Bill Text: FL S0916 | 2018 | Regular Session | Introduced
Bill Title: Ad Valorem Taxation
Spectrum: Partisan Bill (Republican 1-0)
Status: (Failed) 2018-03-10 - Died in Community Affairs [S0916 Detail]
Download: Florida-2018-S0916-Introduced.html
Florida Senate - 2018 SB 916
By Senator Grimsley
26-00513A-18 2018916__
1 A bill to be entitled
2 An act relating to ad valorem taxation; amending s.
3 192.001, F.S.; defining the terms “heavy equipment
4 rental property,” “dealer of heavy equipment rental
5 property,” and “short-term rental,” and redefining the
6 term “inventory,” for purposes of provisions relating
7 to the imposition of ad valorem taxes; amending ss.
8 112.312, 192.042, 212.08, 220.03, and 624.5105, F.S.;
9 conforming cross-references; providing an effective
10 date.
11
12 Be It Enacted by the Legislature of the State of Florida:
13
14 Section 1. Present subsections (8) through (19) of section
15 192.001, Florida Statutes, are redesignated as subsections (9)
16 through (20), respectively, a new subsection (8) is added to
17 that section, and paragraph (c) of present subsection (11) of
18 that section is amended, to read:
19 192.001 Definitions.—All definitions set out in chapters 1
20 and 200 that are applicable to this chapter are included herein.
21 In addition, the following definitions shall apply in the
22 imposition of ad valorem taxes:
23 (8) “Heavy equipment rental property” means any
24 construction, earthmoving, or industrial equipment that is
25 mobile and rented by a dealer of heavy equipment rental
26 property, including attachments for the equipment or other
27 ancillary equipment or tools. Qualified heavy equipment property
28 is mobile if it is not permanently affixed to real property and
29 is moved among worksites. For the purposes of this chapter and
30 chapter 196, the term “dealer of heavy equipment rental
31 property” means a person or entity principally engaged in the
32 business of short-term rental of property as described under
33 North American Industrial Classification System code 532412, as
34 published by the Office of Management and Budget, Executive
35 Office of the President. As used in this subsection, the term
36 “short-term rental” means the rental of a dealer’s heavy
37 equipment rental property for a period of less than 1 year, for
38 an undefined period, or under a contract with unlimited terms.
39 (12)(11) “Personal property,” for the purposes of ad
40 valorem taxation, shall be divided into four categories as
41 follows:
42 (c)1. “Inventory” means only those chattels consisting of
43 items commonly referred to as goods, wares, and merchandise (as
44 well as inventory) which are held for sale or lease to customers
45 in the ordinary course of business. Supplies and raw materials
46 shall be considered to be inventory only to the extent that they
47 are acquired for sale or lease to customers in the ordinary
48 course of business or will physically become a part of
49 merchandise intended for sale or lease to customers in the
50 ordinary course of business. Partially finished products which
51 when completed will be held for sale or lease to customers in
52 the ordinary course of business shall be deemed items of
53 inventory. All livestock and heavy equipment rental property
54 shall be considered inventory. Items of inventory held for lease
55 to customers in the ordinary course of business, rather than for
56 sale, shall be deemed inventory only prior to the initial lease
57 of such items. For the purposes of this section, fuels used in
58 the production of electricity shall be considered inventory.
59 2. “Inventory” also means construction and agricultural
60 equipment weighing 1,000 pounds or more that is returned to a
61 dealership under a rent-to-purchase option and held for sale to
62 customers in the ordinary course of business. This subparagraph
63 may not be considered in determining whether property that is
64 not construction and agricultural equipment weighing 1,000
65 pounds or more that is returned under a rent-to-purchase option
66 is inventory under subparagraph 1.
67 Section 2. Paragraph (c) of subsection (12) of section
68 112.312, Florida Statutes, is amended to read:
69 112.312 Definitions.—As used in this part and for purposes
70 of the provisions of s. 8, Art. II of the State Constitution,
71 unless the context otherwise requires:
72 (12)
73 (c) For the purposes of paragraph (a), “intangible personal
74 property” means property as defined in s. 192.001(12)(b) s.
75 192.001(11)(b).
76 Section 3. Subsection (2) of section 192.042, Florida
77 Statutes, is amended to read:
78 192.042 Date of assessment.—All property shall be assessed
79 according to its just value as follows:
80 (2) Tangible personal property, on January 1, except
81 construction work in progress shall have no value placed thereon
82 until substantially completed as defined in s. 192.001(12)(d) s.
83 192.001(11)(d).
84 Section 4. Paragraphs (g) and (p) of subsection (5) of
85 section 212.08, Florida Statutes, are amended to read:
86 212.08 Sales, rental, use, consumption, distribution, and
87 storage tax; specified exemptions.—The sale at retail, the
88 rental, the use, the consumption, the distribution, and the
89 storage to be used or consumed in this state of the following
90 are hereby specifically exempt from the tax imposed by this
91 chapter.
92 (5) EXEMPTIONS; ACCOUNT OF USE.—
93 (g) Building materials used in the rehabilitation of real
94 property located in an enterprise zone.—
95 1. Building materials used in the rehabilitation of real
96 property located in an enterprise zone are exempt from the tax
97 imposed by this chapter upon an affirmative showing to the
98 satisfaction of the department that the items have been used for
99 the rehabilitation of real property located in an enterprise
100 zone. Except as provided in subparagraph 2., this exemption
101 inures to the owner, lessee, or lessor at the time the real
102 property is rehabilitated, but only through a refund of
103 previously paid taxes. To receive a refund pursuant to this
104 paragraph, the owner, lessee, or lessor of the rehabilitated
105 real property must file an application under oath with the
106 governing body or enterprise zone development agency having
107 jurisdiction over the enterprise zone where the business is
108 located, as applicable. A single application for a refund may be
109 submitted for multiple, contiguous parcels that were part of a
110 single parcel that was divided as part of the rehabilitation of
111 the property. All other requirements of this paragraph apply to
112 each parcel on an individual basis. The application must
113 include:
114 a. The name and address of the person claiming the refund.
115 b. An address and assessment roll parcel number of the
116 rehabilitated real property for which a refund of previously
117 paid taxes is being sought.
118 c. A description of the improvements made to accomplish the
119 rehabilitation of the real property.
120 d. A copy of a valid building permit issued by the county
121 or municipal building department for the rehabilitation of the
122 real property.
123 e. A sworn statement, under penalty of perjury, from the
124 general contractor licensed in this state with whom the
125 applicant contracted to make the improvements necessary to
126 rehabilitate the real property, which lists the building
127 materials used to rehabilitate the real property, the actual
128 cost of the building materials, and the amount of sales tax paid
129 in this state on the building materials. If a general contractor
130 was not used, the applicant, not a general contractor, shall
131 make the sworn statement required by this sub-subparagraph.
132 Copies of the invoices that evidence the purchase of the
133 building materials used in the rehabilitation and the payment of
134 sales tax on the building materials must be attached to the
135 sworn statement provided by the general contractor or by the
136 applicant. Unless the actual cost of building materials used in
137 the rehabilitation of real property and the payment of sales
138 taxes is documented by a general contractor or by the applicant
139 in this manner, the cost of the building materials is deemed to
140 be an amount equal to 40 percent of the increase in assessed
141 value for ad valorem tax purposes.
142 f. The identifying number assigned pursuant to s. 290.0065
143 to the enterprise zone in which the rehabilitated real property
144 is located.
145 g. A certification by the local building code inspector
146 that the improvements necessary to rehabilitate the real
147 property are substantially completed.
148 h. A statement of whether the business is a small business
149 as defined by s. 288.703.
150 i. If applicable, the name and address of each permanent
151 employee of the business, including, for each employee who is a
152 resident of an enterprise zone, the identifying number assigned
153 pursuant to s. 290.0065 to the enterprise zone in which the
154 employee resides.
155 2. This exemption inures to a municipality, county, other
156 governmental unit or agency, or nonprofit community-based
157 organization through a refund of previously paid taxes if the
158 building materials used in the rehabilitation are paid for from
159 the funds of a community development block grant, State Housing
160 Initiatives Partnership Program, or similar grant or loan
161 program. To receive a refund, a municipality, county, other
162 governmental unit or agency, or nonprofit community-based
163 organization must file an application that includes the same
164 information required in subparagraph 1. In addition, the
165 application must include a sworn statement signed by the chief
166 executive officer of the municipality, county, other
167 governmental unit or agency, or nonprofit community-based
168 organization seeking a refund which states that the building
169 materials for which a refund is sought were funded by a
170 community development block grant, State Housing Initiatives
171 Partnership Program, or similar grant or loan program.
172 3. Within 10 working days after receipt of an application,
173 the governing body or enterprise zone development agency shall
174 review the application to determine if it contains all the
175 information required by subparagraph 1. or subparagraph 2. and
176 meets the criteria set out in this paragraph. The governing body
177 or agency shall certify all applications that contain the
178 required information and are eligible to receive a refund. If
179 applicable, the governing body or agency shall also certify if
180 20 percent of the employees of the business are residents of an
181 enterprise zone, excluding temporary and part-time employees.
182 The certification must be in writing, and a copy of the
183 certification shall be transmitted to the executive director of
184 the department. The applicant is responsible for forwarding a
185 certified application to the department within the time
186 specified in subparagraph 4.
187 4. An application for a refund must be submitted to the
188 department within 6 months after the rehabilitation of the
189 property is deemed to be substantially completed by the local
190 building code inspector or by November 1 after the rehabilitated
191 property is first subject to assessment.
192 5. Only one exemption through a refund of previously paid
193 taxes for the rehabilitation of real property is permitted for
194 any single parcel of property unless there is a change in
195 ownership, a new lessor, or a new lessee of the real property. A
196 refund may not be granted unless the amount to be refunded
197 exceeds $500. A refund may not exceed the lesser of 97 percent
198 of the Florida sales or use tax paid on the cost of the building
199 materials used in the rehabilitation of the real property as
200 determined pursuant to sub-subparagraph 1.e. or $5,000, or, if
201 at least 20 percent of the employees of the business are
202 residents of an enterprise zone, excluding temporary and part
203 time employees, the amount of refund may not exceed the lesser
204 of 97 percent of the sales tax paid on the cost of the building
205 materials or $10,000. A refund shall be made within 30 days
206 after formal approval by the department of the application for
207 the refund.
208 6. The department shall adopt rules governing the manner
209 and form of refund applications and may establish guidelines as
210 to the requisites for an affirmative showing of qualification
211 for exemption under this paragraph.
212 7. The department shall deduct an amount equal to 10
213 percent of each refund granted under this paragraph from the
214 amount transferred into the Local Government Half-cent Sales Tax
215 Clearing Trust Fund pursuant to s. 212.20 for the county area in
216 which the rehabilitated real property is located and shall
217 transfer that amount to the General Revenue Fund.
218 8. For the purposes of the exemption provided in this
219 paragraph, the term:
220 a. “Building materials” means tangible personal property
221 that becomes a component part of improvements to real property.
222 b. “Real property” has the same meaning as provided in s.
223 192.001 s. 192.001(12), except that the term does not include a
224 condominium parcel or condominium property as defined in s.
225 718.103.
226 c. “Rehabilitation of real property” means the
227 reconstruction, renovation, restoration, rehabilitation,
228 construction, or expansion of improvements to real property.
229 d. “Substantially completed” has the same meaning as
230 provided in s. 192.042(1).
231 9. This paragraph expires on the date specified in s.
232 290.016 for the expiration of the Florida Enterprise Zone Act.
233 (p) Community contribution tax credit for donations.—
234 1. Authorization.—Persons who are registered with the
235 department under s. 212.18 to collect or remit sales or use tax
236 and who make donations to eligible sponsors are eligible for tax
237 credits against their state sales and use tax liabilities as
238 provided in this paragraph:
239 a. The credit shall be computed as 50 percent of the
240 person’s approved annual community contribution.
241 b. The credit shall be granted as a refund against state
242 sales and use taxes reported on returns and remitted in the 12
243 months preceding the date of application to the department for
244 the credit as required in sub-subparagraph 3.c. If the annual
245 credit is not fully used through such refund because of
246 insufficient tax payments during the applicable 12-month period,
247 the unused amount may be included in an application for a refund
248 made pursuant to sub-subparagraph 3.c. in subsequent years
249 against the total tax payments made for such year. Carryover
250 credits may be applied for a 3-year period without regard to any
251 time limitation that would otherwise apply under s. 215.26.
252 c. A person may not receive more than $200,000 in annual
253 tax credits for all approved community contributions made in any
254 one year.
255 d. All proposals for the granting of the tax credit require
256 the prior approval of the Department of Economic Opportunity.
257 e. The total amount of tax credits which may be granted for
258 all programs approved under this paragraph, s. 220.183, and s.
259 624.5105 is $21.4 million in the 2017-2018 fiscal year and $10.5
260 million in each fiscal year thereafter for projects that provide
261 housing opportunities for persons with special needs or
262 homeownership opportunities for low-income households or very
263 low-income households and $3.5 million each fiscal year for all
264 other projects. As used in this paragraph, the term “person with
265 special needs” has the same meaning as in s. 420.0004 and the
266 terms “low-income person,” “low-income household,” “very-low
267 income person,” and “very-low-income household” have the same
268 meanings as in s. 420.9071.
269 f. A person who is eligible to receive the credit provided
270 in this paragraph, s. 220.183, or s. 624.5105 may receive the
271 credit only under one section of the person’s choice.
272 2. Eligibility requirements.—
273 a. A community contribution by a person must be in the
274 following form:
275 (I) Cash or other liquid assets;
276 (II) Real property, including 100 percent ownership of a
277 real property holding company;
278 (III) Goods or inventory; or
279 (IV) Other physical resources identified by the Department
280 of Economic Opportunity.
281
282 For purposes of this sub-subparagraph, the term “real property
283 holding company” means a Florida entity, such as a Florida
284 limited liability company, that is wholly owned by the person;
285 is the sole owner of real property, as defined in s. 192.001 s.
286 192.001(12), located in the state; is disregarded as an entity
287 for federal income tax purposes pursuant to 26 C.F.R. s.
288 301.7701-3(b)(1)(ii); and at the time of contribution to an
289 eligible sponsor, has no material assets other than the real
290 property and any other property that qualifies as a community
291 contribution.
292 b. All community contributions must be reserved exclusively
293 for use in a project. As used in this sub-subparagraph, the term
294 “project” means activity undertaken by an eligible sponsor which
295 is designed to construct, improve, or substantially rehabilitate
296 housing that is affordable to low-income households or very-low
297 income households; designed to provide housing opportunities for
298 persons with special needs; designed to provide commercial,
299 industrial, or public resources and facilities; or designed to
300 improve entrepreneurial and job-development opportunities for
301 low-income persons. A project may be the investment necessary to
302 increase access to high-speed broadband capability in a rural
303 community that had an enterprise zone designated pursuant to
304 chapter 290 as of May 1, 2015, including projects that result in
305 improvements to communications assets that are owned by a
306 business. A project may include the provision of museum
307 educational programs and materials that are directly related to
308 a project approved between January 1, 1996, and December 31,
309 1999, and located in an area which was in an enterprise zone
310 designated pursuant to s. 290.0065 as of May 1, 2015. This
311 paragraph does not preclude projects that propose to construct
312 or rehabilitate housing for low-income households or very-low
313 income households on scattered sites or housing opportunities
314 for persons with special needs. With respect to housing,
315 contributions may be used to pay the following eligible special
316 needs, low-income, and very-low-income housing-related
317 activities:
318 (I) Project development impact and management fees for
319 special needs, low-income, or very-low-income housing projects;
320 (II) Down payment and closing costs for persons with
321 special needs, low-income persons, and very-low-income persons;
322 (III) Administrative costs, including housing counseling
323 and marketing fees, not to exceed 10 percent of the community
324 contribution, directly related to special needs, low-income, or
325 very-low-income projects; and
326 (IV) Removal of liens recorded against residential property
327 by municipal, county, or special district local governments if
328 satisfaction of the lien is a necessary precedent to the
329 transfer of the property to a low-income person or very-low
330 income person for the purpose of promoting home ownership.
331 Contributions for lien removal must be received from a
332 nonrelated third party.
333 c. The project must be undertaken by an “eligible sponsor,”
334 which includes:
335 (I) A community action program;
336 (II) A nonprofit community-based development organization
337 whose mission is the provision of housing for persons with
338 specials needs, low-income households, or very-low-income
339 households or increasing entrepreneurial and job-development
340 opportunities for low-income persons;
341 (III) A neighborhood housing services corporation;
342 (IV) A local housing authority created under chapter 421;
343 (V) A community redevelopment agency created under s.
344 163.356;
345 (VI) A historic preservation district agency or
346 organization;
347 (VII) A local workforce development board;
348 (VIII) A direct-support organization as provided in s.
349 1009.983;
350 (IX) An enterprise zone development agency created under s.
351 290.0056;
352 (X) A community-based organization incorporated under
353 chapter 617 which is recognized as educational, charitable, or
354 scientific pursuant to s. 501(c)(3) of the Internal Revenue Code
355 and whose bylaws and articles of incorporation include
356 affordable housing, economic development, or community
357 development as the primary mission of the corporation;
358 (XI) Units of local government;
359 (XII) Units of state government; or
360 (XIII) Any other agency that the Department of Economic
361 Opportunity designates by rule.
362
363 A contributing person may not have a financial interest in the
364 eligible sponsor.
365 d. The project must be located in an area which was in an
366 enterprise zone designated pursuant to chapter 290 as of May 1,
367 2015, or a Front Porch Florida Community, unless the project
368 increases access to high-speed broadband capability in a rural
369 community that had an enterprise zone designated pursuant to
370 chapter 290 as of May 1, 2015, but is physically located outside
371 the designated rural zone boundaries. Any project designed to
372 construct or rehabilitate housing for low-income households or
373 very-low-income households or housing opportunities for persons
374 with special needs is exempt from the area requirement of this
375 sub-subparagraph.
376 e.(I) If, during the first 10 business days of the state
377 fiscal year, eligible tax credit applications for projects that
378 provide housing opportunities for persons with special needs or
379 homeownership opportunities for low-income households or very
380 low-income households are received for less than the annual tax
381 credits available for those projects, the Department of Economic
382 Opportunity shall grant tax credits for those applications and
383 grant remaining tax credits on a first-come, first-served basis
384 for subsequent eligible applications received before the end of
385 the state fiscal year. If, during the first 10 business days of
386 the state fiscal year, eligible tax credit applications for
387 projects that provide housing opportunities for persons with
388 special needs or homeownership opportunities for low-income
389 households or very-low-income households are received for more
390 than the annual tax credits available for those projects, the
391 Department of Economic Opportunity shall grant the tax credits
392 for those applications as follows:
393 (A) If tax credit applications submitted for approved
394 projects of an eligible sponsor do not exceed $200,000 in total,
395 the credits shall be granted in full if the tax credit
396 applications are approved.
397 (B) If tax credit applications submitted for approved
398 projects of an eligible sponsor exceed $200,000 in total, the
399 amount of tax credits granted pursuant to sub-sub-sub
400 subparagraph (A) shall be subtracted from the amount of
401 available tax credits, and the remaining credits shall be
402 granted to each approved tax credit application on a pro rata
403 basis.
404 (II) If, during the first 10 business days of the state
405 fiscal year, eligible tax credit applications for projects other
406 than those that provide housing opportunities for persons with
407 special needs or homeownership opportunities for low-income
408 households or very-low-income households are received for less
409 than the annual tax credits available for those projects, the
410 Department of Economic Opportunity shall grant tax credits for
411 those applications and shall grant remaining tax credits on a
412 first-come, first-served basis for subsequent eligible
413 applications received before the end of the state fiscal year.
414 If, during the first 10 business days of the state fiscal year,
415 eligible tax credit applications for projects other than those
416 that provide housing opportunities for persons with special
417 needs or homeownership opportunities for low-income households
418 or very-low-income households are received for more than the
419 annual tax credits available for those projects, the Department
420 of Economic Opportunity shall grant the tax credits for those
421 applications on a pro rata basis.
422 3. Application requirements.—
423 a. An eligible sponsor seeking to participate in this
424 program must submit a proposal to the Department of Economic
425 Opportunity which sets forth the name of the sponsor, a
426 description of the project, and the area in which the project is
427 located, together with such supporting information as is
428 prescribed by rule. The proposal must also contain a resolution
429 from the local governmental unit in which the project is located
430 certifying that the project is consistent with local plans and
431 regulations.
432 b. A person seeking to participate in this program must
433 submit an application for tax credit to the Department of
434 Economic Opportunity which sets forth the name of the sponsor, a
435 description of the project, and the type, value, and purpose of
436 the contribution. The sponsor shall verify, in writing, the
437 terms of the application and indicate its receipt of the
438 contribution, and such verification must accompany the
439 application for tax credit. The person must submit a separate
440 tax credit application to the Department of Economic Opportunity
441 for each individual contribution that it makes to each
442 individual project.
443 c. A person who has received notification from the
444 Department of Economic Opportunity that a tax credit has been
445 approved must apply to the department to receive the refund.
446 Application must be made on the form prescribed for claiming
447 refunds of sales and use taxes and be accompanied by a copy of
448 the notification. A person may submit only one application for
449 refund to the department within a 12-month period.
450 4. Administration.—
451 a. The Department of Economic Opportunity may adopt rules
452 necessary to administer this paragraph, including rules for the
453 approval or disapproval of proposals by a person.
454 b. The decision of the Department of Economic Opportunity
455 must be in writing, and, if approved, the notification shall
456 state the maximum credit allowable to the person. Upon approval,
457 the Department of Economic Opportunity shall transmit a copy of
458 the decision to the department.
459 c. The Department of Economic Opportunity shall
460 periodically monitor all projects in a manner consistent with
461 available resources to ensure that resources are used in
462 accordance with this paragraph; however, each project must be
463 reviewed at least once every 2 years.
464 d. The Department of Economic Opportunity shall, in
465 consultation with the statewide and regional housing and
466 financial intermediaries, market the availability of the
467 community contribution tax credit program to community-based
468 organizations.
469 Section 5. Paragraph (d) of subsection (1) of section
470 220.03, Florida Statutes, is amended to read:
471 220.03 Definitions.—
472 (1) SPECIFIC TERMS.—When used in this code, and when not
473 otherwise distinctly expressed or manifestly incompatible with
474 the intent thereof, the following terms shall have the following
475 meanings:
476 (d) “Community Contribution” means the grant by a business
477 firm of any of the following items:
478 1. Cash or other liquid assets.
479 2. Real property, which for purposes of this subparagraph
480 includes 100 percent ownership of a real property holding
481 company. The term “real property holding company” means a
482 Florida entity, such as a Florida limited liability company,
483 that:
484 a. Is wholly owned by the business firm.
485 b. Is the sole owner of real property, as defined in s.
486 192.001 s. 192.001(12), located in the state.
487 c. Is disregarded as an entity for federal income tax
488 purposes pursuant to 26 C.F.R. s. 301.7701-3(b)(1)(ii).
489 d. At the time of contribution to an eligible sponsor, has
490 no material assets other than the real property and any other
491 property that qualifies as a community contribution.
492 3. Goods or inventory.
493 4. Other physical resources as identified by the
494 department.
495 Section 6. Paragraph (a) of subsection (5) of section
496 624.5105, Florida Statutes, is amended to read:
497 624.5105 Community contribution tax credit; authorization;
498 limitations; eligibility and application requirements;
499 administration; definitions; expiration.—
500 (5) DEFINITIONS.—As used in this section, the term:
501 (a) “Community contribution” means the grant by an insurer
502 of any of the following items:
503 1. Cash or other liquid assets.
504 2. Real property, including 100 percent ownership of a real
505 property holding company.
506 3. Goods or inventory.
507 4. Other physical resources which are identified by the
508 department.
509
510 For purposes of this paragraph, the term “real property holding
511 company” means a Florida entity, such as a Florida limited
512 liability company, that is wholly owned by the insurer; is the
513 sole owner of real property, as defined in s. 192.001 s.
514 192.001(12), located in the state; is disregarded as an entity
515 for federal income tax purposes pursuant to 26 C.F.R. s.
516 301.7701-3(b)(1)(ii); and at the time of contribution to an
517 eligible sponsor, has no material assets other than the real
518 property and any other property that qualifies as a community
519 contribution.
520 Section 7. This act shall take effect July 1, 2018.
