Below you will find information on the bills and issues that Florida TaxWatch was following in the 2014 Session. For more information on any of these issues, please feel free to contact our Research staff by emailing Stephani Meyers, Research Assistant.
Legislative Update – Last Day of Session – May 2, 2014
Here is a look at the final result for this session’s tax legislation:
Reducing motor vehicle fees – SB 156 rolls back the annual motor vehicle license renewal registration fee increase that was enacted by the 2009 Legislature to offset the budget shortfall. This will save drivers between $20 and $25 each, with total savings of $395 million annually. Because the bill would go into effect on September 1, it will only reduce revenue by $309 million next budget year. The bill was passed early in the session and has been signed by the Governor.
Tax Cut Package – Although the motor vehicle fee cuts were agreed to early, what other tax cuts would be added to reach the Legislature’s $500 million goal was in doubt until the last days of session. The final result was HB 5601—a combination of many different proposals, most of them small.
The provisions in HB 5601 and their annualized savings are:
The Senate had included a reduction in the Communications Services Tax, a Florida TaxWatch recommendation. Unfortunately, as other cuts were added, the size of the CST cut was reduced and finally it was decided to drop it (see “DID NOT PASS” section below for more information). Cuts proposed in the House package that were not included in the final version include the Governor’s proposal to increase the Corporate Income Tax exemption from $50,000 to $75,000 ($21.6 million) and a Physical Fitness Club Membership Sales Tax Holiday ($5.0 million).
A provisions in HB 5601 that is supported by Florida TaxWatch is an annual shift of $160 million from General Revenue to the Public Education Capital Outlay Fund. This is accomplished by reducing the sales tax on business purchases of electricity (which goes to GR) and increasing the gross receipts tax on that electricity (which goes to PEC0). This had always been a revenue neutral move, with the changes to the sales tax and gross receipts tax being equal. However, a late amendment reduces the sales tax slightly more (.05 percent) than the gross receipts tax is increased. This will save businesses $3 million annually. Another good proposal that would have provided for an annual shift of $100 million from General Revenue to the State Transportation Trust Fund was taken out of the final version.
For more information on the House and Senate tax packages, see Florida TaxWatch’s recent report Comparing the House, Senate and Governor Tax Cut Proposals.
Soccer Sales Tax Exemption - HB 231 exempts tickets to a Major League Soccer All-Star game held in Florida from the sales tax. The other major professional sports’ all-star games are already exempt.
Communications Services Tax - HB 803 originally would have clarified that communications services used to furnish goods or services that are not subject to the CST would also not be subject to the CST. The bill was amended to instead clarify that data processing services that allow data to be generated, stored, processed, or retrieved and delivered by an electronic transmission to a purchaser where such purchaser’s purpose for the transaction is the processed data is not subject to the CST.
E911 Fees – HB 175 - Although it likely will not be described as a tax increase, this bill will increase collections of the Emergency 911 (E911) fee levied on phone services. The E911 fee funds costs incurred by local governments to install and operate 911 systems and reimburses providers for their costs. The current fee is 50 cents in most counties, but the fee is not being collected on prepaid calling cards. When the fee was established, prepaid cards were subject to the fee, but collection of the fee was not consistent or equitable. The fee on prepaid was suspended in 2007 and was scheduled to begin again on July 1, 2013. However, a collection mechanism does not exist. HB 175 will reduce the E911 fee from 50 cents to 40 cents and establishe a point of sale process to require sellers of prepaid cards to collect the fee. To reimburse sellers for the cost of collecting the fee, they can retain all of the money collected for two months, and 5 percent thereafter. After a loss of $1 million in FY 2014-15, it is estimated the combination of the reduced rate and the collection on prepaid cards will result in $3.2 million in additional fees being collected annually.
Car Sharing Services - HB 343 changes the way car-sharing services are taxed. The House bill would require a member of a car-sharing service who uses a motor vehicle for less than 24 hours shall to pay a surcharge of $1, rather than the current $2 per day rental car surcharge. It is estimated this will cost $500,000 annually, including a $400,000 loss to the State Transportation Trust Fund.
DID NOT PASS
Reducing the Communications Services Tax - SB 266 would have reduced the state portion of the communications services tax (CST) from 6.65 percent to 4.65 percent and the CST rate on direct-to-home satellite from 10.8 percent to 8.8 percent. The CST is levied on the sales of communications services including telephone (landline, mobile and voice over internet), cable television and other video service, and direct-to-home satellite television. Eventually, the CST tax cut was moved to the Senate tax cut package but the size of the cut was reduced from 2 percentage points to 0.58 percent, allowing for the $500 million total tax cut target. Florida TaxWatch research has called for a reduction in the CST, pointing out that Florida has one of the highest tax rates on communications services in the nation and that rate (which can exceed 16 percent including the local levy) is much higher than the sales tax rate on other retail purchases in Florida. Lawmakers would be hard pressed to find a more justifiable way to provide broad-based state tax relief than a reduction in the CST. Unfortunately, the CST reduction did not make the final tax cut package.
Corporate Income Tax Exemption: Since taking office, Governor Scott has been committed to eliminating the corporate income tax. The standard exemption was increased from $5,000 to $25,000 in 2011 and to $50,000 in 2012. His 2014 recommendations to increase the exemption to $75,000 would totally exempt another 2,163 corporations, which is equal to nearly one-fifth (19 percent) of those companies currently paying the tax. The increased exemption would have saved business $21.6 million annually. The exemption was included in the original House tax cut package but did not make the final version of HB 5601.
Collection of Sales Taxes on Remote Sales: Florida TaxWatch has been researching this issue and recommending solutions for more than 10 years. Several bills were filed to help address this but none were heard. The disappointing end became clear when SM 196 failed on voice vote on the Senate floor early in the session. This memorial urged Congress to pass the Marketplace Fairness Act. Failing to even advance this symbolic gesture, it was apparent this issue would go unaddressed again. HB 217, HB 857 and SB 818 would have brought Florida fully into the Streamlined Sales and Use Tax Agreement, which provides an opportunity for Florida to begin collecting money from a compact of sellers that voluntarily collect the tax. SB 202 would have expanded nexus over remote retailers, requiring them to collect tax on sales to Floridians. These bills were never heard.
Sales Tax on Business Rents: HB 11 and SB 176 would have reduced the sales tax on commercial rents, another recommendation from Governor Scott, who hoped this was going to be the first step in the future elimination of the tax. Florida is the only state that applies sales tax to commercial rents at an increased cost to businesses of about $1.4 billion per year. HB 11 would phase out the tax by 1 percent each year, resulting in its elimination in 2019. SB 176 contains a one-time 1 percent decrease. A 1 percent decrease would save taxpayers $208.7 million. The Governor recommended a 0.5% cut for FY 2014-15, saving businesses more than $104 million annually. The large price tagged doomed this legislation for this session.
Local Option Sales Taxes: HB 113 and SB 66 would have allowed a voter-approved 0.5 percent sales surtax in Miami-Dade County for the benefit of Miami-Dade College and Florida International University. SB 66 passed the Senate but was not taken up by the House.
Property Taxes - HB 651 and SB 806 would have made changes to the VAB process including allowing a taxpayer to file a joint petition for multiple pieces of tangible personal property if they are similar in nature. SB 806 died in the Appropriations Committee. HB 651 died on 2nd reading.
Property Tax Exemption for Charities - HB 587 and SB 626 would have provided an exemption to charitable organizations for property if it has taken "affirmative steps" to prepare it for charitable activities, such as construction, permitting, architecture drawings, land clearing, etc. A similar exemption now exists for religious property. HB 587 died on the floor and SB 626 died in Appropriations.
Agricultural Sales Tax Exemptions: HB 575 and SB 312 would have expanded the sales tax exemption for agricultural equipment to include the repair of that equipment, and also adds irrigation equipment and trailers used in production or transportation of farm products to the exemption. SB 312 was amended late in the session to remove several of the exemptions. It would now only add irrigation equipment, including parts and repairs. It is estimated this version would save agricultural taxpayers $2.4 annually. SB 312 passed the Senate but was not taken up by the House.
Corporate Filing Fees: The Governor recommended lowering corporate filing fees so that every form of business pays the same amount. He also wants to reduce the late filing penalty, by basing it on the length of the delay. These two recommendations would save taxpayers $33.3 million annually. HB 767 and SB 776 contained a different schedule of reductions, which would save $40.7 million. The legislation has not been heard in any committee. SB 776 died in Appropriations. The House bill died in Finance and Tax.
Veteran Tax Credits: SB 110 provided a $5,000 corporate income tax credit for hiring a veteran and a $10,000 credit for hiring a veteran with a service-connected disability. This bill has cleared two committees. However, the House companion was withdrawn.
Entertainment Industry Financial Incentive Program - SB 1734 would have expanded and made a number of other changes to the tax credit program for film and television productions. The current program is authorized for two more years and offers $43 million in credits annually. The bill would have extended the program for four more years and added $50 million a year for a total of $300 million over the next six years. An amendment required the recipient to obtain a cash match (5%-10%) from the county in which the production is taking place. The bill died in Appropriations. The House had also included a $20 million revolving loan program for television productions in its tax package (HB 5601) but the program fell out during final negotiations.
Tax Credits - HB 155 and SB 596 created a new economic development tax incentive program to encourage businesses receiving national security-related federal contracts to hire more Florida-based subcontractors. HB 155 died on the Calendar.
Local Option Sales Tax - HB 723 and SB 786 would have allowed counties—with voter-approval—to levy a 0.5% sales surtax to fund homeless services and facilities. The bills also added transportation infrastructure maintenance to the approved uses of the local government infrastructure surcharge. SB 786 died in the Transportation Committee. HB 723 died in the Local and Federal Affairs Committee.
Local Option Sales Tax - HB 987 and SB 1102 would have added restoration and maintenance of water bodies to the approved uses of proceeds from the local government infrastructure surcharge. HB 987 died in Finance and Tax. SB 1102 died in Appropriations.
Local Option Sales Tax - SB 706 would add the purchase of school buses to the approved uses of proceeds from the school capital outlay surtax. This was not heard.
HB 371 and SB 884 would have allowed cities to levy a law enforcement special assessment. The city must, in the first year, reduce its property tax millage rate to offset the new assessment. It doesn't have to reduce it more than 75 percent, or 50 percent if approved by 2/3 of the governing body. SB 884 died in Criminal Justice and HB 371 died in Finance and Tax.
Sales Tax on Commercial Utilities: HB 899 and SB 1076 originally contained Agricultural Commissioner Adam Putnam’s proposal to reduce the state sales tax paid by businesses on electricity. The current 7 percent tax would have been cut to 4 percent in 2015, 2 percent in 2016 and then eliminated in 2017. The phase-out would have been accompanied by an increase in the gross receipts tax business pay on utilities-- 1.5 percent in 2015, 2.5 percent in 2016 and 3.5 percent in 2017 and beyond. Neither tax change would have affected residential utility taxes. The result would have been a tax cut for businesses ($220 million) and the change from sales tax to gross receipts tax would also have the effect of shifting funds ($219 million) from general revenue to the Public Education Capital Outlay (PECO) Fund, which is used for educational facilities. The PECO fund is often used to pay debt service on facilities bonds but that fund has seen revenues shrink and has had no bonding capacity in recent years. The odds were stacked against this legislation, since the hit to state general revenue would be substantial ($389 million). Although the tax cut did not get far, the PECO/GR shift is part of the tax cut bill (HB 5601) that passed.
Municipal Property Exemption - HJR 473 and SJR 704 propose a constitutional amendment which would allow the Legislature to exempt any property owned by a municipality. Currently, only land that is exclusively used for municipal or public purpose is exempt. HJR 473 passed one committee.
Renewable Energy Property Tax Exemption - SJR 916 and HJR 825 would have placed a constitutional amendment on the 2014 ballot to extend a property tax exemption to commercial property for solar panels or other renewable energy projects. It would have also limited the tax exemption to "end-users" of the electricity. In 2008, Florida voters approved a constitutional amendment to provide the tax exemption for renewable energy and wind resistance improvements to residential properties. Last year the Legislature passed a bill to implement the amendment but only for renewable energy and not for wind resistance. SJR 916 passed two committees. The House bill was not heard.
Property Taxes - SB 624 and HB 1259 would have exempted fair associations from property taxes, special assessments and impact fees. HB 1259 was not heard and SB 624 died in Finance and Tax.
Calculation of the Sales Tax: HB 1011 and SB 966 would have changed the method for calculating the amount of sales tax due on all purchases. The sales price would be multiplied by the tax rate and rounded down to the nearest cent. These bills were not been heard but SB 966 was referred to the Revenue Impact Estimating Conference which put a recurring $101 million price tag on it.
Sales Tax Exemptions - These bills have not been heard:
Corporate Tax Credits - There are also a number of bills that would create new tax credits (and one that would repeal a credit) that have not been heard in committee yet:
These property tax bills have not been heard in committee:
HB 681 and SB 736 would have created the "Re-Inventing Our Schools Act" to increase the maximum property tax levy school districts can levy for capital outlay from 1.5 to 1.75 mills.
SB 568 directed the Department of Revenue to appoint a presiding magistrate for each county Value Adjustment Board (VAB). The requirement for each VAB to hire a private attorney is repealed. The presiding magistrate will determine if VAB decisions are consistent with law and will also appoint and supervise special magistrates.
HB 389 and SB 842 provided a 25 percent exemption to owners of mobile homes if the home is renting space on a lot and the lot owner passes the taxes on to the home owner.
There were even a couple of tax increase bills were filed, but they were not heard:
Tax Increases - SB 614 would have imposed a tax of 2.6 percent per cigarette on “nonsettling manufacturers” – tobacco companies that are not part of the tobacco settlement. HB 507 would have significantly increased tobacco taxes, including increasing the $1 per pack surcharge for a regular package of cigarettes to $2 per pack.
Here is a look at where this session’s major education legislation stands:
Education Capital Outlay Funding: Florida TaxWatch has long called for a more stable revenue source to fund the Public Education Capital Outlay (PECO) fund which provides money for construction and maintenance of educational facilities. The current source, the gross receipts tax, has not produced sufficient revenue in recent years. The Legislature’s tax cut package (HB 5601) includes a measure to decrease the gross receipts tax on electricity and increase the sales tax on electricity by the same amount. The change provides a small tax decrease ($3 million) for businesses but has the effect of shifting $160 million annually from the General Revenue Fund to PECO.
Educational Choice: After appearing that HB 7167--the House’s attempt to expand the Florida Tax Credit Scholarship program--was not going to pass, a 141 page strike-all amendment was added to SB 850. The amendment expands eligibility from 230 percent to 260 percent of the federal poverty line. First priority will be given to students below 185 percent of the poverty level. The maximum scholarship amount is increased to 82 percent of per student funding. It is currently 72 percent with the ability to rise to 80 percent. The bill also changes how the state measures student performance in the program and requires state audits of the program administrator. The bill also establishes the Florida Personal Learning Scholarship Accounts Program for disabled students to provide the option for parents to better meet the individual educational needs their child.
University Performance Funding: Although legislation to provide a framework for performance funding did not pass (see HB 5105 below), the Legislature did provide $200 million in university performance funding, based on the Board of Governors’ model. Florida TaxWatch supports this effort to incentivize excellence and improvement in areas such as graduation rates and cost per student.
Education Accountability: SB 1642 makes substantial changes to Florida’s public school statewide assessment and accountability system, including revisions to school grading and school improvement rating systems. The bill provides for a 1-year transition period to the new statewide, standardized assessments. During this time, schools will not be penalized for their grades in FY 2014-15. By clarifying definitions and removing extraneous calculation components, the bill ultimately simplifies how school grades are calculated and reported.
Postsecondary Education Tuition & Fees: HB 851 eliminates the automatic annual rate of inflation increases currently authorized for state universities, Florida colleges, and workforce education programs. Only Florida State University and the University of Florida would be able to increase tuition without legislative approval and the maximum increase is reduced from 15 percent to 6 percent. The bills also allows undocumented immigrants in Florida to be eligible for in-state tuition.
Educator Certification: HB 433 changes the way a candidate for educator certification may demonstrate mastery of subject area knowledge. This can be done by passing a Florida-developed subject area examination, a standardized examination specified by rule, or a national or international examination that tests comparable content and relevant standards in verbal, analytical writing, and quantitative reasoning skills. In addition, the bill specifies certain requirements regarding demonstration of mastery of professional preparation and education competence.
Education Technology: HB 5101 requires the Commissioner of Education to develop and implement a 5-year strategic plan for establishing Florida digital classrooms to assist school districts in their efforts to integrate technology in classroom teaching and learning to improve student performance. It establishes a digital classroom allocation for education funding. The bill also requires the development of a statewide Internet-based catalog of distance learning courses, degree programs, and resources offered by postsecondary education institutions. It also requires public schools to provide students in grades K-12 opportunities for learning computer coding and programming.
Education “Train”: In addition to the voucher expansion, a late 141 page amendment to SB 850 added a number of provisions from other education bills. While adding so many provisions to a bill on the last day of session does not promote the integrity of the legislative process, the bill contains some good provisions. The provisions in the final bill include:
· Expands Career and Professional Education (CAPE) and acceleration options;
· Strengthens accountability for elementary school through college;
· Establishes requirements for colleges and school districts to provide a pathway for high school students to earn a full year of college credit while enrolled in high school;
· Provides bonus funding for schools and teachers who directly assist students in attaining new digital skills and industry certifications;
· Requires middle schools to implement an early warning system to identify students in need of additional academic support; and
· Adds provisions to strengthen juvenile justice education.
Maximum Class Size: The original House education budget conforming bill (HB 5101) revised the formula used to calculate a school district's class size categorical allocation reduction when maximum class size requirements are not met. If the Department of Education determined that the number of students assigned to any individual class exceeds the class size maximum, the Department would calculate the school district’s class size categorical allocation reduction at the school average, instead of at the class average. However, the class size provision was removed during conference negotiations. Florida TaxWatch supports efforts to provide local districts flexibility in implementing the class size reduction requirements.
Career Centers & Charter Career Technical Centers: HB 7057 would have promoted better utilization of career centers and charter technical career centers and increases student access to programs that will prepare graduates for current and emergent careers in the following ways:
HB 7057 passed the full House but the Senate companion (SB 1202) died in Appropriations Subcommittee on Education.
Education Fiscal Accountability: HB 875 and SB 1100 would have required the Commissioner of Education to establish a return on investment (ROI) rating system by January 31, 2015, in order to evaluate the extent to which public school and school districts use financial resources in a cost-effective manner to improve student performance. The ROI rating must place the most weight on indicators designed to measure how dollars are being used to facilitate increased student academic performance. The bills created the Schoolhouse Funding Pilot Program for the purpose of giving pilot school principals increased authority over school budgets and human capital decisions and determining whether the increased authority positively impacts the return on investment for the principals’ schools. The House bill made it to the floor but did not get a final vote.
State University System Performance Funding Model: HB 5105 would have provided a framework upon which the Board of Governors can assess the performance and improvement of state universities and distribute performance funds appropriated by the Legislature. The bill died in the House Appropriations Committee. The Legislature did provide $200 million in performance funding for universities.
Financial Literacy Education: SB 212 would have revised the required credits for high school graduation and a standard high school diploma to include one-half credit for instruction in personal financial literacy.
Charter Schools: SB 452, HB 1043 & SB 1124 would have revised the charter school provisions relating to contents of annual report, contents of charter school application & charter, & governing board membership & responsibilities; provides requirements for withdrawal of students, transfer of funds, & posting of performance bond; provides for conflict of interest, investigation of complaints, & audits.
Low Performing Schools: SB 1506 and HB 1205 would have required the Department of Education to establish a pilot program for low performing schools.
Flood Insurance - SB 542 has the intent of encouraging private insurance companies to write more flood insurance in Florida and giving consumers greater flexibility, goals that are supported by Florida TaxWatch. Under this bill, new private companies would have expedited rate reviews. These private policies would be at least as broad as National Flood Insurance Program (NFIP) policies and cover the full replacement cost of a home. The definition of flood is expanded to cover damage due to erosion. The Senate had wanted to allow policies at less than full value, unlike NFIP policies. The House amended the bill to require full replacement cost and the Senate relented.
Reducing Citizens Property Insurance – Florida TaxWatch has supported legislative efforts to “de-populate” Citizens—shifting more policies to the private sector to reduce the potential assessment from a catastrophic storm. This year’s effort – SB 1672 – would bar Citizens from writing multi-peril policies for condominiums near the coast. Some stronger—and more controversial—provisions were removed; allowing surplus line companies to participate in the clearinghouse that markets policies to consumers and shifting part of the assessment for catastrophic storms from coastal policies to personal lines.
Florida Catastrophic Storm Risk Management Center - SB 482 and HB 391 included up to $1 million yearly funding for the Florida Catastrophic Storm Risk Management Center at Florida State University paid from Cat Fund investment income. HB 391 made it to the floor but did not receive a final vote. The Senate bill died in the Appropriations Committee.
Reducing the Cat Fund – Early versions of the above bills (SB 482 and HB 391) would have reduced the size of Florida Cat Fund by $1 billion/year for three years. (From current $17 billion to $14 billion). The bills would have allowed insurers to recoup reinsurance premiums paid by insurers to cover gaps in Cat Fund coverage (between statutory max and claims-paying capacity). Both bills had the Cat Fund language was stripped from them.
Cat Fund Changes - SB 610 would have adjusted the size of Florida Cat Fund to $15 billion and allowed a temporary increase to $17 billion if necessary to stabilize the property insurance market, starting June 2015. The bill also eliminated the cash-build-up factor. SB 228 revise the Cat Fund by reducing the attachment point, similar to an amendment introduced in previous Session. The bill also reduced the “cash build-up factor” and required the Cat Fund Board to negotiate a line of credit. These bills were not heard.
State Incentives for Pro Sports Teams - HB 7095 will establish an application process for the owners of stadiums asking the state to help fund construction or facility upgrades. The process would include a ranking system and repayment with penalty provisions for when a stadium does not produce the sales taxes promised in the applications. The bill would also expand the teams that would qualify for state funding. Currently, MLB, NFL, NHL and NBA teams are eligible for sales-tax dollars for stadium projects. The bill adds Major League Soccer, the North American Soccer League, NASCAR, the Professional Rodeo Cowboys Association, hosts of the Breeders' Cup horse races and minor-league baseball facilities. The bill provides that a limit of $13 million a year would be available, and projects can apply for $1 million to $3 million annually, depending on their size. The rankings would then go before the full Legislature to approve funding. The bill sets aside $7 million to allow the new soccer clubs in Orlando and Miami and the Daytona Speedway to apply earlier -- in the 2014-15 budget year -- because their projects are already underway or could be breaking ground soon. If the state is going to subsidize stadiums, Florida TaxWatch commends the Legislature for creating a competitive evaluation process to do so.
Omnibus Economic Development Bill – HB 7023 contains numerous provisions aimed at promoting economic development. The bill will increase tax credits for companies hiring in rural areas, provide development grants to small cities, and allow companies to continue paying unemployment taxes in quarterly installments. It also requires the development of a space tourism marketing plan. The House had wanted to exempt new developments of less than 6,000 square feet from paying local transportation concurrency or impact fees, but that provision was removed by the Senate late in the process. The Senate amendment also added a two-year extension for some environmental permits.
Florida Microfinance Act – The Senate wanted to create this Act to increase credit access for small businesses and entrepreneurs. The Senate passed SB 1480—but with it languishing in messages—the Senate amended the language on to HB 7023 (see above). It creates a loan program to provide up to $50,000 to small business. The Department of Economic Opportunity (DEO) would competitively award funds to loan administrators who will provide a 1:1 match. The borrower must participate in business training and technical assistance provided by the Florida Small Business Development Network. There would also be a guarantee program that guarantees loans of up to $250,000 made by private lenders. The guarantee cannot exceed 50 percent of the total loan amount. The bill provides $10 million in non-recurring general revenue for the program.
Entertainment Industry Financial Incentive Program – The Legislature again considered expanding and making a number of other changes to the tax credit program for film and television productions. The current program is authorized for two more years and offers $43 million in credits annually. SB 1640 would have extended the program for four more years and added $50 million a year for a total of $300 million over the six years. HB 983 added $200 million a year for a total of $1.2 billion. The Senate would have required the recipient to obtain a cash match (5%-10%) from the county in which the production is taking place.
In addition, the House had included a $20 million revolving loan program for television productions in its tax package (HB 5601), the compromise between the two chambers left it out.
For information on tax bills aimed at economic development see the Taxation section of this Legislative Update.
Public pension reform has been a priority of Florida TaxWatch and our Government Cost Savings Task Force for several years. While some progress has been made, this session appeared to be the year for significant reform, since Speaker Weatherford made it a priority. However, resistance in the Senate ultimately doomed the legislation.
Florida Retirement System Reform - Pension reform legislation was slowly watered down this session and ultimately could still not be passed. SB 1114 and HB 7181 contained good pension reform measures, but the changes are not as sweeping as originally proposed. The Senate originally proposed a new Cash Balance Plan along with the current defined contribution (DC) program, closing the defined benefit (DB) plan to most new employees. The Cash Balance Plan would guarantee a 2% annual rate of return and any returns above 2% would be shared between the employee (75%) and the state (25%). The House also initially proposed closing the DB plan to most new employees and creating a “Hybrid” plan, which would use combined elements of the DB and DC plans. The vesting period for the Hybrid plan would be eight years, but the DC Investment Plan would still be available for employees wanting investing freedoms and shorter vesting.
With substantial legislative opposition to these approaches, pension reform began to appear unlikely this session. Then the House and Senate advanced new proposals that brought the chambers closer together and improved the outlook for reform. SB 1114 and HB 7181 would increase the vesting period to ten years, make the DC plan the default plan, and prohibit Elected Officers and Senior Management classes from participation in the DB plan. These changes would have only effected new employees. The Senate bill also incentivized employees to join the DC plan by reducing their contribution from 3% to 2% if they join the DC plan. Additionally, in a controversial maneuver, HB 7181 combined the FRS component with a municipal pension reform proposal that restructures the applications of Insurance Premium Tax dollar for municipal pension benefits. HB 7181 passed the House but both bills died on the Senate floor.
SB 184 mandated compulsory membership in the Florida Retirement System Investment Plan for employees in the Elected Officers’ Class or the Senior Management Service Class. The bill also prohibited an elected official eligible for membership in the Elected Officers’ Class from enrolling in the Senior Management Service Class or in the Senior Management Service Optional Annuity Program and closed the Senior Management Optional Annuity Program to new members. The bill was withdrawn from further consideration early in the session.
Local Government Pension Reform
Reform of local government pensions also fell short of passage. With many municipal plans operating with large unfunded liabilities and pension costs continuing to increase, local pension reform is another significant topic of discussion this session. There are a host of statutory issues concerning municipal pension funding. One of the most pressing being the way in which municipalities must use insurance premium tax revenue. In 1999, the legislature amended ch. 175 and ch. 185 F.S. providing that any Insurance Premium Tax (IPT) revenue exceeding the amount in 1997 be used only to fund additional or extra benefits for police and fire retirees only. This forces cities to pay for pension plans increasingly out of general revenue and limits the negotiating power cities have with local police and firefighters unions. These restrictions on funding also effectively prohibit the use of IPT revenue to pay down unfunded liabilities, increasing the cost and risk to taxpayers.
SB 246 would have amended the way IPT revenues must be used in police and firefighter pension plans. This bill represented a compromise between the unions and the cities.
The bill provided that the increase in premium tax revenues between 1997 and 2013 must be used to fund benefits that are not included in the minimum benefits. Premium tax revenues in excess of the amount received in 2013 would be split 50/50 between minimum benefits or other benefits in excess of the minimum benefits as determined by the municipality and funding a defined contribution.
For plans created after March 1, 2014, 50 percent of the insurance premium tax revenues must be used to fund defined-benefit plan benefits and the remainder must be used to fund defined-contribution plan benefits.
The bills also allow plans to deviate from these requirements if the benefits are mutually agreed to through collective bargaining.
Late in the session, the House combined this local government pension reform with the state pension reforms explained above in HB 7181. The bill quickly moved to the floor and was passed by the full House. However, this move may have doomed the local reform. Both bills passed their respective chambers, but were not taken up in the other.
Juvenile Justice - HB 7055 is a very good piece of legislation that represents a major overhaul of juvenile justice in Florida. The legislation is supported by Department of Juvenile Justice (DJJ) Secretary Wansley Walters, who said it would make Florida the first state that will actually have prevention as part of the juvenile-justice system. Florida TaxWatch commends the Legislature and DJJ for this legislation that should go a long way towards keeping juvenile offenders from ending up in adult jails and prisons.
All of these bills listed below promote goals supported by the Florida TaxWatch Center for Smart Justice:
Reentry Programs - HB 53 directs the Department of Corrections, working with the Depts. of Health and Highway Safety. To assist inmates in obtaining birth certificates, state IDs and social security cards. Fees would be waived for Florida-born inmates. ID cards upon release from prison. Lack of ID is a major obstacle for ex-offenders transitioning back to society.
Expanding Educational, Vocational and Faith and Character based programs - HB 53 directs DOC to expand its faith- and character-based institutions to serve both male and female inmates at their respective institutions. It also requires peer-to-peer programs, such as Alcoholics Anonymous and literacy instruction, to be offered at faith- and character-based institutions.
Sentencing Reform - SB 360 increases the minimum weight threshold for trafficking in oxycodone and hydrocodone which will reduce the number of persons punished for drug trafficking. The bill increases the threshold for oxycodone from 4 grams to 7 grams and the threshold for hydrocodone from 4 grams to 14 grams. Further, some persons charged with trafficking will receive a shorter mandatory minimum term than under current law. The Criminal Justice Impact Conference has not reviewed the current version, but it estimated that the original SB 360 would result in the need for 465 fewer prison beds and $16.1 million in savings by FY 2018-19. The original bill increased the threshold for both drugs to 14 years.
Juvenile Justice Education – SB 850 revises accountability and delivery of current education programs for youth in residency programs, designed to help juvenile offenders to better integrate back into the community.
Juvenile Sentencing - HB 7035 address sentencing laws for juveniles convicted of murder and other serious crimes, a problem Florida has been trying to fix since 2010 after the U.S. Supreme Court ruled that juveniles in this situation who did not commit homicides must receive parole review. The bill calls for judicial hearings and sentencing standards that would vary depending on the nature of the crimes. The bill requires a life sentence, or 40 years if judge determines life not warranted, for juveniles who murder. For those convicted of felony murder, review will occur after 25 years. Juveniles convicted of a non-homicide offense is entitled to a review hearing after 20 years.
Drug Courts -- SB 280 would exempt initial screenings for participation in Drug Court diversion programs from public record requirements disclosure to assure confidentiality of the defendant. It is anticipated this confidentiality will encourage more people to participate in a treatment-based drug court program. The exemption will eliminate the need for motions, hearings, and orders to protect these records from disclosure.
Passed One Chamber
Prison Diversion - HB 829, HB 7113 and SB 1544 authorized physician assistants and nurses to initiate involuntary mental health exams under the Baker Act. HB 7113 passed the House but the Senate took the provision out. HB 829 died on the Calendar. SB 1544 died in Children, Families and Elder Affairs.
Passed all Committees
Restitution for Juvenile Crime - HB 455 and SB 1040 required juvenile, and parents, to make restitution for damage or loss caused by juvenile’s crime and make both parents responsible regardless of custody issues. HB 455 died is on 2nd reading and SB 1040 died in Criminal Justice.
Expanding Re-entry Programs - SB 1638 required DOC to develop a vocational work-release pilot program in Santa Rosa, Escambia, Walton, and Okaloosa counties. The bill requires that inmates who are within 36 months of their release date be considered for participation in the program based upon a risk assessment. This bill made it to its last committee.
Sentencing Reform - CS/SB 328 allowed a judge to depart from the three year mandatory minimum sentence for trafficking in certain drug possession cases. The bill is limited exclusively to simple possession offenses by first time offenders. It is estimated that the bill would have reduced prison population and saved an estimated $30 million in first five years. This also reflects federal emphasis on rolling back mandatory minimum punishments in nonviolent drug cases, and allowing judicial safety valve (a smart justice recommendation). This bill has cleared one committee.
Not Heard in Committee
Expanding Re-entry Programs - HB 383 and SB 822 would have provided a $1,000 corporate income tax credits for each convicted felon hired by a business. Certain violent and habitual offenders and those subject to registration as a sexual predator or offender are excluded from the tax credit program.
Civil Citations -- HB 95 and SB 210 required issuance of a civil citation in certain instances when a juvenile admits committing misdemeanor.
Juvenile Justice - HB 461 and SB 980 revised age, criteria and offenses for which State Attorneys may direct file charges in adult court. The bills prohibit direct file if first offense unless compelling reasons stated in writing.
Juvenile Justice - HB 795 and SB 778 revised requirements for school resource officers and limits arrest authority and requires law enforcement agency to enter into cooperative agreements with district school board.
Health and Aging
Alzheimer’s Disease - HB 709 will establish a dedicated Alzheimer’s Disease Research Program within the Department of Health to provide grants and other funding for Alzheimer’s research. The bill also requires a performance funding model for memory disorder clinics and requires the Department of Emergency Management to address special needs shelter registration and staffing to care for individuals with Alzheimer’s or dementia during emergencies. The need for this program is highlighted in the Florida TaxWatch Center for Health and Aging Report Florida’s Looming Alzheimer’s Crisis.
Medical Tourism and Telemedicine – Although good legislation to promote these issues fell just short of final passage, the budget contains some funding for both (see below).
Medical Tourism - SB 1150 and HB 1223 aimed to establish Florida as a worldwide destination for medical tourism. Enterprise Florida, in collaboration with Visit Florida, would have been directed to market Florida as a health care destination. The Division of Tourism Marketing would have been required to include the promotion of medical tourism in a four-year marketing plan, which would specifically promote national and international awareness of healthcare specialties and expertise, and showcase key healthcare providers. An annual minimum of $3.5 million would have been appropriated from state general revenue to Florida Tourism Industry Marketing for developing and implementing medical tourism marketing. The bill also created a matching grant program to encourage medical tourism through local and regional economic development organizations and requires medical tourism to be evaluated by OPPAGA as is required of certain other economic development programs. SB 1150 passed the full Senate and HB 1223 died in Appropriations. However, the budget provides $5 million to Visit Florida to develop a medical tourism marketing plan and to provide medical tourism matching grants.
ARNP & PA Scope of Practice - Florida TaxWatch has recommended that advanced registered nurse practitioners (ARNPs) and physician assistants (PAs) be allowed to practice to the full extent of their training. An omnibus health bill (HB 7113)—which had dealt primarily with trauma centers—was amended to add several more provisions, including expanding ARNP scope of practice. It provided for nurse practitioners meeting certain requirements to practice independently, sign off of on Baker Act exams, prescribe controlled substances when requirements are met, and sign death certificates. HB 7113 passed the full House, but the Senate stripped the scope of practice provisions from the bill. Additionally, HB 829, which would authorize ARNPs and PAs to initiate involuntary examinations of individuals believed to have mental illness pursuant to the Baker Act made it to the floor but did not get a final vote.
Telemedicine/Telehealth - HB 7113 also included telehealth provisions; allowing all Florida licensed health care professionals to use telehealth, from any location, to deliver health care services. It allowed out-of-state health care professionals to provide telehealth services to Florida patients if registered with the Department of Health (DOH) or the applicable board. DOH would be required to publish, on its website, a list of all registered out-of-state health care professionals, including specific background information for each. HB 7113 passed the full House, but the Senate stripped the language out. The Senate Telemedicine bill was SB 1646. This bill required that all telemedicine providers must be licensed in Florida unless they are consulting with a Florida-licensed provider who maintains ultimate authority and responsibility for the diagnosis, treatment, and care. It required telemedicine providers to maintain liability coverage in an amount meeting Florida statutory requirements or in the amount required in the out-of-state provider’s licensing jurisdiction, whichever is greater. In addition, Medicaid reimbursement for telemedicine is mandated and AHCA is given the discretion to discontinue reimbursement if a telemedicine service is later determined to not be cost-effective or clinically-effective. AHCA would submit a telemedicine cost and usage savings report to the legislature in by January 1, 2017 and the Medicaid section of the Telemedicine Act would sunset June 30, 2017. SB 1646 died in Appropriations.
Florida TaxWatch has recommended expanding the use of telemedicine in Florida in a March 2014 Report: Critical Connections to Care. In addition, a TaxWatch Center for Health & Aging guide to 2014 telemedicine legislation, including a summary of bill history and an easy-view comparison chart of policy issues across bills is available at 2014 Guide to Telemedicine Legislation.
While telemedicine legislation did not pass, the budget contains $1.75 million for telemedicine projects at three hospitals.
IT Governance – The Legislature finally addressed centralized Information Technology (IT) governance, a recommendation Florida TaxWatch has made for several years, including a report released this session detailing the needs of Florida’s new IT governance structure. HB 7073 will establish an Agency for State Technology and a Chief Information Office (CIO). The bill provides standardized procedures and oversight functions for enterprise IT functions in Florida, outlines management for state data centers, and revises procurement practices and oversight. The new agency will provide oversight for all technology projects exceeding $10 million and review all IT purchases over $250,000. Florida TaxWatch commends the Legislature for passing this important legislation which will help hold down escalating IT costs and problems.
FLAIR - The replacement of the Florida Accounting Information Resource (FLAIR) has also been a recommendation of Florida TaxWatch for several years. Last year, the state funded a feasibility study on the replacement of FLAIR and other components of the Florida Financial Management Information System. The project is estimated to cost $225 million and over seven years to implement. The new budget includes $9 million for FLAIR replacement.
Inspectors General - HB 1385 will require the state's inspectors general to report directly to the state's Chief Inspector General rather than their individual agency heads, ensuring they are truly independent from the agencies they serve. This change will allow our inspectors general to more effectively investigate and protect the use of taxpayer dollars by our state government. In 1983, Florida TaxWatch first recognized the need for independent review of state agency activities and called for the Office of the Inspector General to be established, and we were pleased that the Legislature adopted that recommendation. Since 2010, Florida TaxWatch research has called for greater independence of inspectors general and we applaud the Legislature for again making increased government accountability a priority by passing this important reform.
Reducing Medicaid Fraud – SB 308 gives public assistance fraud investigators the power to issue subpoenas and to administer oaths. Also HB 515 will create new first and second degree felony offenses relating to public assistance fraud and allow a monetary reward for persons providing information on fraud. Florida TaxWatch’s Center for Government Efficiency has made several recommendation to reduce Medicaid fraud.
Procurement Reforms – HB 953 would take into consideration the prior relevant experience of a vendor during the procurement process. Florida TaxWatch has been making recommendations to reform the procurement process by incorporating best practices and creating a governance structure with authority for procurement. This bill is a common practice in most states, and is a step in the right direction for Florida.
Reducing Corrections Costs – A number of bills aimed at reducing recidivism and increasing diversion passed this session. These include bills to aid inmate re-entry (HB 53), expand educational, vocational and faith and character based programs (HB 53), improve juvenile justice education (SB 850) and prevention programs (HB 7055), and promote drug court diversion programs (SB 280). These bills all support recommendations made by both the Center for Smart Justice and the Center for Government Efficiency.
Special District Accountability – SB 1632 creates a process to allow the state to enforce reporting and other requirements when special districts fall out of compliance with their obligations or become inactive. The bill also requires special districts to have web sites and provides for the state code of ethics to apply special districts. For years, Florida TaxWatch has called for increased accountability for special districts. We commend the Legislature for this bill and agree with the sentiment voiced by several senators during floor debate that more work needs to be done and the issue of special districts needs to be reviewed again next session.
Pension Reform – This session, Florida TaxWatch supported a number of bills to reform both state and local government pension plans. Strong state pension reform legislation--HB 1114 and HB 7181--was slowly watered down and ultimately could still not be passed. The Senate originally proposed closing the defined benefit (DB) plan to most new employees and creating a Cash Balance Plan that would guarantee a 2% annual rate of return. Any returns above 2% would be shared between the employee (75%) and the state (25%). The House also initially proposed closing the DB plan to most new employees and creating a “Hybrid” plan, which would use combined elements of the DB and DC plans.
With substantial legislative opposition to these approaches, the House and Senate advanced new proposals that brought the chambers closer together and improved the outlook for reform. SB 1114 and HB 7181 would have increased the vesting period to ten years, made the DC plan the default plan, and prohibited Elected Officers and Senior Management classes from participation in the DB plan. These changes would have only effected new employees. The Senate bill also incentivized employees to join the DC plan by reducing their contribution from 3% to 2%. HB 7181 passed the House but both bills died on the Senate floor.
Local pension reform likely died when the House used HB 7181 to combine the state FRS component with a municipal pension reform proposal that restructures the applications of Insurance Premium Tax dollar for municipal pension benefits. The Senate passed SB 246 containing the local reform, but it was not taken up by the House,
Collection of Sales Taxes on Remote Sales: Florida TaxWatch has been researching this issue and recommending solutions for more than 10 years. Once again, the Legislature failed to address this. (see Taxation section for more info.)
The Florida Retirement System (FRS) provides retirement benefits to the public employees of Florida. The current FRS is managed by the State Board of Administration and offers both a Defined Benefit (DB) Pension plan and a Defined Contribution (DC) Investment plan for employees to choose between. The escalation of unfunded liabilities and pension abuses within DB plans has spurred reform efforts and debate in many states, particularly Florida.
The Florida Senate’s pension reform initiative in the 2014 Session (SB 7046) proposes offering a Cash Balance (CB) plan and a DC plan to public employees. This would close the DB plan to new hires as of July 1, 2015, except for special risk class employees. The CB plan is a new proposal in the pension debate in Florida, and only five other states currently utilize this type of plan.
CB plans are hybrid retirement plans that combine aspects of DB and DC plans to provide post-employment benefits to employees. The US Department of Labor defines CB plans as “a defined benefit plan that defines the benefit in terms that are more characteristic of a defined contribution plan.”
There are several characteristics that distinguish CB plans from other traditional retirement options. An analysis of SB 7046 by the Senate Community Affairs Committee explains these characteristics: “Cash Balance plans typically:
The funding mechanism for a CB plan is similar to a DC plan, in that specified contributions are made to an individual employee’s account. However, all assets within the plan are housed in an aggregated investment pool and invested collectively by the plan management, so individual employee accounts are simply “notional” or hypothetical accounting organization. This creates predictable plan costs and allows for professional investment management of plan assets.
CB plans also offer a guaranteed minimum investment return, and dividend payments on returns that exceed the minimum. This serves as a floor that employee benefits cannot fall below and provides them with retirement security. SB 7046 proposes a guaranteed two percent minimum annual investment return for all employee benefits, with 75 percent of the remaining investment earnings attributed to individual employee accounts as a dividend and 25 percent saved by the plan for years that fall short of the minimum guarantee.
Another distinction of a CB plan is the asset allocation strategy. Once an employee decides to retire, they have an option to take a lump sum, roll-over benefits into another plan, annuitize the accrued benefits, or combination. This provides options for an employee to receive their retirement benefit in various methods that are similar to the options provided within DB and DC plans. However, the lump-sum payout option will force the plan’s investment management to hold more assets in low-risk, liquid asset, and inhibit the plans ability to earn the highest potential return-on-investment.
The distribution of risk is another important consideration in the pension reform debate, and there are several different types of risk exposure. Since benefits are individualized in notional accounts, employees will have a set amount of funds for retirement. This places longevity risk, or the risk of an employee outliving their benefits, on the employee. The annuity option attempts to mitigate this risk; however, the annuity benefit is on average half of that offered by the traditional DB plan.
The aggregated investment pool, and the minimum earnings guarantee, places investment risk solely on the employer (i.e. taxpayers). The CB plan can thus accumulate unfunded liability if investment returns fall below the two percent threshold and the plan savings cannot cover the deficit. The excessive accumulation of unfunded liability, as seen by several states and many municipalities, leads to increased risk of financial default.
There are many considerations and stakeholder perspectives to keep in mind when determining the best options for pension reforms in Florida. It is important to evaluate all the options available, and Cash Balance is one of several.
The Center for Government Efficiency (CGE) is the extension of the Florida TaxWatch Government Cost Saving Task Force, and published its cost saving report in November, Modern Management & Sensible Savings. The TaxWatch cost savers cover many facets of Florida government and have the potential to save over $1 billion for taxpayers. For more information on the specific issue areas and their progress through the 2014 Legislative session, see the links on the left.
The replacement of the Florida Accounting Information Resource (FLAIR) has been a recommendation of Florida TaxWatch for many years and has been recognized by the Legislature.
Last year, the state budget included a $1.75 million appropriation for a feasibility study on the replacement of FLAIR and other components of the Florida Financial Management Information System. The study was submitted to the CFO on February 28, and is scheduled to be released March 21.
IT governance is an issue that the Legislature has addressed for several years unsuccessfully, and the 2014 Session has already shown significant progress. Both the Florida House of Representatives and Senate have proposed bills that would establish a CIO, an Agency for State Technology, and provide standardized procedures and oversight functions for enterprise IT functions in Florida. Florida TaxWatch has made this recommendation for many years, and recently released a report detailing the needs of Florida’s new IT governance structure.
The House and Senate bills differ somewhat, but the general tone and language between the bills are similar, which is an encouraging sign of coordinated efforts between the Chambers and suggests a successful outlook for 2014.
HB 7073 and HB 7024 are both IT governance bills that were filed by the House Appropriations Committee. The two bills establish an Agency for State Technology, manage state data centers, and revise procurement practices and oversight. HB 7073 was filed more recently, on the last day of February, and is likely the revised version of what will be the House proposal.
SB 928 is the Senate’s proposal for the IT governance overhaul, which has passed the Committee on Governmental Oversight and Accountability and is scheduled for the Appropriations Subcommittee on General Government on March 5.
Reforming the Florida Retirement System (FRS) remains a priority of House Speaker Will Weatherford this year; however, Senate President Don Gaetz has indicated his chamber is divided on an overhaul of the state pension plan and he expects a close vote on any pension reform measure.
SB 1114 establishes a Cash Balance Plan as part of the Florida Retirement System. Under the bill, new employees hired after July 1, 2015 would choose either the new Cash Balance Plan or the defined contribution style Investment Plan but would not be given a “defined benefit plan” option; however, Special Risk Class employees (generally public safety workers) would be provided a “defined benefit plan” option in addition to the other two options. Current employees would not be affected (i.e., could remain in the “defined benefit plan”) but could chose to transfer into the Cash Balance Plan.
The Cash Balance Plan would be funded by employee and employer contributions based on a percentage of the employee’s salary and would guarantee a 2% annual rate of return for the account balance. Any additional returns above the 2% would be shared between the employee (75%) and the state (25%), with the state’s portion of additional returns put into a trust fund that would be used to fund any deficit years. Upon retirement, the employee can either roll the funds into a state run annuity, take the lump sum payout, or a combination of the two.
This bill was originally SPB 7046 and was submitted as SB 1114 in January by Community Affairs after being narrowly approved by a 5-4 vote.
The House has yet to unveil its FRS reform bill this year, after passing a bill last year requiring all new employees to enroll in the defined contribution style Investment Plan. Speaker Weatherford recently said the House was considering both the “cash balance” system and a “hybrid” plan that would combine elements of a traditional pension and an investment plan.
Learn more about the TaxWatch Take on Pensions here.
Expanding Diversion Programs
HB 109 and SB 280 would exempt initial screenings for participation in Drug Court Diversion programs from public record requirements disclosure to to assure confidentiality of the defendant. The Senate bill has passed the Judiciary Committee by a 9-0 vote.
HB 829 authorizes physician assistants and nurses to initiate involuntary mental health exams under the Baker Act.
CS/HB 99 and SB 360 would remove criminal sanctions for those possessing 4-14 grams of hydrocodone and oxycodone, and reduce minimum mandatory sentences for those possessing greater quantities. Both have moved quickly through the committee process. The Senate bill has already cleared all its committees of reference and the House bill will be considered by its last committee the first week of session.
Expanding Educational, Vocational and Faith and Character based programs
Department of Corrections (DOC) Budget—The Governor’s recommended budget provides $132M total additional funds for DOC with increased emphasis on education and vocation training, $7.2M for substance abuse rehab, $8M for electronic monitoring programs, $17.3M for 2 reentry centers and 3 new construction work camps, $800,000 for ID cards for felons.
HB 43, HB 53 and SB 274 are focused on Reentry ID cards as explained below but also have provisions to authorize DOC to operate male and female faith & character based prisons.
Expanding Reentry Programs
HB 43, HB 53, and SB 274 would waive fees for inmate ID cards upon release from prison. HB 43 also includes provisions which direct DOC to establish a Reentry program for nonviolent offenders, and authorizes use of post-adjudicatory drug court. HB 53 and SB 274 are both in their last committee of reference. HB 43 has not been heard.
HB 383 and SB 822 Would provides a $1,000 corporate income tax credits for each convicted felon hired by a businesses Certain violent and habitual offenders and those subject to registration as a sexual predator or offender are excluded from the tax credit program. These bills have yet to be heard in committee.
Collection of Sales Taxes on Remote Sales: The most significant tax compliance and collection issue facing Florida and other states is the collection of sales and use taxes on sales by remote vendors. Remote vendors are those without a physical presence—or nexus—in a state. These transactions can be performed by telephone, mail and over the Internet. The courts have ruled that a retailer must have a physical presence in a state for that state to require it to collect sales and use taxes from in-state purchasers, although the tax is still legally owed to the state by the purchaser. This ruling not only erodes Florida’s tax base, but also puts “bricks-and-mortar” retailers at a competitive disadvantage, as they are required to charge the sales tax to consumers. Florida TaxWatch has been researching this issue and recommending solutions for more than 10 years.
HB 217, HB 857 and SB 818 would bring Florida fully into the Streamlined Sales and Use Tax Agreement, which provides an opportunity for Florida to begin collecting money from a compact of sellers that voluntarily collect the tax and remit to SSUTA states.
SB 202 would assert nexus over remote retailers that are related to in-state companies, such as an out-of-state retailer that holds a substantial interest in an in-state retailer. Further, “click through” provisions assert nexus exists if an out-of-state internet retailer pays an in-state agent for advertising or referring customers from their website. Similar legislation has been passed by the Senate in the past.
SM 196 is a memorial urging Congress to pass the Marketplace Fairness Act which would allow states in compliance with SSUTA to require remote sellers to collect and remit sales taxes. This is the only remote sales legislation that has been heard in committee.