Bill Text: FL H0103 | 2012 | Regular Session | Introduced

NOTE: There are more recent revisions of this legislation. Read Latest Draft

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Bill Title: Transfer of Tax Liability

Spectrum: Partisan Bill (Republican 1-0)

Status: (Engrossed - Dead) 2012-03-07 - Ordered enrolled -HJ 1178 [H0103 Detail]

Download: Florida-2012-H0103-Introduced.html

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HB 103

1	A bill to be entitled
2	An act relating to the transfer of tax liability;
3	amending s. 213.758, F.S.; providing definitions;
4	revising provisions relating to tax liability when a
5	person transfers or quits a business; providing that
6	the transfer of the assets of a business or stock of
7	goods of a business under certain circumstances is
8	considered a transfer of the business; requiring the
9	Department of Revenue to provide certain notification
10	to a business before a circuit court shall temporarily
11	enjoin business activity by that business; providing
12	that transferees of the business are liable for
13	certain taxes unless specified conditions are met;
14	requiring the department to conduct certain audits
15	relating to the tax liability of transferors and
16	transferees of a business within a specified time
17	period; requiring certain notification by the
18	Department of Revenue to a transferee before a circuit
19	court shall enjoin business activity in an action
20	brought by the Department of Legal Affairs seeking an
21	injunction; specifying a transferor and transferee of
22	the assets of a business are jointly and severally
23	liable for certain tax payments up to a specified
24	maximum amount; specifying the maximum liability of a
25	transferee; providing methods for calculating the fair
26	market value or total purchase price of specified
27	business transfers to determine maximum tax liability
28	of transferees; excluding certain transferees from tax
29	liability when the transfer consists only of specified
30	assets; amending s. 213.053, F.S.; authorizing the
31	Department of Revenue to provide certain tax
32	information to a transferee against whom tax liability
33	is being asserted pursuant to s. 213.758, F.S.;
34	repealing s. 202.31, F.S., relating to the tax
35	liability and criminal liability of dealers of
36	communications services who make certain transfers
37	related to a communications services business;
38	repealing s. 212.10, F.S., relating to a dealer's tax
39	liability and criminal liability for sales tax when
40	certain transfers of a business occur; providing an
41	effective date.
42
43	Be It Enacted by the Legislature of the State of Florida:
44
45	Section 1.  Section 213.758, Florida Statutes, is amended
46	to read:
47	213.758  Transfer of tax liabilities.-
48	(1)  As used in this section, the term:
49	(a)  "Business" means any activity regularly engaged in by
50	any person, or caused to be engaged in by any person, for the
51	purpose of private or public gain, benefit, or advantage. The
52	term does not include occasional or isolated sales or
53	transactions involving property or services by a person who does
54	not hold himself or herself out as engaged in business. A
55	discrete division or portion of a business is not a separate
56	business and must be aggregated with all other divisions or
57	portions that constitute a business if the division or portion
58	is not a separate legal entity.
59	(b)  "Financial institution" means a financial institution
60	as defined in s. 655.005 and any person who controls, is
61	controlled by, or is under common control with a financial
62	institution as defined in s. 655.005.
63	(c)  "Insider" means:
64	1.  Any person included within the meaning of insider as
65	used in s. 726.102(7); or
66	2.  A manager of, a managing member of, or a person who
67	controls a transferor that is a limited liability company, or a
68	relative as defined in s. 726.102(11) of any such persons.
69	(d)(a)  "Involuntary transfer" means a transfer of a
70	business, assets of a business, or stock of goods of a business
71	made without the consent of the transferor, including, but not
72	limited to, a transfer:
73	1.  That occurs due to the foreclosure of a security
74	interest issued to a person who is not an insider as defined in
75	s. 726.102;
76	2.  That results from an eminent domain or condemnation
77	action;
78	3.  Pursuant to chapter 61, chapter 702, or the United
79	States Bankruptcy Code;
80	4.  To a financial institution, as defined in s. 655.005,
81	if the transfer is made to satisfy the transferor's debt to the
82	financial institution; or
83	5.  To a third party to the extent that the proceeds are
84	used to satisfy the transferor's indebtedness to a financial
85	institution as defined in s. 655.005. If the third party
86	receives assets worth more than the indebtedness, the transfer
87	of the excess may not be deemed an involuntary transfer.
88	(e)  "Stock of goods" means the inventory of a business
89	held for sale to customers in the ordinary course of business.
90	(f)  "Tax" means any tax, interest, penalty, surcharge, or
91	fee administered by the department pursuant to chapter 443 or
92	any of the chapters specified in s. 213.05, excluding chapter
93	220, the corporate income tax code.
94	(g)(b)  "Transfer" means every mode, direct or indirect,
95	with or without consideration, of disposing of or parting with a
96	business, assets of the business, or stock of goods of the
97	business, and includes, but is not limited to, assigning,
98	conveying, demising, gifting, granting, or selling, other than
99	to customers in the ordinary course of business, to a transferee
100	or to a group of transferees who are acting in concert. A
101	business is considered transferred when there is a transfer of
102	more than 50 percent of:
103	1.  The business;
104	2.  The assets of the business; or
105	3.  The stock of goods of the business.
106	(2)  A taxpayer engaged in a business who is liable for any
107	tax arising from the operation of that business, interest,
108	penalty, surcharge, or fee administered by the department
109	pursuant to chapter 443 or described in s. 72.011(1), excluding
110	corporate income tax, and who quits the a business without the
111	benefit of a purchaser, successor, or assignee, or without
112	transferring the business, assets of the business, or stock of
113	goods of a business to a transferee, must file a final return
114	for the business and make full payment of all taxes arising from
115	the operation of that business within 15 days after quitting the
116	business. A taxpayer who fails to file a final return and make
117	payment may not engage in any business in this state until the
118	final return has been filed and all taxes, interest, or
119	penalties due have been paid. The Department of Legal Affairs
120	may seek an injunction at the request of the department to
121	prevent further business activity of a taxpayer who fails to
122	file a final return and make payment of the taxes associated
123	with the operation of the business until such taxes tax,
124	interest, or penalties are paid. A temporary injunction
125	enjoining further business activity shall may be granted by a
126	circuit court if the department has provided at least 20 days'
127	prior written notice to the taxpayer without notice.
128	(3)  A taxpayer who is liable for taxes with respect to a
129	business, interest, or penalties levied under chapter 443 or any
130	of the chapters specified in s. 213.05, excluding corporate
131	income tax, who transfers the taxpayer's business, assets of the
132	business, or stock of goods of the business, must file a final
133	return and make full payment within 15 days after the date of
134	transfer.
135	(4)(a)  A transferee, or a group of transferees acting in
136	concert, of more than 50 percent of a business, assets of a
137	business, or stock of goods of a business is liable for any
138	unpaid tax, interest, or penalties owed by the transferor
139	arising from the operation of that business unless:
140	1.a.  The transferor provides a receipt or certificate of
141	compliance from the department to the transferee showing that
142	the transferor has not received a notice of audit and the
143	transferor has filed all required tax returns and has paid all
144	tax arising is not liable for taxes, interest, or penalties from
145	the operation of the business identified on the returns filed;
146	and
147	b.  There were no insiders in common between the transferor
148	and the transferee at the time of the transfer; or
149	2.  The department finds that the transferor is not liable
150	for taxes, interest, or penalties after an audit of the
151	transferor's books and records. The audit may be requested by
152	the transferee or the transferor and, if not done pursuant to
153	the certified audit program under s. 213.285, must be completed
154	by the department within 90 days after the records are made
155	available to the department. The department may charge a fee for
156	the cost of the audit if it has not issued a notice of intent to
157	audit by the time the request for the audit is received.
158	(b)  A transferee may withhold a portion of the
159	consideration for a business, assets of the business, or stock
160	of goods of the business to pay the tax taxes, interest, or
161	penalties owed to the state by the transferor taxpayer arising
162	from the operation of the business. The transferee shall pay the
163	withheld consideration to the state within 30 days after the
164	date of the transfer. If the consideration withheld is less than
165	the transferor's liability, the transferor remains liable for
166	the deficiency.
167	(c)  A transferee who acquires the business or stock of
168	goods and fails to pay the taxes, interest, or penalties due may
169	not engage in any business in the state until the taxes,
170	interest, or penalties are paid. The Department of Legal Affairs
171	may seek an injunction at the request of the department to
172	prevent further business activity of a transferee who is liable
173	for unpaid tax of a transferor and who fails to pay or cause to
174	be paid the transferee's maximum liability for such tax due
175	until such maximum liability for the tax is, interest, or
176	penalties are paid. A temporary injunction enjoining further
177	business activity shall may be granted by a circuit court if:
178	without notice.
179	1.  The assessment against the transferee is final and
180	either:
181	a.  The time for filing a contest under s. 72.011 has
182	expired; or
183	b.  Any contest filed pursuant to s. 72.011 resulted in a
184	final and nonappealable judgment sustaining any part of the
185	assessment; and
186	2.  The department has provided at least 20 days' prior
187	written notice to the transferee of its intention to seek an
188	injunction.
189	(5)  The transferee, or transferees acting in concert, of
190	more than 50 percent of a business, assets of the business, or
191	stock of goods of a business who are liable for any tax pursuant
192	to this section shall be are jointly and severally liable with
193	the transferor for the payment of the tax taxes, interest, or
194	penalties owed to the state from the operation of the business
195	by the transferor up to the transferee's or transferees' maximum
196	liability for such tax due.
197	(6)  The maximum liability of a transferee pursuant to this
198	section is equal to the fair market value of the business,
199	assets of the business, or stock of goods of the business
200	property transferred to the transferee or the total purchase
201	price paid by the transferee for the business, assets of the
202	business, or stock of goods of the business, whichever is
203	greater.
204	(a)  The fair market value must be determined net of any
205	liens or liabilities, with the exception of liens or liabilities
206	owed to insiders.
207	(b)  The total purchase price must be determined net of
208	liens and liabilities against the assets, with the exception of:
209	1.  Liens or liabilities owed to insiders.
210	2.  Liens or liabilities assumed by the transferee that are
211	not liens or liabilities owed to insiders.
212	(7)  After notice by the department of transferee liability
213	under this section, the transferee has 60 days within which to
214	file an action as provided in chapter 72.
215	(8)  This section does not impose liability on a transferee
216	of a business, assets of a business, or stock of goods of a
217	business when:
218	(a)  The transfer is pursuant to an involuntary transfer;
219	or
220	(b)  The transferee is not an insider, and the asset
221	transferred consists solely of a one- to four-family residential
222	real property and furnishings and fixtures therein; real
223	property that has not been improved with any building; or owner-
224	occupied commercial real property; and, in each case, is not
225	accompanied by a transfer of other assets of the business.
226	(9)  The department may adopt rules necessary to administer
227	and enforce this section.
228	Section 2.  Subsection (17) of section 213.053, Florida
229	Statutes, is amended to read:
230	213.053  Confidentiality and information sharing.-
231	(17)  The department may provide to the person against whom
232	transferee liability is being asserted pursuant to s. 213.758
233	212.10(1) information relating to the basis of the claim.
234	Section 3.  Section 202.31, Florida Statutes, is repealed.
235	Section 4.  Section 212.10, Florida Statutes, is repealed.
236	Section 5.  This act shall take effect upon becoming a law.

CODING: Words stricken are deletions; words underlined are additions.