Bill Text: FL S0170 | 2012 | Regular Session | Introduced
Bill Title: Transfer of Tax Liability
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced - Dead) 2012-03-06 - Laid on Table, refer to HB 103 -SJ 876 [S0170 Detail]
Download: Florida-2012-S0170-Introduced.html
Florida Senate - 2012 SB 170 By Senator Altman 24-00022-12 2012170__ 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 temporarily 11 enjoins 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 enjoins business activity in an action brought 20 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 to 46 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 insideras defined in75s.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,if 81 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 institutionas 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 held 89 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,108penalty, surcharge, or fee administered by the department109pursuant to chapter 443 or described in s.72.011(1), excluding110corporate income tax,and who quits theabusiness 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 make117payment may not engage in any business in this state until the118final return has been filed and all taxes, interest, or119penalties 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 taxestax,124interest, or penaltiesare paid. A temporary injunction 125 enjoining further business activity shallmaybe granted by a 126 circuit court if the department has provided at least 20 days’ 127 prior written notice to the taxpayerwithout notice. 128 (3) A taxpayer who is liable for taxes with respect to a 129 business, interest, or penalties levied under chapter 443 or any130of the chapters specified in s.213.05, excluding corporate131income 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 penaltiesowed 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 arisingis not liable for taxes, interest, or penaltiesfrom 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 taxtaxes, interest, or161penaltiesowed 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 of168goods and fails to pay the taxes, interest, or penalties due may169not engage in any business in the state until the taxes,170interest, 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, or176penalties arepaid. A temporary injunction enjoining further 177 business activity shallmaybe granted by a circuit court if: 178without 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 bearejointly and severally liable with 193 the transferor for the payment of the taxtaxes, interest, or194penaltiesowed 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 200propertytransferred 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; or 219 (b) The transferee is not an insider, and the asset 220 transferred consists solely of a one- to four-family residential 221 real property and furnishings and fixtures therein; real 222 property that has not been improved with any building; or owner 223 occupied commercial real property; and, in each case, is not 224 accompanied by a transfer of other assets of the business. 225 (9) The department may adopt rules necessary to administer 226 and enforce this section. 227 Section 2. Subsection (17) of section 213.053, Florida 228 Statutes, is amended to read: 229 213.053 Confidentiality and information sharing.— 230 (17) The department may provide to the person against whom 231 transferee liability is being asserted pursuant to s. 213.758 232212.10(1)information relating to the basis of the claim. 233 Section 3. Section 202.31, Florida Statutes, is repealed. 234 Section 4. Section 212.10, Florida Statutes, is repealed. 235 Section 5. This act shall take effect upon becoming a law.