The purpose of the proposed amendment to Rule 12A-1.057, F.A.C. (Alcoholic and Malt Beverages), is to delete an unnecessary reference to the Department’s authority to require a surety bond or cash deposit. The purpose of the proposed amendments to ...

 

DEPARTMENT OF REVENUE
Sales and Use Tax

RULE NO: RULE TITLE
12A-1.057: Alcoholic and Malt Beverages
12A-1.060: Registration
12A-1.097: Public Use Forms
PURPOSE AND EFFECT: The purpose of the proposed amendment to Rule 12A-1.057, F.A.C. (Alcoholic and Malt Beverages), is to delete an unnecessary reference to the Department’s authority to require a surety bond or cash deposit.
The purpose of the proposed amendments to Rule 12A-1.060, F.A.C. (Registration), is to provide when the Department will require a cash deposit, surety bond, or irrevocable letter of credit as a condition for any person to obtain or retain a dealer’s certificate of registration. The proposed amendments: (1) define the terms “person,” “security,” and “tax or fee liability” for purposes of these requirements; (2) provide the qualifying events for which the Department will determine that security will be required for a person to obtain, retain, or renew a dealer’s certificate of registration; (3) provide how the Department will determine the amount of security required; (4) provide that the Department will provide written notice of intent to deny registration or written notice of intent to revoke registration, as applicable, unless security is posted; (5) provide requirements for requesting a conference regarding the requirement to provide security and inform persons of the right to request an administrative hearing; (6) provide that if the Department determines the amount of an existing security is insufficient or the amount of the security is reduced or released, the Department will provide written notification to the person of the revised amount of security required, and that the person notified must provide additional security or request a conference regarding the requirement to provide additional security; (7) provide that if additional security is provided the Department will cancel, surrender, or discharge the previous security; (8) provide that the duration of security required by the Department will not be less than 12 months; (9) provide that, if the person required to provide security ceases operations during the time the security is held, a written request to the Department is required for it to return a cash deposit or to release the surety bond or irrevocable letter of credit; (10) provide that the Department will offset any reimbursement against any outstanding liability of a dealer that ceases business during the term of the security; and (11) provide that the Department may initiate an action to seek a release of moneys from the security held by the Department if a taxpayer is more than 30 days delinquent in the payment of its tax or fee liability.
The effect of the proposed amendments to Rule 12A-1.060, F.A.C., will be to provide the requirements and procedures the Department will use when requiring security in the form of a cash deposit, surety bond, or irrevocable letter of credit as a condition to obtaining or retaining a dealer’s certificate of registration, under the authority of Section 212.14(4), F.S.
The purpose of the proposed amendments to Rule 12A-1.097, F.A.C. (Public Use Forms), is to adopt, by reference, Form DR-17A, Certificate of Cash Deposit/Cash Bond, and Form DR-29, Application for Refund of Cash Deposit/Cash Bond.
SUBJECT AREA TO BE ADDRESSED: The subject area of the workshop is the Department’s proposed requirement regarding cash deposits, surety bonds, or irrevocable letters of credit as a condition to obtain or retain a dealer’s certificate of registration.
SPECIFIC AUTHORITY: 201.11, 202.17(3)(a), 202.22(6), 202.26(3), 212.0515(7), 212.07(1)(b), 212.08(5)(b)4., (7), 212.11(5)(b), 212.12(1)(b)2., 212.17(6), 212.18(2), (3), 213.06(1), 376.70(6)(b), 376.75(9)(b), 403.718(3)(b), 403.7185(3)(b), 443.171(2), (7) FS.
LAW IMPLEMENTED: 92.525(1)(b), (3), 95.091, 125.0104, 125.0108, 201.08(1)(a), 201.01, 201.133, 201.17(1)-(5), 202.11(2), (3), (6), (16), (24), 202.17, 202.22(3)-(6), 202.28(1), 203.01, 212.02, 212.03, 212.0305, 212.031, 212.04, 212.05, 212.0501, 212.0515, 212.054, 212.055, 212.06, 212.0606, 212.07(1), (8), (9), 212.08, 212.084(3), 212.085, 212.09, 212.096, 212.11(1), (4), (5), 212.12(1), (2), (9), (13), 212.13, 212.14(4), (5), 212.17, 212.18(2), (3), 213.235, 213.29, 213.37, 219.07, 288.1258, 376.70, 376.75, 403.717, 403.718, 403.7185, 443.036, 443.121(1), (3), 443.131, 443.1315, 443.1316, 443.171(2), (7) FS.
A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: November 13, 2007, 2:00 p.m.
PLACE: Room 118, Carlton Building, 501 S. Calhoun Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Larry Green at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Thomas Butscher, Senior Counsel, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

 

12A-1.057 Alcoholic and Malt Beverages.

(1) No change.

(2) Any person desiring to sell such beverages at retail must first qualify as a dealer under Chapter 212, F.S., before applying to the Division of Alcoholic Beverages and Tobacco, Department of Business and Professional Regulation, for a license. Surety or cash bond to guarantee payment of taxes may be required by the Department of Revenue.

(3) through (4) No change.

Specific Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 212.02(12), (14)(a), 212.05(1)(a)1.a., (b), (2), (3), (4), 212.06, 212.07(2), (4), 212.08(4)(b), (7)(s), 212.14(4), 212.19, 561.01 FS. History–Revised 10-7-68, 6-16-72, Amended 1-10-78, 7-16-79, 7-20-82, Formerly 12A-1.57, Amended 12-13-88,_________.

 

12A-1.060 Registration.

(1) through (5) No change.

(6) CASH DEPOSITS, SURETY BONDS, OR LETTERS OF CREDIT. The Department will utilize the criteria in this subsection when it requires a cash deposit, surety bond, or irrevocable letter of credit as a condition to any person obtaining or retaining a dealer’s certificate of registration. Nothing in this subsection prohibits the Department from pursuing any other authorized means to collect a tax or fee liability. Nothing in this subsection requires the Department to permit the posting of a cash deposit, surety bond, or irrevocable letter of credit instead of revoking or refusing to issue a dealer’s certificate of registration. This subsection does not apply to a person currently in compliance with a written agreement with the Department regarding its tax or fee liabilities and obligations.

(a) Definitions. For the purposes of this subsection:

1. “Person” means any person, as defined in Section 212.02(12), F.S., and includes individuals owning a controlling interest in a person.

2. “Person” also includes any person with an existing certificate of registration or any person seeking to obtain a dealer’s certificate of registration:

a. who has acquired ownership or controlling interest in a business that would be otherwise liable for posting security, if the person fails to provide evidence the business was acquired in an arms length transaction or for consideration; or

b. for a business that will be operated at an identical location of a previous business that would otherwise have been liable for posting security, if such person fails to provide evidence the business was acquired in an arms length transaction or for consideration.

3. The word “security” means cash deposits, surety bonds, or irrevocable letters of credit. Bonds required under this subsection must be issued by a surety company authorized to do business in this state as a surety. Irrevocable letters of credit must be issued by a bank authorized to do business in the state as a bank and must be engaged by a bank as an agreement to honor demands for payment.

4. “Tax or fee liability” means any liability for any of the following taxes or fees, penalty, or interest:

a. Any sales or use tax, discretionary sales surtax, or local option tax imposed under Chapter 212, F.S.;

b. Any tourist development tax levied under Section 125.0104, F.S., or tourist impact tax levied under Section 125.0108, F.S.;

c. The rental car surcharge levied under Section 212.0606, F.S.;

d. Any solid waste fee, such as the new tire fee levied under Section 403.718, F.S., or the lead-acid battery fee levied under Section 403.7185, F.S.;

e. The motor vehicle warranty fee levied under Section 681.117, F.S.;

f. Any penalty or interest imposed under Sections 212.12(2), or 213.235, F.S.

(b) Qualifying Events. Security will be required when the Department determines that any of the following qualifying events apply:

1. The person owns or manages a business that has no permanent business location in Florida, or where a person operates from a temporary location in Florida for less than six months in any consecutive twelve-month period, and there is evidence that the person will fail to remit taxes to the state;

2. The person has had a previous certificate of registration revoked;

3. The person failed to comply with the provisions of a judgment, settlement agreement, closing agreement, stipulated payment agreement, or consent agreement entered into with the Department; or

4. Whether a warrant is currently unsatisfied in whole or in part; or

5. The person is seeking an additional registration and has an outstanding liability of $2500 or more.

(c) Security Amount Determination.

1. When the Department requires a person with an existing certificate of registration to post security, the required security will be equal to the person’s total estimated tax or fee liability, as determined by the Department, for the preceding twelve calendar months, plus the person’s outstanding tax or fee liability.

2. When the Department requires a person applying for a new certificate of registration to post security, the following criteria will be used to determine the amount required, unless the specific facts and circumstances warrant a higher amount not to exceed the sum of the person’s total estimated tax or fee liability, as determined by the Department, for twelve calendar months, plus the person’s outstanding tax or fee liability:

a. If the person is or will be:

(I) A monthly filer, security equal to six months’ estimated tax or fee liability will be required.

(II) A quarterly filer, security equal to nine months’ estimated tax or fee liability will be required.

(III) A semiannual or annual filer, security equal to one year of the estimated tax or fee liability will be required.

b. When considering specific facts and circumstances to determine if additional security will be required under this subparagraph, the Department will consider and be guided by the person’s financial status, including, but not limited to:

(I) The value of the person’s real property holdings in Florida;

(II) The value of the person’s assets in Florida, including the liquidity or mobility of the assets; or

(III) Outstanding money judgments against the person.

(d) Procedural Issues Regarding the Security Requirement.

1. When the Department determines that security is required as a condition to obtaining a dealer’s certificate of registration, it will send written notice of intent to deny registration to the person at the person’s last known address as it appears in the Department’s records. When the Department determines that security is required as a condition to retaining a dealer’s certificate of registration, it will send notice of intent to revoke registration to the person at the person’s last known address as it appears in the Department’s records. The person must either post security or send a written request for a conference to the Department. The security or written request for a conference must be received by the Department within 30 consecutive calendar days after the date of the notice.

2.a. A request for a conference must be made directly to the office designated in the notice and must:

(i) State the reasons for objecting to the requirement to post security;

(ii) Request an informal conference with the Department regarding the requirement to post security;

(iii) Include a copy of the notice informing the person of the requirement to post security; and

(iv) Be mailed, hand delivered, or faxed to the office address or fax number provided in the notice of the requirement to post security.

b. Requests postmarked, hand delivered, or faxed more than 30 consecutive calendar days after the date of issuance of the notice will be deemed late filed and shall result in the forfeiture of the person’s rights to such conference, unless the person has timely secured a written extension of time within which to file a request for a conference.

c. An extension of time in which to request a conference may be secured by mailing, hand delivering, or faxing a written request to the office designated in the notice. Each extension of time will be for 30 consecutive calendar days. Within a 30 consecutive calendar day extension period, the person may submit a request in writing to the office designated in the notice for an additional 30 consecutive calendar day extension within which to request a conference.

d. Failure to mail, hand deliver, or fax a written request for a conference or a written request for an additional 30 consecutive calendar day extension within a pending extension period shall result in forfeiture of the right to such conference.

e. If a conference is requested, it will be held at the earliest convenience of both the person and the Department, but it will not be held more than 60 consecutive calendar days after the notice, unless specifically agreed to in writing by the Department.

f. If a request for a conference is not timely made, the right to seek a conference is waived.

g. The 30 consecutive calendar days provided for requesting a conference may be waived by the person to expedite resolution of the issue.

h. The person has the right to request an administrative hearing, to be conducted in accordance with Section 120.57, F.S., and Rule Chapter 28-106, F.A.C., if the notice of the requirement to post security becomes final. For this purpose, the Department’s notice will become final if:

(i) An agreement is not reached after the informal conference;

(ii) A written request for a conference or a written request for an extension of time for requesting a conference is not timely filed; or

(iii) The right to an informal conference is waived.

2. If the person fails to post security or to secure review of the requirement to post security, the Department will deny the application for a certificate of registration, will revoke any existing certificate, and request that the Department of Legal Affairs proceed by injunction to prevent such person from doing business in the state until the appropriate security is posted.

3. Any security posted under this subsection must solely benefit the Florida Department of Revenue, and must be conditioned upon the timely compliance with the person’s tax or fee liability and the terms and conditions of any compliance agreement entered into between the person and the Department.

4. Any person posting security in the form of a cash deposit must complete Form DR-17A, Certificate of Cash Deposit/Cash Bond (incorporated by reference in Rule 12A-1.097, F.A.C.). Suggested formats for the irrevocable letter of credit and the surety bond are available on the Department’s website: www.myflorida.com/dor.

5. An irrevocable letter of credit must contain an expiration date that is at least eighteen months after the stated date of issuance.

6. An irrevocable letter of credit or surety bond must contain a provision that requires the issuing bank or surety company to notify the Department of the expiration or termination of the irrevocable letter of credit or surety bond by certified mail at least 60 days prior to the expiration or termination.

7. If security is still required under this subsection and an irrevocable letter of credit or surety bond expires or is terminated without substitution, the Department will revoke the applicable person’s existing certificate and request that the Department of Legal Affairs proceed by injunction to prevent such person from doing business in the state until substitute security is posted.

8. No interest will be paid by the state to any person for the deposit of any security under this subsection.

(e) Insufficiency of Security. If the Department determines that the amount of any existing security is insufficient to ensure payment of the amount of the tax or fee liability, penalties and interest for which the person is or may become liable, or if the amount of the security is reduced or released whether by judgment rendered or by use of the security to pay the delinquent tax or fee liability, penalties or interest, the Department will provide written notification to the person of the revised amount of security required. The person is required to file an additional security in the amount required by the Department, or request a conference within 30 consecutive calendar days, failing which the Department will revoke any existing registration. If a new security is furnished, the Department, as appropriate, will cancel, surrender, or discharge the previous security, for which the new security is substituted.

(f) Security Duration. If the person complies with its tax or fee liability for a period of twelve consecutive months, upon written request, the Department will release the surety bond or irrevocable letter of credit. A person requesting the return of a cash deposit must file Form DR-29, Application for Release or Refund of Security (incorporated by reference in Rule 12A-1.097, F.A.C.). If the person ceases operation of the business during the time the security is being held by the Department, a written request must be made within 90 days of ceasing operations, requesting the return of the deposit or release of the surety bond or irrevocable letter of credit. The Department will offset any reimbursements of security under this subsection against any outstanding tax or fee liability of the person.

(g) Delinquent Payments. If any person is delinquent more than 30 days in the payment of its tax or fee liability, the Department is authorized to initiate an action to seek release of moneys from the security held by the Department.

Specific Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 212.03(1), (2), 212.04(4), 212.0596(1), (2), 212.06(2), 212.12(2), (5), (6), 212.14(4), 212.16(1), (2), 212.18(3) FS. History– Revised 10-7-68, 1-7-70, 6-16-72, Amended 3-21-77, 5-10-77, 10-18-78, Formerly 12A-1.60, Amended 6-10-87, 1-2-89, 11-12-90, 3-17-94, 1-2-95, 3-20-96, 11-30-97, 4-2-00, 6-19-01, 10-2-01(1), 10-2-01(1), 4-17-03, 6-12-03,_________.

 

12A-1.097 Public Use Forms.

(1) The following public use forms and instructions are employed by the Department in its dealings with the public related to the administration of Chapter 212, F.S. These forms are hereby incorporated by reference in this rule.

(a) through (b) No change.

Form NumberTitleEffective Date

(2) through (7) No change.

(8) DR-17ACertificate of Cash
Deposit/Cash Bond (R.      )_____

(8) through (10) renumbered (9) through (11) No change.

(12) DR- 29Application for Release or
Refund of Security_____

(R.     )

(11) through (23) renumbered (13) through (25) No change.

Specific Authority 201.11, 202.17(3)(a), 202.22(6), 202.26(3), 212.0515(7), 212.07(1)(b), 212.08(5)(b)4., (7), 212.11(5)(b), 212.12(1)(b)2., 212.17(6), 212.18(2), (3), 213.06(1), 376.70(6)(b), 376.75(9)(b), 403.718(3)(b), 403.7185(3)(b), 443.171(2), (7) F.S. Law Implemented 92.525(1)(b), (3), 95.091, 125.0104, 125.0108, 201.08(1)(a), 201.01, 201.133, 201.17(1)-(5), 202.11(2), (3), (6), (16), (24), 202.17, 202.22(3)-(6), 202.28(1), 203.01, 212.02, 212.03, 212.0305, 212.031, 212.04, 212.05, 212.0501, 212.0515, 212.054, 212.055, 212.06, 212.0606, 212.07(1), (8), (9), 212.08, 212.084(3), 212.085, 212.09, 212.096, 212.11(1), (4), (5), 212.12(1), (2), (9), (13), 212.13, 212.14(4), (5), 212.17, 212.18(2), (3), 213.235, 213.29, 213.37, 219.07, 288.1258, 376.70, 376.75, 403.717, 403.718, 403.7185, 443.036, 443.121(1), (3), 443.131, 443.1315, 443.1316, 443.171(2), (7) FS. History–New 4-12-84, Formerly 12A-1.97, Amended 8-10-92, 11-30-97, 7-1-99, 4-2-00, 6-28-00, 6-19-01, 10-2-01, 10-21-01, 8-1-02, 4-17-03, 5-4-03, 6-12-03, 10-1-03, 9-28-04, 6-28-05, 5-1-06, 4-5-07,_________.