HOUSE OF REPRESENTATIVES STAFF ANALYSIS
BILL #: CS/HB 205 Tax Exemption for Charges for Private Investigations
SPONSOR(S): Ways & Means Committee, Gossett-Seidman and others
TIED BILLS: IDEN./SIM. BILLS: SB 116
REFERENCE ACTION ANALYST STAFF DIRECTOR or
BUDGET/POLICY CHIEF
1) Ways & Means Committee 20 Y, 0 N, As CS LaTorre Aldridge
2) Regulatory Reform & Economic Development
Subcommittee
3) Commerce Committee
SUMMARY ANALYSIS
Florida levies a six percent sales and use tax on the sale or rental of most tangible personal property,
admissions, transient rentals, and a limited number of services. Chapter 212, F.S., contains provisions
authorizing the levy and collection of Florida’s sales and use tax, as well as the exemptions and credits
applicable to certain items or uses under specified circumstances. Sales tax is added to the price of the taxable
good or service and collected from the purchaser at the time of sale.
Currently, charges for certain detective, burglar protection, and other protection services listed under specific
North American Industry Classification System (NAICS) numbers, including investigative services, security
guards and patrol services, armored car services, and security systems services, except locksmiths, are
subject to sales and use tax.
The bill exempts charges for private investigative services provided by a small private investigative agency
from the sales and use tax.
The bill defines the term "small private investigative agency" as a licensed private investigator that employs
three or fewer full-time or part-time employees and, during the previous calendar year, performed private
investigation services in which the charges for the services performed were less than $150,000.
The Revenue Estimating Conference estimated that for FY 2023-24, the provisions of the bill would have -$1.2
million cash and a -$1.3 million recurring impact on General Revenue; an insignificant negative impact on state
trust funds; and a -$0.3 million cash and -$0.3 million recurring impact on local government revenues.
The bill provides emergency rulemaking authority for the Department of Revenue.
The effective date of the bill is July 1, 2023.
This docum ent does not reflect the intent or official position of the bill sponsor or House of Representatives .
STORAGE NAME: h0205a.WMC
DATE: 3/30/2023
 FULL ANALYSIS
I. SUBSTANTIVE ANALYSIS
A. EFFECT OF PROPOSED CHANGES:
Current Situation
Florida Sales and Use Tax
Florida levies a six percent sales and use tax on the sale or rental of most tangible personal property, 1
admissions,2 transient rentals,3 and a limited number of services. Chapter 212, F.S., authorizes the levy
and collection of Florida’s sales and use tax and provides the exemptions and credits applicable to
certain items or uses under specified circumstances. Sales tax is added to the price of the taxable good
or service and collected from the purchaser at the time of sale. 4
Counties are authorized to impose local discretionary sales surtaxes in addition to the state sales tax. 5
A surtax applies to “all transactions occurring in the county which transactions are subject to the state
tax imposed on sales, use, services, rentals, admissions, and other transactions by [ch. 212, F.S.], and
communications services as defined in ch. 202, F.S.”6 The discretionary sales surtax is based on the
tax rate imposed by the county where the taxable goods or services are sold or delivered. Discretionary
sales surtax rates currently being levied vary by county in a range of 0.5 to 1.5 percent.7
Currently, charges for detective, burglar protection, and other protection services listed under the North
American Industry Classification System (NAICS) National Numbers 561611 (investigative services),
561612 (security guards and patrol services), 561613 (armored car services), and 561621 (security
systems services, except locksmiths) are subject to the 6 percent sales and use tax. 8 Fingerprint
services required under s. 790.06, F.S., or s. 790.062, F.S., are not subject to the tax.
Law enforcement9 and public safety services are not subject to tax irrespective of whether the duty is
characterized as “extra duty,” “off-duty,” or “secondary employment,” and irrespective of whether the
officer is paid directly or through the officer’s agency by an outside source.
Charges for detective, burglar protection, and other protection security services performed in this state
but used outside this state are exempt from taxation. Charges for detective, burglar protection, and
other protection security services performed outside this state and used in this state are subject to
tax.10
1 S. 212.05(1)(a)1.a., F.S.
2 S. 212.04(1)(b), F.S.
3 S. 212.03(1)(a), F.S.
4 S. 212.07(2), F.S.
5 S. 212.055, F.S.
6 Section 212.054(2)(a), F.S.
7 Office of Economic and Demographic Research, Florida Tax Handbook, 231-232 (2022),
http://edr.state.fl.us/Content/revenues/reports/tax-handbook/taxhandbook2022.pdf (last visited Jan. 30, 2023).
8 S. 212.05(1)(i)1., F.S.
9 S. 943.10(1), F.S., defines “law enforcement officer” as any person who is elected, appointed, or employed full time by any
municipality or the state or any political subdivision thereof; who is vested with authority to bear arms and make arrests; and whose
primary responsibility is the prevention and detection of crime or the enforcement of the penal, criminal, traffic, or highwa y laws of
the state.
10 S. 212.05(1)(i)3., F.S.
STORAGE NAME: h0205a.WMC PAGE: 2
DATE: 3/30/2023
 Private Investigative Services
The Division of Licensing within the Department of Agriculture and Consumer Services (DACS)
oversees the regulation of licensing of private investigative services. 11 As of December 31, 2022, the
Division has issued 2,689 private investigative agency licenses and 7,136 private investigator
licenses.12
A “private investigator” is defined as any individual who, for consideration, advertises as providing or
performs private investigations.13 A “private investigative agency” means any person who, for
consideration, advertises as providing or is engaged in the business of furnishing privation
investigations.14 “Private investigation” is defined as an investigation to obtain information on any of the
following matters:
 Crime or wrongs done or threatened against the United States or any state or territory of the
United States, when operating under express written authority of the governmental official
responsible for authorizing such investigation.
 The identity, habits, conduct, movements, whereabouts, affiliations, associations, transactions,
reputation, or character of any society, person, or group of persons.
 The credibility of witnesses or other persons.
 The whereabouts of missing persons, owners of unclaimed property or escheated property, or
heirs to estates.
 The location or recovery of lost or stolen property.
 The causes and origin of, or responsibility for, fires, libels, slanders, losses, accidents, damage,
or injuries to real or personal property.
 The business of securing evidence to be used before investigating committees or boards of
award or arbitration or in the trial of civil or criminal cases and the preparation thereof.15
Applicants for licensure as a private investigator must complete and submit an application to DACS and
meet certain requirements. An applicant must:
 Be at least 18 years old;
 Be one of the following:
o A United States citizen,
o A permanent legal resident, or
o A holder of a work visa from the United States Citizenship and Immigration Service;
 Have no disqualifying criminal history;
 Be of good moral character;
 Have no history of:
o Mental illness,
o Alcohol abuse, or
o Substance abuse; and
 Submit an application with certain identifying information; 16 and
 Complete 40 hours of required training and submit proof thereof to DACS. 17
Any person, firm, company, partnership, or corporation which engages in business as a private
investigative agency shall have a Class “A” license. 18 To become a private investigator in Florida, a
Class “C” Private Investigator license is required.19 An applicant for the Class "C" Private Investigator
license must have two years of lawfully gained, verifiable, full-time experience to qualify for the
11 Ch. 493, F.S.
12 Department of Agriculture and Consumer Services, Division of Licensing Statistical Reports (as of December 31, 2022), available
at https://www.fdacs.gov/Divisions-Offices/Licensing/Statistical-Reports (last visited Jan. 28, 2023).
13 S. 493.6101(16), F.S.
14 S. 493.6101(15), F.S.
15 S. 493.6101(17), F.S.
16 S. 493.6105, F.S.
17 S. 493.6303(4)(a), F.S.
18 S. 493.6201(1), F.S.
19 S. 493.6201(5), F.S.
STORAGE NAME: h0205a.WMC PAGE: 3
DATE: 3/30/2023
 license.20 In order to carry a firearm in the course of performing such duties, the licensee must also
obtain a Class “G” Statewide Firearm license in addition to the Class “C” Private Investigator license. 21
Effect of Proposed Changes
The bill exempts charges for investigative services provided by a “small private investigative agency”
from the sales and use tax.
The bill defines the term "small private investigative agency" as:
A private investigator licensed as under s. 493.6201, F.S., that:
 Employs three or fewer full-time or part-time employees, including those performing
services pursuant to an employment leasing arrangement as defined in s. 468.520(4),
F.S., and
 During the previous calendar year, performed private investigation services otherwise
taxable under ch. 212, F.S., in which the charges for the services performed were less
than $150,000 for all its businesses related through common ownership.
The exemption does not apply in the first calendar year that an agency conducts sales of
services taxable under ch. 212, F.S.
The bill grants emergency rulemaking authority to the Department of Revenue.
The bill takes effect July 1, 2023.
B. SECTION DIRECTORY:
Section 1: Amends s. 212.08, F.S., to exempt private investigative services provided by a small
private investigative agency.
Section 2: Provides emergency rulemaking authority for the Department of Revenue.
Section 3: Provides an effective date.
II. FISCAL ANALYSIS & ECONOMIC IMPACT STATEMENT
A. FISCAL IMPACT ON STATE GOVERNMENT:
1. Revenues:
The Revenue Estimating Conference estimated that for FY 2023-24, the provisions of the bill would
have -$1.2 million cash and a -$1.3 million recurring impact on General Revenue and an
insignificant negative impact on state trust funds.
2. Expenditures:
None.
B. FISCAL IMPACT ON LOCAL GOVERNMENTS:
1. Revenues:
The Revenue Estimating Conference estimated that for FY 2023-24, the bill would have a -$0.3
million cash and -$0.3 million recurring impact on local government revenues.
20 S. 493.6203, F.S.
21 S. 493.6115(2), F.S.
STORAGE NAME: h0205a.WMC PAGE: 4
DATE: 3/30/2023
 2. Expenditures:
None.
C. DIRECT ECONOMIC IMPACT ON PRIVATE SECTOR:
Charges for private investigations provided by small private investigative agencies will be exempt from
sales tax.
D. FISCAL COMMENTS:
None.
III. COMMENTS
A. CONSTITUTIONAL ISSUES:
1. Applicability of Municipality/County Mandates Provision:
Not applicable. This bill does not appear to require counties or municipalities to spend funds or take
action requiring the expenditure of funds; reduce the authority that counties or municipalities have to
raise revenues in the aggregate; or reduce the percentage of state tax shared with counties or
municipalities.
2. Other:
None.
B. RULE-MAKING AUTHORITY:
The bill provides the Department of Revenue emergency rulemaking authority.
C. DRAFTING ISSUES OR OTHER COMMENTS:
None.
IV. AMENDMENTS/COMMITTEE SUBSTITUTE CHANGES
On March 30, 2023, the Ways & Means Committee adopted one amendment and reported the bill
favorably as a committee substitute. The committee substitute differs from HB 205 by clarifying that a
private investigative agency is not permanently exempted from the sales tax because it qualified for the tax
exemption in the previous year. The committee substitute also provides that a business is not exempt the
first calendar year the agency conducts sales of services taxable.
The analysis is drafted to the committee substitute as passed by the Ways & Means Committee.
STORAGE NAME: h0205a.WMC PAGE: 5
DATE: 3/30/2023