HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/CS/HB 1041 Tax Administration
SPONSOR(S): Appropriations Committee, Ways & Means Committee, Stevenson
TIED BILLS: IDEN./SIM. BILLS: CS/SB 1382
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 12 Y, 0 N, As CS LaTorre Aldridge
2) Appropriations Committee 23 Y, 0 N, As CS Trexler Pridgeon
SUMMARY ANALYSIS
The bill makes the following tax administration changes:
Administrative Updates
 Authorizes the Department of Revenue (Department) to respond to contact initiated by taxpayers to
discuss audits.
 Provides the Department with the discretion to assist taxpayers by reopening a closed audit protest or
refund denial case in specified circumstances.
 Requires the Department to provide a taxpayer with the ability to hold a conference to discuss audit
findings, and extends the tolling period to issue an assessment if a taxpayer provides additional data
during one of these conferences.
 Revises the period in which, and conditions under which, the Department may adopt emergency rules ;
provides clarifying language for existing rulemaking authority.
 Authorizes the Department to include all additional daily accrued interests, costs, and fees authorized
by law to be included in garnishment levy; and to deliver notices of levy by electronic means.
 Creates a temporary workgroup to analyze the Department’s audit and inspection procedures.
Recordkeeping and Administrative Subpoenas
 Creates a rebuttable presumption that failure to provide adequate records when requested by the
Department is evidence of willful neglect for purposes of applying or compromising penalties, and
prohibits taxpayers from using such records in subsequent tax proceedings.
 Provides that failure of a taxpayer to provide documents requested by a subpoena allows the
Department to estimate assessments, and creates a rebuttable presumption that the resulting
assessment is correct and that the requested documents would be adverse to the taxpayer’s position.
 Updates conditions and methods by which the Department may serve subpoenas on businesses
registered with the Department; and extends the tolling of the statute of limitations upon receipt of
written objections to a subpoena, and for the entire pendency of any action that seeks an order to
enforce compliance with, or to challenge any subpoena issued by, the Department.
 Provides for an alcoholic beverage dealer’s ability to hold a resale certificate to be suspended if the
dealer is found to have substantial noncompliance with statutory recordkeeping requirements under
specified circumstances.
Technical Changes
 Removes obsolete language for the pollutant tax registration fee repealed in 2017; clarifies conditions
for affidavits related to the sales tax exemption for certain nonresident purchasers of boats or aircraft;
removes outdated references to the “completed contract” method of accounting under an obsolete
Treasury Regulation; requires publication of a list of dealers with suspended resale certificates; makes
clarifying changes to ensure accurate calculation of Reemployment Tax rates; and requires the
Department to participate in the US Treasury Offset Program, consistent with federal law.
The Revenue Estimating Conference estimated that the provisions of the bill will have a recurring zero/positive
indeterminate impact on state and local government revenues.
The bill is effective July 1, 2022.
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:
Exclusion of Records from Chapter 120 Proceedings
Current Situation
Section 72.011(1)(a), F.S., provides that a taxpayer may contest the legality of any assessment or
denial of refund of tax, fee, surcharge, permit, interest, or penalty provided for the revenue laws of the
state. However, once an action has been initiated under s. 120.56, s. 120.565, s. 120.569, s. 120.57, or
s. 120.80(14)(b), F.S., no action relating to the same subject matter may be filed by the taxpayer in
circuit court, judicial review shall be exclusively limited to appellate review pursuant to s. 120.68, F.S.;
and once an action has been initiated in circuit court, no action may be brought under ch. 120, F.S.
Effect of Proposed Changes
Sections 72.011(1)(c) and 120.80(14)(b), F.S., are amended to prohibit the use of records in civil or
administrative litigation if the records were available to the taxpayer, or were supposed to be kept by
taxpayer, and the taxpayer withheld them from the Department of Revenue (Department) after formal
demand for records or subpoena unless the taxpayer demonstrates to the court or presiding officer
good cause for the taxpayer's failure to previously provide such records to the Department. Good
cause may include, but is not limited to, circumstances where a taxpayer was unable to originally
provide records under extraordinary circumstances as defined in s. 213.21(10)(d)2. The bill does not
prohibit the offering of records where the records were not available at the time of the demand or
subpoena unless the records were required to be kept by the taxpayer and the taxpayer failed to keep
the records.
Preparation for Audit
Current Situation
The Department has the authority to audit and examine the accounts, books, or records of all persons
who are subject to the revenue laws of this state.1 The Department states that it audits businesses to
find out whether state taxes were collected, reported, and paid correctly. Although an audit is an
enforcement tool to monitor and evaluate tax compliance, it can also be educational and promote
voluntary compliance. During an audit, the Department can help businesses identify and correct
bookkeeping problems that could cause additional tax liabilities. 2 Under current law, for
communications services tax and sales tax the Department must wait 60 days after sending a notice of
intent to audit before initiating the audit.3
Effect of Proposed Changes
The bill creates ss. 202.34(4)(f), and 212.13(5)(f), F.S., to clarify that the Department may, at any time,
respond to contact initiated by a taxpayer to discuss an audit. Those provisions also authorize the
Department to examine, at any time, documentation and other information voluntarily provided by the
taxpayer, information it already has in its possession or other publically available information. Such
examination does not commence an audit within 60 days of the notice of intent to conduct an audit.
Demand for Records/Subpoena/Tolling
1 Section 213.34, F.S.
2 What to Expect from a Florida Tax Audit, available at https://floridarevenue.com/taxes/compliance/Pages/audit.aspx ,
(last visited January 6, 2022).
3 Sections 202.34(4)(a) and 212.13(5)(a), F.S.
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 Current Situation
The Department has the authority to issue an administrative subpoena when a taxpayer refuses to
provide records after other efforts have failed.4 When a subpoena is issued, a taxpayer, and/or a
recipient of the subpoena, have the right to respond with objections. 5 Service must be made according
to the Florida Rules of Civil Procedure, and notice of a third party subpoena has to be provided to the
taxpayer within three days of issuance.6 Production can be due no sooner than within 20 days of
service, while objections must be made within 14 days of service. If objections are served, the
Department has to enforce the subpoena in circuit court, which can defeat the purpose of the subpoena
by running out the one-year statute of limitations to issue an assessment.7
Effect of Proposed Changes
The bill amends ss. 202.36, 206.14, 211.125, 212.14, and 220.735, F.S., to provide that the failure of a
taxpayer to provide documents available to, or required to be kept by, the taxpayer and requested by a
subpoena create a rebuttable presumption that the resulting proposed final agency action by the
Department, as to the requested documents, is correct and that the requested documents would be
adverse to the taxpayer’s position as to the proposed final agency action. The Department may use
estimates for purposes of assessment if a taxpayer fails to provide documents requested by a
subpoena. The Department must inform the taxpayer of the reason for the estimate and the information
and methodology used to derive the estimate.
The bill amends s. 213.345, F.S., to extend the tolling of the statute of limitations upon receipt of written
objections to the subpoena and for the entire pendency of any action that seeks an order to enforce
compliance with, or to challenge any subpoena issues by, the Department to avoid running out the
statute of limitations and allow the taxpayer time to challenge the subpoena or respond to the demand
for records.
Pollutant Tax Registration Fee
Current Situation
Under current law, any person producing in, importing into, or causing to be imported into this state
taxable pollutants for sale, use, or otherwise and who is not registered or licensed is required to register
and become licensed. Such person must register as either a producer or importer of pollutants and is
subject to all applicable registration and licensing provisions of ch. 206, F.S. Registrations are to be
made prior to the first production or importation of pollutants for businesses created after July 1, 1986.
Failure to timely register is a misdemeanor of the first degree. A registration fee of $30 was repealed in
2017.8
Effect of Proposed Change
The bill amends s. 206.9931(1), F.S., to remove obsolete language for the pollutant tax registration fee
repealed in 2017.
Affidavit for Non-Resident Purchaser of Boat/Aircraft
Current Situation
4 See ss. 202.36, 206.14, 211.125, 212.14, and 220.735, F.S., for such authority for communications services tax, motor
fuel taxes, severance taxes, sales tax and corporate income tax, respectively.
5 Section 202.36(4)(a), F.S. and Section 212.14(7)(a), F.S.
6 Florida Rules of Civil Procedure, available at https://www-media.floridabar.org/uploads/2021/11/ Civil-Procedure-Rules-
Updated-11-15-2021.pdf (last visited January 6, 2022).
7 Section 213.345, F.S.
8 Chapter 2017-36, Laws of Florida.
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 Under current law, nonresident purchasers of boats/aircrafts qualify for a sales tax exemption, provided
that certain application requirements are met.9 One of the requirements is that nonresident purchasers
of boats/aircrafts must provide the Department an original signed affidavit attesting that he or she read
the provisions of s. 212.05, F.S. That statute provides for the exemption and includes the process to
document the purchaser’s qualification for the exemption. The statutory affidavit requirement does not
require that the purchaser understand the exemption or documentation requirements, or that they attest
they will comply with the provisions.
Effect of Proposed Change
The bill removes the requirement that nonresident purchasers attest to having read statutory provisions
and replaces it with the requirement that nonresident purchasers complete an affidavit that affirms that
the nonresident purchaser qualifies for the exemption from sales tax pursuant to s. 212.05(1)(a)2., F.S.,
and attests that the nonresident purchaser will provide the documentation necessary to substantiate its
qualification for the exemption.
Liquor, Beer, and Wine Retailer’s Failure to Collect Tax/Failure to Produce Records
Current Situation
Section 212.13(2), F.S., provides that dealers must maintain records as required by the Department for
the reasonable administration of ch. 212, F.S.
Pursuant to s. 561.55, F.S., each manufacturer, distributor, broker, sales agent, importer, and exporter
must keep a complete and accurate record and make reports showing the amount of:
 Beverages manufactured or sold within the state and to whom sold;
 Beverages imported from beyond the limits of the state and to whom sold; and
 Beverages exported beyond the limits of the state, to whom sold, the place where sold, and the
address of the person to whom sold.
Section 561.29, F.S., provides the Division of Alcoholic Beverages and Tobacco of the Department of
Business and Professional Regulation (Division) the authority to revoke or suspend the license of any
person holding a license under the Beverage Law under specified circumstances.
Effect of Proposed Change
The bill creates s. 212.13(2)(b), F.S., to require the Department to suspend a dealer’s privilege to hold
a resale certificate and purchase products tax exempt for resale under specified circumstances. If,
during the course of an audit, the Department makes a formal demand for records and a dealer fails to
comply with the demand, the Department may issue a written request for such records to the dealer,
allowing the dealer an additional 20 days to provide the requested records or show reasonable cause
why the records cannot be produced. If the dealer fails to produce the requested records or show
reasonable cause as to why the records cannot be produced, the Department may issue a notice of
intent to suspend the dealer's resale certificate. The dealer has 20 days to file a petition with the
Department challenging the proposed action pursuant to s. 120.569, F.S. If the dealer fails to timely file
a petition or the Department prevails in a proceeding challenging the notice, the Department shall
suspend the resale certificate.
The bill specifies that if a dealer's resale certificate is suspended during the dealer's first sales and use
tax audit before the Department, the dealer's failure to comply is also deemed sufficient cause under s.
561.29(1)(a), F.S., for the Division to suspend the dealer's license. The Department must promptly
notify the dealer of such failure and notify the Division for appropriate action. The Division must lift the
suspension of the license, and the Department must lift the suspension of the license of the resale
certificate if the dealer either provides the necessary records to conduct the audit before the
Department issues an estimated assessment; posts a bond with the Department in the amount of an
9 Section 212.05, F.S.
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 estimated assessment to ensure payment of the assessment; or fully pays any tax, penalties, and
interest owed.
The bill provides that if a dealer's resale certificate is suspended and the audit is not the dealer's first
sales and use tax audit before the Department, such failure is sufficient cause under s. 561.29(1)(a) for
the Division to revoke the dealer's license and the Department shall promptly notify the Division and the
dealer of such failure for appropriate action by the Division.
The bill defines the following terms:
 “Dealer" means a dealer, as defined in s. 212.06(2), who is licensed under chapter 561.
 "Division" means the Division of Alcoholic Beverages and Tobacco of the Department of
Business and Professional Regulation.
 "Transferor" means an entity or person, licensed under chapter 561, who sells and delivers
alcoholic beverages to a dealer for purposes of resale.
The bill requires the Department to notify the Division when a dealer's resale certificate has been
suspended and to publish a list of dealers whose resale certificates have been suspended. The bill
requires the Division to include notice of the suspension in its license verification database, or provide a
link to the Department's published list from the Division's license verification page.
The bill limits the time period for a transferor to accept orders from or deliver alcohol beverages to a
dealer to no more than 7 days, inclusive of any Saturday, Sunday, or legal holiday, after the date the
Department publishes the list identifying that the dealer's resale certificate has been suspended.
The bill provides that a transferor who sells alcoholic beverages to a dealer whose resale certificate has
been suspended is not responsible for any tax, penalty, or interest due if the alcoholic beverages are
delivered no more than 7 days, inclusive of any Saturday, Sunday, or legal holiday, after the date the
Department publishes the list identifying that the dealer's resale certificates has been suspended.
Emergency Rule/ Rule Making Authority
Curr