The Florida Senate
BILL ANALYSIS AND FISCAL IMPACT STATEMENT
(This document is based on the provisions contained in the legislation as of the latest date listed below.)
Prepared By: The Professional Staff of the Committee on Finance and Tax
BILL: CS/CS/SB 1146
INTRODUCER: Finance and Tax Committee; Commerce and Tourism Committee; and Senator
Rodriguez
SUBJECT: Taxation of Investigative Services
DATE: February 10, 2022
ANALYST STAFF DIRECTOR REFERENCE ACTION
1. Renner McKay CM Fav/CS
2. Sachmorov Babin FT Fav/CS
3. AP
Please see Section IX. for Additional Information:
COMMITTEE SUBSTITUTE - Substantial Changes
I. Summary:
CS/SB 1146 provides an exemption from the sales and use tax for investigative services provided
by a small private investigative agency.
The Revenue Estimating Conference analyzed an earlier version of the bill and determined it will
reduce General Revenue Fund receipts by $300,000 in Fiscal Year 2022-2023 with a recurring
impact of $300,000. The bill will reduce local revenues by $100,000 in Fiscal Year 2022-2023
with a recurring local impact of $100,000. Staff estimates that the current version of the bill has a
similar fiscal impact.
The bill takes effect July 1, 2022.
II. Present Situation:
Florida Sales and Use Tax
Florida levies a 6 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.,
1
Section 212.05(1)(a)1.a., F.S.
2
Section 212.04(1)(b), F.S.
3
Section 212.03(1)(a), F.S.
REVISED: BILL: CS/CS/SB 1146 Page 2
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.
4
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.
5
Private Investigative Services
The Division of Licensing within the Department of Agriculture and Consumer Services
oversees the regulation of licensing of private investigative services.
6
As of December 31, 2021,
the Division has issued 2,627 private investigative agency licenses and 6,992 private investigator
licenses.
7
A “private investigator” is defined as any individual who, for consideration, advertises as
providing or performs private investigation.
8
A “private investigative agency” means any person
who, for consideration, advertises as providing or is engaged in the business of furnishing
privation investigations.
9
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.
10
4
Section 212.07(2), F.S.
5
Section 212.05(1)(i)1., F.S.
6
Chapter 493, F.S.
7
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 Feb. 02, 2022).
8
Section 493.6101(16), F.S.
9
Section 493.6101(15), F.S.
10
Section 493.6101(17), F.S. BILL: CS/CS/SB 1146 Page 3
III. Effect of Proposed Changes:
The bill exempts investigative services provided by a small private investigative agency from the
sales and use tax.
The bill defines a “small private investigative agency” as a private investigator licensed
under s. 493.6201, F.S., which:
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 previous calendar year for providing
private investigation services for all its businesses related through common ownership.
The bill grants emergency rule making authority for the Department of Revenue.
The bill takes effect July 1, 2022.
IV. Constitutional Issues:
A. Municipality/County Mandates Restrictions:
Article VII, s. 18 of the Florida Constitution governs laws that require counties and
municipalities to spend funds, limit the ability of counties and municipalities to raise
revenue, or reduce the percentage of state tax shared with counties and municipalities.
Subsection (b) of Art. VII, s. 18 of the Florida Constitution provides that except upon
approval of each house of the Legislature by two-thirds vote of the membership, the
legislature may not enact, amend, or repeal any general law if the anticipated effect of
doing so would be to reduce the authority that municipalities or counties have to raise
revenue in the aggregate, as such authority existed on February 1, 1989. However, the
mandates requirements do not apply to laws having an insignificant impact,
11
,
12
which is
$2.3 million or less for Fiscal Year 2022-2023.
13
The Revenue Estimating Conference determined that language very similar to that
contained in the bill will reduce the authority that counties have to raise revenue from the
local option sales tax by $100,000 in Fiscal Year 2022-2023. Therefore, the mandates
provision may not apply as the impact is insignificant.
11
FLA. CONST. art. VII, s. 18(d).
12
An insignificant fiscal impact is the amount not greater than the average statewide population for the applicable fiscal year
multiplied by $0.10. See Florida Senate Committee on Community Affairs, Interim Report 2012-115: Insignificant Impact,
(September 2011), available at http://www.flsenate.gov/PublishedContent/Session/2012/InterimReports/2012-115ca.pdf (last
visited Feb 03, 2022).
13
Based on the Demographic Estimating Conference’s estimated population adopted on March 3, 2021. The conference
packet is available at http://edr.state.fl.us/Content/conferences/population/archives/210303demographic.pdf (last visited Feb.
02, 2022). BILL: CS/CS/SB 1146 Page 4
B. Public Records/Open Meetings Issues:
None.
C. Trust Funds Restrictions:
None.
D. State Tax or Fee Increases:
Section 19 of Article VII, Florida Constitution requires increased taxes or fees to be
passed in a separate bill and by two-thirds vote of the membership of each house of the
Legislature. This bill does not increase any taxes or fees; therefore, the increased tax or
fee requirements do not apply.
E. Other Constitutional Issues:
None identified.
V. Fiscal Impact Statement:
A. Tax/Fee Issues:
The Revenue Estimating Conference analyzed an earlier version of the bill and
determined it will reduce General Revenue Fund receipts by $300,000 in Fiscal Year
2022-2023 with a recurring impact of $300,000. The bill will reduce local revenues by
$100,000 in Fiscal Year 2022-2023 with a recurring local impact of $100,000. Staff
estimates that the current version of the bill has a similar fiscal impact.
B. Private Sector Impact:
Certain small private investigative agencies may incur savings due to the sales and use
tax exemption on the sale of investigative services.
C. Government Sector Impact:
None.
VI. Technical Deficiencies:
None.
VII. Related Issues:
None.
VIII. Statutes Affected:
This bill substantially amends section 212.08 of the Florida Statutes. BILL: CS/CS/SB 1146 Page 5
IX. Additional Information:
A. Committee Substitute – Statement of Substantial Changes:
(Summarizing differences between the Committee Substitute and the prior version of the bill.)
CS by Commerce and Tourism January 31, 2022:
Modifies the definition of a “small private investigative agency” to provide that the
agency must have received less than $50,000 for each employee in taxable
compensation during the previous calendar year for providing private investigative
services.
CS by Finance and Tax February 10, 2022:
Modifies the definition of a “small private investigative agency” to provide that the
agency must have reported less than $150,000 in taxable sales during the previous
calendar year for providing private investigative services.
Grants emergency rule making authority for the Department of Revenue.
B. Amendments:
None.
This Senate Bill Analysis does not reflect the intent or official position of the bill’s introducer or the Florida Senate.