Florida Senate - 2022 SB 930 By Senator Hooper 16-01093-22 2022930__ 1 A bill to be entitled 2 An act relating to sales tax exemptions for public 3 works; amending s. 212.08, F.S.; providing instances 4 when sales of certain tangible personal property to 5 contractors are not exempt from sales and use tax; 6 prohibiting certain nonprofit entities that used a 7 sales tax exemption illegally from transferring 8 liability for the tax, penalty, or interest to another 9 party; requiring the Department of Revenue to adopt 10 rules for determining the propriety of exempt sales to 11 eligible nonprofit entities; requiring the department 12 to adopt rules prohibiting certain entities that 13 receive a sales tax exemption from assigning 14 responsibility related to tangible personal property 15 to other entities; requiring the department to 16 establish by rule a process to suspend a public 17 entitys ability to use a tax exemption if certain 18 conditions are met; amending s. 212.15, F.S.; 19 providing an exception for when certain taxes are 20 considered state funds; providing an effective date. 21 22 Be It Enacted by the Legislature of the State of Florida: 23 24 Section 1.Present paragraph (d) of subsection (6) of 25 section 212.08, Florida Statutes, is redesignated as paragraph 26 (e), a new paragraph (d) is added to that subsection, and 27 paragraphs (b) and (c) of that subsection are amended, to read: 28 212.08Sales, rental, use, consumption, distribution, and 29 storage tax; specified exemptions.The sale at retail, the 30 rental, the use, the consumption, the distribution, and the 31 storage to be used or consumed in this state of the following 32 are hereby specifically exempt from the tax imposed by this 33 chapter. 34 (6)EXEMPTIONS; POLITICAL SUBDIVISIONS; ELIGIBLE NONPROFIT 35 ENTITIES. 36 (b)The exemption provided under this subsection does not 37 include sales of tangible personal property made to contractors 38 employed directly to or as agents of any such government or 39 political subdivision if the contractor is responsible for 40 purchasing, maintaining, or paying for the tangible personal 41 property and the when such tangible personal property goes into 42 or becomes a part of public works owned by such government or 43 political subdivision. A determination of whether a particular 44 transaction is properly characterized as an exempt sale to a 45 government entity or a taxable sale to a contractor shall be 46 based upon the substance of the transaction rather than the form 47 in which the transaction is cast. However, for sales of tangible 48 personal property that go into or become a part of public works 49 owned by a governmental entity, other than the Federal 50 Government, a governmental entity claiming the exemption 51 provided under this subsection shall certify to the dealer and 52 the contractor the entitys claim to the exemption by providing 53 the dealer and the contractor a certificate of entitlement to 54 the exemption for such sales. If the department later determines 55 that such sales, in which the governmental entity provided the 56 dealer and the contractor with a certificate of entitlement to 57 the exemption, were not exempt sales to the governmental entity, 58 the governmental entity shall be liable for any tax, penalty, 59 and interest determined to be owed on such transactions. 60 Possession by a dealer or contractor of a certificate of 61 entitlement to the exemption from the governmental entity 62 relieves the dealer from the responsibility of collecting tax on 63 the sale and the contractor for any liability for tax, penalty, 64 or interest related to the sale, and the department shall look 65 solely to the governmental entity for recovery of tax, penalty, 66 and interest if the department determines that the transaction 67 was not an exempt sale to the governmental entity. The 68 governmental entity or other eligible nonprofit entity using a 69 sales tax exemption for any construction-related activities 70 covered in this chapter may not transfer liability for such tax, 71 penalty, and interest to another party by contract or agreement. 72 (c)The department shall adopt rules for determining 73 whether a particular transaction is properly characterized as an 74 exempt sale to a governmental entity or other eligible nonprofit 75 entity or a taxable sale to a contractor which give special 76 consideration to factors that govern the status of the tangible 77 personal property before being affixed to real property. In 78 developing such rules, assumption of the risk of damage or loss 79 is of paramount consideration in the determination. The 80 department shall clarify that a government, political 81 subdivision, religious institution, veterans organization, 82 school, college, university, or other eligible nonprofit entity 83 claiming the exemption may not assign any responsibility through 84 an agreement, oral or written, for the ordering, purchasing, 85 payment, or maintenance of the tangible personal property, 86 material, or supplies on behalf of that nonprofit entity. The 87 department shall also adopt, by rule, a certificate of 88 entitlement to exemption for use as provided in paragraph (b). 89 The certificate shall require the governmental entity to affirm 90 that it will comply with the requirements of this subsection and 91 the rules adopted under paragraph (b) in order to qualify for 92 the exemption and that it acknowledges its liability for any 93 tax, penalty, or interest later determined by the department to 94 be owed on such transactions. 95 (d)The department shall establish by rule a process by 96 which the department may suspend a public entitys ability to 97 use the tax exemption if the entity violates this section or 98 rules adopted thereunder. 99 Section 2.Subsection (1) of section 212.15, Florida 100 Statutes, is amended to read: 101 212.15Taxes declared state funds; penalties for failure to 102 remit taxes; due and delinquent dates; judicial review. 103 (1)The taxes imposed by this chapter shall be considered 104 state funds at the moment of collection, except as provided in 105 s. 212.06(5)(a)2.e., or unless an exemption is claimed under s. 106 212.08(6), become state funds at the moment of collection and 107 shall for each month be due to the department on the first day 108 of the succeeding month and be delinquent on the 21st day of 109 such month. All returns postmarked after the 20th day of such 110 month are delinquent. 111 Section 3.This act shall take effect July 1, 2022.