HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 609 Local Business Taxes
SPONSOR(S): State Affairs Committee, Ways & Means Committee, Botana and others
TIED BILLS: IDEN./SIM. BILLS: SB 1144
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 16 Y, 7 N, As CS Berg Aldridge
2) State Affairs Committee 12 Y, 7 N, As CS Burgess Williamson
SUMMARY ANALYSIS
The local business tax authorized under Chapter 205, F.S., represents the taxes charged and the method by
which a local government authority grants the privilege of engaging in or managing any business, profession,
or occupation within its jurisdiction. Counties and municipalities may levy a business tax, and the tax proceeds
are considered general revenue for the local government. This tax does not refer to any regulatory fees or
licenses paid to any board, commission, or officer for permits, registration, examination, or inspection.
The bill provides a limitation on the amount of revenue a local government may receive from local business
taxes based on the revenue the local government received in local Fiscal Year (FY) ending September 30,
2023, or September 30, 2024, whichever is greater. If a local government receives more local business tax
revenue than it did in the base year, the local government must proportionally reduce its tax rates and must
issue refunds or credits to taxpayers. The bill provides guidance on how those refunds and credits must be
calculated and when they must occur.
The bill requires local governments to include an affidavit in their annual financial audit report to the Auditor
General attesting to compliance with the requirement to reduce rates and issue refunds, if needed. The Auditor
General must follow up with any local governments not in compliance and report those local governments to
the Legislative Auditing Committee if the noncompliance continues.
The bill also makes conforming changes.
The bill has an effective date of July 1, 2024.
The Revenue Estimating Conference has not estimated the impact of the committee substitute.
This bill may be a county or municipality mandate requiring a two-thirds vote of the membership of the
House. See Section III.A.1 of the analysis.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
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 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Local Business Taxes
Background
The local business tax, authorized in Chapter 205, F.S., represents the fees charged and the method
by which a local government authority grants the privilege of engaging in or managing any business,
profession, or occupation within its jurisdiction. Counties and municipalities may levy a business tax,
and the tax proceeds are considered general revenue for the local government. 1 This tax does not refer
to any regulatory fees or licenses paid to any board, commission, or officer for permits, registration,
examination, or inspection.2
Prior to 1972, the state imposed an occupational license tax and shared the revenues with the counties.
Municipalities levied their own occupational license taxes pursuant to local ordinances or resolutions.
Counties had no authority to levy an occupational license tax until October 1, 1972, when Chapter 72-
306, Laws of Florida, repealed the state tax and authorized both counties and cities to impose an
occupational tax at the state or city rate then in effect. In 1980, the legislature authorized counties and
municipalities to increase rates by a specified percentage based on the rates then in effect. 3 In 1986,
the legislature authorized Miami-Dade, Broward, Monroe, and Collier counties to increase their rates by
an additional 50 percent, with the proceeds being dedicated to specified economic development
activities.4
Effective January 1, 2007, the legislature changed the name of the Local Occupational License Tax to
the Local Business Tax.5 This was done in response to some individuals representing that the fact they
had obtained an “occupational license” under Chapter 205, F.S., conferred upon them some type of
official proof of their competency to perform various repairs and services. The name change was
intended to clarify that the payments made under Chapter 205, F.S., were taxes and not some type of
regulatory fee.
Administrative Procedures
In order to levy a business tax, the governing body must first give at least 14 days of public notice
between the first and last reading of the resolution or ordinance by publishing a notice in a newspaper
of general circulation within its jurisdiction as defined by law. 6 The public notice must contain the
proposed classifications and rates applicable to the business tax. 7 A number of other conditions for levy
are imposed on counties and municipalities.8
For purposes of Chapter 205, F.S., the terms “business,” “profession,” and “occupation” do not include
the customary religious, charitable, or educational activities of non-profit religious, charitable, and
educational institutions in the state.9 These institutions are more particularly defined and limited in
statute.10 The term “receipt” means the document issued by the local governing authority, which bears
1 Sections 205.033 and 205.042, F.S.
2 Section 205.022(5), F.S.
3 Chapter 80-274, L.O.F.
4 Chapter 86-298, L.O.F.
5 Chapter 2006-152, L.O.F.
6 Sections 205.033 and 205.042, F.S.
7 Id.
8 Sections 205.033 and 205.043, F.S.
9 Section 205.022(1), F.S.
10 Id.
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 the words “Local Business Tax Receipt” and evidences that the person in whose name the document is
issued has complied with the provisions of Chapter 205, F.S., relating to the business tax. 11
The governing body of a municipality that levies the tax may request that the county in which the
municipality is located issue the municipal receipt and collect the tax. 12 The governing body of a county
that levies the tax may make the same request of a municipality.13 However, before any local
government issues any business receipts on behalf of another local government, those governments
must adopt an interlocal agreement.14 All business tax receipts are sold by the appropriate tax collector
beginning July 1 of each year.15 The taxes are due and payable on or before September 30 of each
year, and the receipts expire on September 30 of the succeeding year. 16 In several situations,
administrative penalties are also imposed.17
New Tax Levies
A county or municipality that has not yet adopted a business tax ordinance or resolution may adopt a
business tax ordinance pursuant to s. 205.0315, F.S. The tax rate structure and classifications in the
adopted ordinance must be reasonable and based upon the rate structure and classifications
prescribed in ordinances adopted by adjacent local governments that have implemented a local
business tax.18 If no adjacent local government has implemented a local business tax, or if the
governing body of the county or municipality finds that the rate structures or classifications of adjacent
local governments are unreasonable, then an alternative method is authorized. In such a case, the rate
structure or classifications prescribed in the ordinance of the local government seeking to impose the
tax may be based upon those prescribed in ordinances adopted by local governments that have
implemented a local business tax in counties or municipalities that have a comparable population. 19
Tax Base/Rate Restructuring
Currently, counties and municipalities with an existing local business tax may not reclassify businesses,
professions, and occupations.20 However, those counties and municipalities that underwent a
reclassification and rate structure revision pursuant to s. 205.0535, F.S., prior to October 1, 1995, or
during a window of time available from July 1, 2007, through October 1, 2008, for certain municipalities,
may, every other year, increase or decrease by ordinance the rates of business taxes by up to 5
percent.21 However, an increase may not be enacted by less than a majority plus one vote of the
governing body.22 A county or municipality is not prohibited from decreasing or repealing any
authorized local business tax.23
Exemptions
Chapter 205, F.S., provides several exemptions and exclusions from local business taxes . Customary
religious, charitable, or educational activities of non-profit religious, charitable, and educational
institutions are excluded from the definition of “business,” “profession,” and “occupation” and are
thereby excluded from paying local business taxes. 24 There is an optional partial exemption for
businesses located in enterprise zones.25 The delivery and transportation of tangible personal property
by a business that is otherwise required to pay a local business tax may not be charged a separate
11 Section 205.022(2), F.S.
12 Section 205.045, F.S.
13
Id.
14 Id.
15 Section 205.053, F.S.
16 Id.
17 Id.
18 Section 205.0315, F.S.
19 Id.
20 Section 205.0535, F.S.
21 Section 205.0535(4), F.S.
22 Id.
23 Id.
24 Section 205.022(1), F.S.
25 Section 205.054, F.S.
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 local business tax for such delivery or transportation service.26 There are also exemptions for persons
engaged in specified farming activities,27 certain nonresident persons regulated by the Department of
Business and Professional Regulation (DBPR),28 certain employees of businesses that are required to
pay a local business tax,29 certain disabled persons, the aged, and widows with minor dependents,30
disabled veterans of any war or their unremarried spouses,31 and certain mobile home setup
operations.32 Charitable, religious, fraternal, youth, civic, service, or other similar organization that
makes occasional sales or engage in fundraising projects that are performed exclusively by its
members and where the proceeds derived from the activities are used exclusively in the charitable,
religious, fraternal, youth, civic, and service activities of the organization are also exempt. 33
Regulatory Provisions
Section 205.194, F.S., provides that any person applying for or renewing a local business tax receipt to
practice any profession or engage in or manage any business or occupation regulated by DBPR, the
Florida Supreme Court, or any other state regulatory agency, including any board or commission
thereof, must exhibit an active state certificate, registration, or license, or proof of copy of the same,
before such local receipt may be issued. Sections 205.196, 205.1965, 205.1967, 205.1969, 205.1971,
205.1973, and 205.1975, F.S., provide similar requirements for the production of evidence of
appropriate licensure prior to the issuance of a business tax receipt for pharmacies and pharmacists,
assisted living facilities, pest control, health studios, and sellers of travel and telemarketing businesses ,
respectively.
Distribution of Revenues
The revenues derived from the business tax imposed by county governments, exclusive of the costs of
collection and any credit given for municipal business taxes, are apportioned between the county’s
unincorporated area and the incorporated municipalities located within the county by a ratio derived by
dividing their respective populations by the county’s total population. 34 Within 15 days following the
month of receipt, the apportioned revenues are sent to each governing authority; however, this
provision does not apply to counties that have established a new rate structure pursuant to s. 205.0535,
F.S.35
Authorized Uses of Revenues
The tax proceeds are considered general revenue for the county or municipality. Additionally, county
business tax proceeds may be used to oversee and implement a comprehensive economic
development strategy through advertising, promotional activities, and other sales and marketing
techniques.36 The proceeds of the additional county business tax imposed pursuant to s. 205.033(6),
F.S., must be distributed by the county’s governing body to a designated organization or agency for the
purpose of implementing a comprehensive economic development strategy through advertising,
promotional activities, and other sales and marketing techniques.37
26 Section 205.063, F.S.
27 Section 205.064, F.S.
28 Section 205.065, F.S.
29 Section 205.066, F.S.
30 Section 205.162, F.S.
31 Section 205.171, F.S.
32 Section 205.193, F.S.
33 Section 205.192, F.S.
34 Section 205.033(4), F.S.
35 Section 205.033(5), F.S.
36 Section 205.033(7), F.S.
37 Section 205.033(6)(b), F.S.
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 Total Revenues Collected
In Fiscal Year (FY) 2019-20, the last year for which complete and final data is available, counties
collected a total of $28.5 million of local business tax revenue.38 In that same FY, municipalities
collected a total of $168.4 million of local business tax revenue.39
Local Government Financial Reports and Audits
Annual Financial Reports
Florida law requires all units of local government to complete annual financial reports and annual
financial audit reports. Each unit of local government must submit its annual financial report to the
Department of Financial Services (DFS) within nine months of the completion of its FY.40 A unit of local
government required to have a financial audit conducted must also file a copy of the audit report along
with its annual financial report within the same time period.41 If a local government fails to file a
completed annual financial report within the required period, DFS must notify the Legislative Auditing
Committee.42
Annual Financial Audits
Each county and each municipality with revenues or total expenditures and expenses exceeding
$250,000 must have an annual financial audit prepared by an independent certified public accountant,
unless the local government has been notified before the start of the FY that the Auditor General will
conduct a financial audit for that year.43 Municipalities with revenues (or a total of expenditures and
expenses) between $100,000 and $250,000 are required to conduct a financial audit every three
years.44 The financial audit must be performed according to specific statutory criteria and the rules of
the Auditor General.45
At the conclusion of the audit, the auditor must discuss with the statutorily designated person for each
entity all of the auditor’s comments that will be included in the audit report. 46 If the designated person is
not available to discuss the auditor’s comments, their discussion is presumed when the comments are
delivered in writing to his or her office. The auditor is required to prepare an audit report in accordance
with the rules of the Auditor General.47 The audit report must be filed with the Auditor General within 45
days after delivery of the audit report to the governing body of the audited entity, but no later than nine
months after the end of the audited entity’s FY. 48 The audit report must include a written statement
describing corrective actions to be taken in response to each of the auditor’s recommendations
included in the audit report.
The Auditor General must notify the Legislative Auditing Committee of any audit report prepared
pursuant to s. 218.39, F.S., which indicates that an audited entity has failed to take full corrective action
in response to a recommendation that was included in the two preceding financial audit reports. 49
38 Revenue Estimating Conference Workpapers for HB 609, Impact Conference dated December 8, 2023, available at
http://edr.state.fl.us/Content/conferences/revenueimpact/archives/2024/_pdf/page36-39.pdf (last visited January 27, 2024).
39
Id.
40 Section 218.32(1)(d), F.S.
41 Section 218.32(1)(f), F.S.
42 Section 218.32(1)(d) F.S.
43 Section 218.39(1)(a) and (b), F.S.
44 Section 218.39(1)(g), F.S.
45 Section 218.39(2)-(7), F.S. See Report No. 2024-087, Review of Local Governmental Entity 2021-22 Fiscal Year Audit Reports
(December 2023), at https://flauditor.gov/pages/pdf_files/2024 -087.pdf (last visited January 30, 2024), for information regarding audits
of local governments.
46 Section 218.39(5), F.S.
47 Section 218.39(7), F.S.
48 Section 218.39(7), F.S.
49 Section 218.39(8), F.S.
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 Legislative Auditing Committee
The Legislative Auditing Committee is a joint committee of the Florida Legislature, established by the
Joint Rules of the Florida Legislature and s. 11.40, F.S., t