Section 202.18(3)(c), F.S., requires the Department to make any adjustments to the distribution of proceeds of the local communications services tax that are necessary to reflect the proper amounts due to individual jurisdictions. The purpose of ...

DEPARTMENT OF REVENUE
Sales and Use Tax

RULE NO: RULE TITLE
12A-19.080: Distribution Adjustments to Local Taxing Jurisdictions
PURPOSE AND EFFECT: Section 202.18(3)(c), F.S., requires the Department to make any adjustments to the distribution of proceeds of the local communications services tax that are necessary to reflect the proper amounts due to individual jurisdictions.
The purpose of the creation of Rule 12A-19.080, F.A.C. (Distribution Adjustments Resulting From Misallocation of Tax), is to develop procedures that will be used by the Department for determining when misallocations of communications services tax have occurred, for notifying the affected jurisdictions of the misallocations, and how distribution adjustments will be made.
SUMMARY: The proposed creation of Rule 12A-19.080, F.A.C. (Distribution Adjustments Resulting From Misallocation of Tax), provides local governments and other affected parties a process and timeline on what and how to expect distribution adjustments resulting from misallocation of tax to or between local governments and component parts of the communications services tax.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: No Statement of Estimated Regulatory Cost was prepared.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
SPECIFIC AUTHORITY: 202.26(3)(a) FS.
LAW IMPLEMENTED: 202.18(3)(c), 202.22(5), 202.231, 202.35(3) FS.
A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: August 31, 2009, 1:00 p.m.
PLACE: Room 118, Carlton Building, 501 South 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 IS: Carla Bruce, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE FULL TEXT OF THE PROPOSED RULE IS:

12A-19.080 Distribution Adjustments Resulting From Misallocation of Tax.

(1) The purpose of this rule is to establish procedures when the Department determines that misallocations of communications services taxes require adjustments to distributions of the taxes. This determination will occur annually, with the adjustment cycle running from February 1 through January 31 of the subsequent year.

(2) DEFINITIONS: For purposes of this rule, the following terms are defined:

(a) “Distribution adjustments” are the reallocation of tax between local taxing jurisdictions or reallocation of tax distributed incorrectly to either the state, gross receipts or local portion of Communications Services Tax. This reallocation may be the result of incorrect local jurisdictional situsing, misapplication of tax on the return, or other filing errors causing tax misallocation.

(b) “Situsing” is the assignment of a service address to a local taxing jurisdiction.

(c) A “completed audit” is as an audit that has been paid and all formal or informal protest rights have been exercised or expired.

(3) DISTRIBUTION THRESHOLDS.

(a) The Department’s determination will occur annually on or about November 15 and notice of this determination will be mailed to each affected local jurisdiction.

1. When the distribution adjustment is less than ninety percent (90%) of the average monthly distributions to the affected jurisdiction for the immediately preceding six months, the Department will make such adjustments in the month immediately following the Department’s determination that misallocations occurred.

2.a. When the distribution adjustment is equal to or exceeds ninety percent (90%) of the average monthly distributions to the affected jurisdiction for the immediately preceding six months, the Department will make such adjustments beginning with the March distribution, unless affected jurisdictions seek another form of reallocation as described in sub-subparagraph 2.b. The adjustments will be made over a time period that equals the time period that the misallocations occurred.

b. Affected jurisdictions may seek another form of reallocation of proceeds other than by monthly Department distributions. The affected jurisdictions may execute a written agreement specifying a method of adjustment. A copy of the written agreement must be provided to the Department no later than the first day of the month following 90 days after the date the Department transmits notice of the misallocation.

(b) Example: A jurisdiction’s average monthly distribution is $10,000. The jurisdiction’s sum total of adjustments for the adjustment cycle is ($9,000). All adjustments are from audits with a 36-month audit period. The ($9,000) will be allocated equally over a 36-month period with a monthly adjustment of ($250). [($9000) / 36 months = ($250)].

(c) Example: A jurisdiction’s average monthly distribution is $10,000. The jurisdiction’s sum total of adjustments for the adjustment cycle is ($8,000.00). The ($8,000) adjustment will be made to the jurisdiction’s December distribution.

(4) DISTRIBUTION ADJUSTMENT TIMELINE.

(a) On February 1, distribution adjustments will be combined into one electronic file organized by county and then jurisdiction within the county. For each local jurisdiction, the file will identify the taxpayer names, federal identification numbers, and the amount of the distribution adjustment. The file will be posted to the Local Government Communications Services Tax Information Sharing System. All local jurisdictions will have 30 days to review and make general inquiries regarding their proposed distribution adjustment. A local jurisdiction may make the inquiry to the Florida Department of Revenue, Local Government Unit, by mail at 5050 W. Tennessee St., Tallahassee, FL 32399-0100, or by e-mail to [e-mail], or by phone to [phone]. All general inquiries regarding proposed distribution adjustments must be postmarked or otherwise time stamped or received by March 1.

(b) At any time, a local government may request to review adjustment documentation. Local governments who seek to review the documentation regarding their distribution adjustment(s) must submit a written letter specifying which adjustment(s) the local jurisdiction wishes to review. The letter must include:

1. The name of the local government;

2. The requestor’s name, mailing address, phone number and email address;

3. The requestor’s signature; and

4. Specification of which adjustment(s) by taxpayer name and federal identification number the local government is requesting to review. The federal identification number can be found in the Adjustment Distribution File or Distribution Data Download file posted on the Local Government Communications Services Tax Information Sharing System. The letter should be sent to the Florida Department of Revenue, Security and Disclosure Officer, P. O. Box 37372, Tallahassee, FL 32315-7372.

(c) On April 1, a final adjustments file will be posted to the Local Government Communications Services Tax Information Sharing System.

(d) On or about November 15, if the Department determines that misallocations have occurred, it will mail notification of this determination to each affected local jurisdiction.

(e) The December distribution of communications services tax will include adjustments for those jurisdictions whose net adjustments are less than ninety percent (90%) of the average monthly distributions to the affected jurisdiction for the six months immediately proceeding November 1.

(f) March Distribution of the subsequent year: For those jurisdictions whose net adjustments are equal to or in excess of the ninety percent (90%) of the average monthly distributions to the affected jurisdiction for the six months immediately preceding November 1, the first distribution adjustments will occur in March, unless the Department has received a written agreement specifying a different method of adjustment from affected jurisdictions by March 1.

(g) If any date specified above falls on a Saturday, Sunday, or federal or state legal holiday, the specific action will occur on the next succeeding workday.

(5) All information posted to the Local Government Communications Services Tax Information Sharing System for all jurisdictions to review is confidential taxpayer information pursuant to Section 213.053, F.S. This information shall not be distributed by the local government, except for use(s) as described in Section 213.053(8)(v), F.S.

Rulemaking Authority 202.26(3)(a) FS. Law Implemented 202.18(3)(c), 202.22(5), 202.231, 202.35(3) FS. History– New_________.

NAME OF PERSON ORIGINATING PROPOSED RULE: Carla Bruce, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]
NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor Charlie Crist and members of the Florida Cabinet, Attorney General Bill McCollum, Chief Financial Officer Alex Sink, and Agriculture Commissioner Charles H. Bronson, as agency head of the Department of Revenue
DATE PROPOSED RULE APPROVED BY AGENCY HEAD: July 28, 2009
DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAW: The proposed creation of Rule 12A-19.080, F.A.C. (Distribution Adjustments Resulting From Misallocation of Tax), was noticed in the Florida Administrative Weekly on March 6, 2009 (Vol. 35, No. 9, p. 1052). A rule development workshop was held on April 1, 2009, in Room 118, Carlton Building, 501 S. Calhoun Street, Tallahassee, Florida, to allow members of the public to ask questions and make comments concerning the proposed rule. In response, changes were made to proposed subsection (1) and proposed paragraphs (4)(a) and (c) of the proposed rule.