.
20
In order to carry a firearm in the course of performing such duties, the licensee must also
obtain a Class “G” Statewide Firearm license in addition to the Class “C” Private Investigator license.
21
Effect of the Bill
The bill exempts charges for investigative services provided by a “small private investigative agency”
from the sales and use tax.
The bill defines the term "small private investigative agency" as:
A private investigator licensed as under s. 493.6201, F.S., that:
Employs three or fewer full-time or part-time employees, including those performing
services pursuant to an employment leasing arrangement as defined in s. 468.520(4),
F.S., and
Reported less than $150,000 in taxable sales during the preceding calendar year for
providing private investigative services for all businesses related through common
ownership.
The bill grants emergency rulemaking authority to the Department of Revenue.
The bill takes effect July 1, 2022.
B. SECTION DIRECTORY:
Section 1: Amends s. 212.08, F.S., to exempt private investigative services provided by a small
private investigative agency.
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 impact on
General Revenue of $1.2 million (negative $2.2 million recurring) in FY 2022-23, and an
insignificant negative cash and recurring impact on state trust funds in FY 2022-23.
22
2. Expenditures:
None.
20
S. 493.6203, F.S.
21
S. 493.6115(2), F.S.
22
2022 Regular Session Revenue Estimating Conference, Impact Conference Results (Feb. 18, 2022), p. 396,
http://edr.state.fl.us/content/conferences/revenueimpact/archives/2022/_pdf/Impact0218.pdf (last visited Feb. 23, 2022). STORAGE NAME: h0763e.COM PAGE: 5
DATE: 2/24/2022
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimated that the bill will have a negative cash impact on
local government revenues of $0.3 million (negative $0.4 million recurring) in FY 2022-23.
23
2. Expenditures:
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:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have
to raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The Department of Revenue is granted emergency rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
23
Id. STORAGE NAME: h0763e.COM PAGE: 6
DATE: 2/24/2022
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On Tuesday, February 8, 2022, the Regulatory Reform Subcommittee adopted one amendment and
reported the bill favorably as a committee substitute. The committee substitute:
Clarified that the sales tax exemption applies to “private investigative agencies.”
Applied the $50,000 compensation threshold to each of the three or fewer employees, instead
of to the business as a whole, and specifies that it must be “taxable” compensation.
On Thursday, February 17, 2022, the Ways & Means Committee adopted a strike-all amendment and
reported the bill favorable as a committee substitute. The committee substitute:
Revised the location of the exemption, from s. 212.05 to s. 212.08.
Clarified that the definition of “small private investigative agency” was limited to agencies with a
total of less than $150,000 in taxable services in the prior calendar year.
Provided emergency rulemaking authority to the Department of Revenue.
The analysis is drafted to the committee substitute as passed by the Ways & Means Committee.