This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives.
STORAGE NAME: h0609.WMC
DATE: 1/30/2024
HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: HB 609 Local Business Taxes
SPONSOR(S): Botana and others
TIED BILLS: IDEN./SIM. BILLS: SB 1144
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee Berg Aldridge
2) Local Administration, Federal Affairs & Special
Districts Subcommittee
3) State Affairs Committee
SUMMARY ANALYSIS
The local business tax authorized under Chapter 205, F.S., represents the taxes charged and the method by
which a local government authority grants the privilege of engaging in or managing any business, profession,
or occupation within its jurisdiction. Counties and municipalities may levy a business tax, and the tax proceeds
are considered general revenue for the local government. This tax does no refer to any regulatory fees or
licenses paid to any board, commission, or officer for permits, registration, examination, or inspection.
The bill repeals Chapter 205, F.S., and makes conforming changes to Florida statutes.
The bill has an effective date of July 1, 2024.
The Revenue Estimating Conference estimates the bill would have no impact on state government revenues
and would have a recurring impact on local government revenues of -$220.4 million dollars beginning in FY
2024-25.
This bill may be a county or municipality mandate requiring a two-thirds vote of the membership of the
House. See Section III.A.1 of the analysis. STORAGE NAME: h0609.WMC PAGE: 2
DATE: 1/30/2024
FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Background
The local business tax, authorized in Chapter 205, F.S., represents the fees charged and the method
by which a local government authority grants the privilege of engaging in or managing any business,
profession, or occupation within its jurisdiction. Counties and municipalities may levy a business tax,
and the tax proceeds are considered general revenue for the local government.
1
This tax does no refer
to any regulatory fees or licenses paid to any board, commission, or officer for permits, registration,
examination, or inspection.
2
Prior to 1972, the state imposed an occupational license tax and shared the revenues with the counties.
Municipalities levied their own occupational license taxes pursuant to local ordinance or resolution.
Counties had no authority to levy an occupational license tax until October 1, 1972, when Chapter 72-
306, Laws of Florida, repealed the state tax and authorized both counties and cities to impose an
occupational tax at the state or city rate then in effect. In 1980, the legislature authorized counties and
municipalities to increase rates by a specified percentage based upon the rates then in effect.
3
In
1986, the legislature authorized Miami-Dade, Broward, Monroe and Collier counties to increase their
rates by an additional 50%, with the proceeds being dedicated to specified economic development
activities.
4
Effective January 1, 2007, the legislature changed the name of the Local Occupational License Tax to
the Local Business Tax.
5
This was done in response to some individuals representing that the fact that
they had obtained an “occupational license” under Chapter 205, F.S., conferred upon them some type
of official proof of their competency to perform various repairs and services. The name change was
intended to clarify that the payments made under Chapter 205, F.S., were taxes and not some type of
regulatory fee.
Administrative Procedures
In order to levy a business tax, the governing body must first give at least 14 days of public notice
between the first and last reading of the resolution or ordinance by publishing a notice in a newspaper
of general circulation within its jurisdiction as defined by law.
6
The public notice must contain the
proposed classifications and rates applicable to the business tax.
7
A number of other conditions for
levy are imposed on counties and municipalities.
8
For purposes of Chapter 205, F.S., the terms “business,” “profession,” and “occupation” do not include
the customary religious, charitable, or educational activities of nonprofit religious, nonprofit charitable,
and nonprofit educational institutions in the state.
9
These institutions are more particularly defined and
limited in statute.
10
The term “receipt” means the document that is issued by the local governing
authority which bears the words “Local Business Tax Receipt” and evidences that the person in whose
1
Sections 205.033 and 205.042, F.S.
2
Section 205.022(5), F.S.
3
Chapter 80-274, L.O.F.
4
Chapter 86-298, L.O.F.
5
Chapter 2006-152, L.O.F.
6
Sections 205.033 and 205.042, F.S.
7
Id.
8
Sections 205.033 and 205.043, F.S.
9
Section 205.022(1), F.S.
10
Id. STORAGE NAME: h0609.WMC PAGE: 3
DATE: 1/30/2024
name the document is issued has complied with the provisions of Chapter 205, F.S., relating to the
business tax.
11
The governing body of a municipality that levies the tax may request that the county in which the
municipality is located issue the municipal receipt and collect the tax.
12
The governing body of a county
that levies the tax may request that municipalities within the county issue the county receipt and collect
the tax.
13
However, before any local government issues any business receipts on behalf of another
local government, appropriate agreements must be entered into by the affected local governments.
14
All business tax receipts are sold by the appropriate tax collector beginning July 1st of each year.
15
The taxes are due and payable on or before September 30th of each year, and the receipts expire on
September 30th of the succeeding year.
16
In several situations, administrative penalties are also
imposed.
17
New Tax Levies
A county or municipality that has not yet adopted a business tax ordinance or resolution may adopt a
business tax ordinance pursuant to s. 205.0315, F.S. The tax rate structure and classifications in the
adopted ordinance must be reasonable and based upon the rate structure and classifications
prescribed in ordinances adopted by adjacent local governments that have implemented a local
business tax.
18
If no adjacent local government has implemented a local business tax, or if the
governing body of the county or municipality finds that the rate structures or classifications of adjacent
local governments are unreasonable, then an alternative method is authorized. In such a case, the rate
structure or classifications prescribed in the ordinance of the local government seeking to impose the
tax may be based upon those prescribed in ordinances adopted by local governments that have
implemented a local business tax, in counties or municipalities that have a comparable population.
19
Tax Base/Rate Restructuring
Currently, counties and municipalities with an existing local business tax may not reclassify businesses,
professions, and occupations.
20
However, those counties and municipalities that underwent a
reclassification and rate structure revision pursuant to s. 205.0535, F.S., prior to October 1, 1995, or
during a window of time available from July 1, 2007, through October 1, 2008, for certain municipalities
may, every other year, increase or decrease by ordinance the rates of business taxes by up to 5
percent.
21
However, an increase may not be enacted by less than a majority plus one vote of the
governing body.
22
A county or municipality is not prohibited from decreasing or repealing any
authorized local business tax.
23
Exemptions
Chapter 205, F.S., provides several exemptions and exclusions from local business taxes. Customary
religious, charitable, or educational activities of nonprofit religious, nonprofit charitable, and nonprofit
11
Section 205.022(2), F.S.
12
Section 205.045, F.S.
13
Id.
14
Id.
15
Section 205.053, F.S.
16
Id.
17
Id.
18
Section 205.0315, F.S..
19
Id.
20
Section 205.0535, F.S.
21
Section 205.0535(4), F.S.
22
Id.
23
Id. STORAGE NAME: h0609.WMC PAGE: 4
DATE: 1/30/2024
educational institutions are excluded from the definition of “business,” “profession,” and “occupation”
and are thereby excluded from paying local business taxes.
24
There is an optional partial exemption for
businesses located in enterprise zones.
25
The delivery and transportation of tangible personal property
by a business that is otherwise required to pay a local business tax may not be charged a separate
local business tax for such delivery or transportation service.
26
There are also exemptions for persons
engaged in specified farming activities,
27
certain nonresident persons regulated by the Department of
Professional Regulation,
28
certain employees of businesses that are required to pay a local business
tax,
29
certain disabled persons, the aged, and widows with minor dependents,
30
disabled veterans of
any war or their unremarried spouses,
31
and certain mobile home setup operations.
32
Charitable,
religious, fraternal, youth, civic, service, or other similar organization that make occasional sales or
engage in fundraising projects that are performed exclusively by the members where the proceeds
derived from the activities are used exclusively in the charitable, religious, fraternal, youth, civic and
service activities of the organization are also exempt.
33
Regulatory Provisions
Section 205.194, F.S., provides that any person applying for or renewing a local business tax receipt to
practice any profession or engage in or manage any business or occupation regulated by the
Department of Business and Professional Regulation, the Florida Supreme Court, or any other state
regulatory agency, including any board or commission thereof, must exhibit an active state certificate,
registration, or license, or proof of copy of the same, before such local receipt may be issued.
Sections 205.196, 205.1965, 205.1967, 205.1969, 205.1971, 205.1973 and 205.1975, F.S., provide
similar requirements for production of evidence of appropriate licensure prior to issuance of a business
tax receipt for pharmacies and pharmacists, assisted living facilities, pest control, health studios, sellers
of travel and telemarketing businesses, respectively.
Distribution of Revenues
The revenues derived from the business tax imposed by county governments, exclusive of the costs of
collection and any credit given for municipal business taxes, are apportioned between the county’s
unincorporated area and the incorporated municipalities located within the county by a ratio derived by
dividing their respective populations by the county’s total population.
34
Within 15 days following the
month of receipt, the apportioned revenues are sent to each governing authority; however, this
provision does not apply to counties that have established a new rate structure pursuant to s. 205.0535,
F.S.
35
Authorized Uses of Revenues
The tax proceeds are considered general revenue for the county or municipality. Additionally, the
county business tax proceeds may be used for overseeing and implementing a comprehensive
economic development strategy through advertising, promotional activities and other sales and
marketing techniques.
36
The proceeds of the additional county business tax imposed pursuant to s.
24
Section 205.022(1), F.S.
25
Section 205.054, F.S.
26
Section 205.063, F.S.
27
Section 205.064, F.S.
28
Section 205.065, F.S.
29
Section 205.066, F.S.
30
Section 205.162, F.S.
31
Section 205.171, F.S.
32
Section 205.193, F.S.
33
Section 205.192, F.S.
34
Section 205.033(4), F.S.
35
Section 205.033(5), F.S.
36
Section 205.033(7), F.S. STORAGE NAME: h0609.WMC PAGE: 5
DATE: 1/30/2024
205.033(6), F.S., shall be distributed by the county’s governing body to a designated organization or
agency for the purpose of implementing a comprehensive economic development strategy through
advertising, promotional activities, and other sales and marketing techniques.
37
Total Revenues Collected
In fiscal year 2019-20, the last year for which complete and final data is available, counties collected a
total of $28.5 million of local business tax revenue.
38
In that same fiscal year, municipalities collected a
total of $168.4 million of local business tax revenue.
39
Effect of Proposed Changes
The bill would repeal Chapter 205, F.S., and would make conforming changes to Florida statutes to
eliminate references to the chapter.
B. SECTION DIRECTORY:
Section 1: Repeals Chapter 205, F.S.
Section 2: Amends s. 125.01047, F.S., to delete a reference to local business taxes.
Section 3: Amends s. 166.04465, F.S., to delete a reference to local business taxes.
Section 4: Amends s. 202.24(2)(c), F.S., to delete a reference to local business taxes.
Section 5: Amends s. 213.0535(4)(a), F.S., to delete a reference to local business taxes.
Section 6: Amends s. 213.756(2)(b), F.S., to delete a reference to local business taxes.
Section 7: Amends s. 213.055, F.S., to delete a reference to local business taxes.
Section 8: Amends s. 290.0057(1)(e),F.S., to delete a reference to local business taxes.
Section 9: Amends s. 330.41, F.S., to delete a reference to local business taxes.
Section 10: Amends s. 337.401(3)(f), F.S., conforming provisions to changes made by the bill.
Section 11: Redesignates specified paragraphs in s. 376.84(1), F.S., and amends s. 376.84(1)(d),
F.S., to delete a reference to local business taxes.
Section 12: Renumbers specified subsections of s. 379.3761, F.S., and amends the same to delete a
reference to local business taxes.
Section 13: Amends s. 482.071, F.S., to delete a reference to local business taxes.
Section 14: Redesignates specified paragraphs in s. 482.242, F.S., and amends s. 482.242(1)(a), F.S.,
to delete a reference to local business taxes.
Section 15: Amends s. 489.127(1), F.S., to delete a reference to local business taxes.
Section 16: Redesignates specified paragraphs in s. 489.128(1), F.S. and amends s. 489.128(1)(b),
F.S., to delete a reference to local business taxes.
37
Section 205.033(6)(b), F.S.
38
Revenue Estimating Conference Workpapers for HB 609, Impact Conference dated December 8, 2023, available at
http://edr.state.fl.us/Content/conferences/revenueimpact/archives/2024/_pdf/page36-39.pdf (last visited January 27, 2024).
39
Id. STORAGE NAME: h0609.WMC PAGE: 6
DATE: 1/30/2024
Section 17: Amends s.489.131,F.S., to delete a reference to local business taxes.
Section 18: Redesignates specified paragraphs in s. 489.532(1), F.S. and amends s. 489.532(1)(b),
F.S., to delete a reference to local business taxes.
Section 19: Renumbers 489.537(9), F.S., and amends the same to delete a reference to local business
taxes.
Section 20: Amends s. 500.12, F.S., to delete a reference to local business taxes.
Section 21: Amends s. 500.511(3), to delete a reference to local business taxes.
Section 22: Renumbers specified subsection in s. 501.015, F.S., and amends subsection (7) of that
section to delete a reference to local business taxes.
Section 23: Amends s. 501.016, F.S., to delete a reference to local business taxes.
Section 24: Amends s. 501.160, F.S., to delete a reference to local business taxes.
Section 25: Amends s. 507.13, F.S., to delete a reference to local business taxes.
Section 26: Amends s. 539.001, F.S., to delete a reference to local business taxes.
Section 27: Amends. S. 559.904, F.S., to delete a reference to local business taxes.
Section 28: Amends s. 559.928, F.S., to delete a reference to local business taxes.
Section 29: Amends s. 559.9281, F.S., to delete a reference to local business taxes.
Section 30: Amends s. 559.935, F.S., to delete a reference to local business taxes.
Section 31: Amends s. 559.939, F.S., to delete a reference to local business taxes.
Section 32: Amends s. 559.955, F.S., to delete a reference to local business taxes.
Section 33: Amends s. 616.12, F.S., to delete a reference to local business taxes.
Section 34. Provides an effective date of July 1, 2024
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
None.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimated the bill to have a recurring impact on local
government revenues of -$220.4 million in fiscal year 2024-25.
STORAGE NAME: h0609.WMC PAGE: 7
DATE: 1/30/2024
2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Persons and businesses currently paying a local business tax would no longer be required to do so.
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 eliminates the local businesses taxes authorized under Chapter 205, F.S.
This bill does not appear to qualify under any exemption or exception. If the bill does qualify as a
mandate, final passage must be approved by two-thirds of the membership of each house of the
Legislature.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
None.
C. DRAFTING ISSUES OR OTHER COMMENTS:
Conforming changes may also be needed to sections 489.119(4), 489.516(3), 489.521(6), and
489.5315, F.S.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES