Sales Tax on Services Information

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Oppose revenue-based taxes on services provided by CPAs and CPA firms, including, but not limited to, a sales tax on those services.

Extending Existing Sales Tax to Non-Taxed Services Where Exclusion Fails to Serve Public Purpose

Initiative Directing Manner by Which Sales Tax Exemptions are Granted by the Legislature

Initiative Requiring Legislative Determination That Sales Tax Exemptions Serve a Public Purpose

2006 Summary

FICPA is a member of the Coalition to Protect Florida’s Economy which includes a total of 27 Business Groups, 14 of which are named parties to a lawsuit against FAIR’s attempt to repeal tax exemptions. We acted as the sole point of communication for the Coalition and helped fundraise nearly $150,000 to hire two legal teams that consisted of five attorneys.  We also coordinated all of the meetings and conference calls, sent nearly 30 e-mail updates and reviewed 27 legal briefs and summaries for the Coalition and the ones filed by FAIR for each amendment.

Three former elected officials proposed a constitutional amendment that would, if it had passed by voters in Nov. 2004, repealed all current sales tax exemptions and potentially tax professional services.  This proposed amendment was not approved by the Florida Supreme Court and did not appear on the November 2004 ballot.

In 2006, three separate proposed constitutional amendments are being proposed.

1. Require that any new sales tax exemption be approved in a bill that contains the single subject matter of a single exemption and a factual statement of the public purpose served by the exemption;

2. Require that all existing sales tax exemptions (except food, drugs, health care and residential rent and utilities) be reviewed by the Florida Legislature by July 1, 2008, and eliminated on January 1, 2009, unless the Legislature determines that a specific exemption serves a public purpose and re-enacts that specific exemption in a separate bill; and

3. Require that all services be taxed effective January 1, 2009, (except employee compensation and benefits); unless the Legislature determines that not taxing a specific service serves a public purpose and enacts a specific exemption for that service.

The three amendments reached the required number of signatures for review by the Attorney General; however, the Coalition to Protect Florida’s Economy is currently challenging two of the three amendments.  Most recently, the Coalition’s legal team filed additional briefs on the legal challenge.  Answer briefs were due April 17, and Reply briefs are due 10 days from the service of the Answer brief which would be April 27 if FAIR serves their answer briefs on the last day available to them.  On Monday, April 17, the legal team for the Coalition filed the Supplemental Answer Briefs in the Services Tax Case and the Sales Tax Case.  These briefs are responsive to the FAIR briefs filed that are directed to the date-specific issue contained in the proposed amendments. 

Per our legal team, the Court likely will not take any action until all the briefs have been filed.  After that time, our legal team will inform us as to whether they believe the Court will schedule oral arguments or rule on the cases without oral arguments. 

In addition, the need to continue meeting as the Coalition to Protect Florida’s Economy is very important even after the legal challenge has ended.  Many in the Coalition are concerned about what may develop during the 2007 Taxation and Budget Reform Commission and believe we should have a united front on the taxation issues that have brought our Coalition together.  This effort has involved just over 300 e-mails and 5 meetings of the Coalition.  We also discussed this issue with members of the legislature through our priority legislation talk sheet.