May 07, 2004
. . . From Attorney General Charlie Crist and the Florida Department of Revenue
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TALLAHASSEE - The Florida Department of Revenue will hold a series of fact-finding workshops over the summer of 2004 on how a complex provision of a 2001 communications services tax law may apply to certain communications technology used by Florida businesses, the Department announced Friday.
The Department will conduct an initial workshop in early June, asking for businesses to provide information on the potential impacts of a law imposing Florida communications services tax on technology known as "substitute communications systems." The June workshop has not yet been scheduled.
As part of an extensive reform of Florida telecommunications tax law in 2001, the Florida Legislature applied communications services tax to the depreciation and other operating expenses of "substitute communications systems." The 2001 legislation defined these systems as any system capable of transmitting, conveying, or routing signals used as a substitute for purchasing services from a communications company.
Language in this portion of the statute was based on a 1985 law that required a small number of companies operating their own internal telephone systems to pay the same kinds of taxes that they would pay if they bought a similar service from a telephone company.
However, rapidly evolving communications technology, potential changes in federal regulations, and dramatic expansion of sophisticated information routing equipment have raised questions about how Florida businesses and local governments should apply the 2001 law. Legislation to defer administration of the 2001 statute was proposed in the 2004 legislative session, but the session ended before the legislation was adopted.
The Department of Revenue now is working to schedule the fact-finding workshops, which will be conducted under the provisions of Chapter 120, which governs rulemaking by state agencies. The first workshop will be conducted in June. Because the Department anticipates that highly technical and complex issues may be presented, additional workshops will be scheduled as necessary. For times and locations of meetings, interested parties should watch for notices of the workshops to be published in the Florida Administrative Weekly and in the "Proposed Rules" section on the Department's web site (www.myflorida.com/dor/).
After gathering information, the Department will proceed with formal rulemaking on the issue under the provisions of Chapter 120. Under these provisions, the Department will draft a proposed provision of Florida Administrative Code to administer the law, conduct public hearings on the proposed rule language, and submit a draft based on input at the public hearings to the Governor and Cabinet for their consideration. The Governor and Cabinet must vote on whether to approve the proposed rule. Taxpayers should seek advice from their tax advisors on how to comply with the 2001 law.