ISSUE: Should the Florida Communications Service Tax (CST) be applied at the point of sale (POS) to certain prepaid calling plans, which are currently exempt from the CST but subject to the 6 percent state sales tax, plus applicable local option sales taxes.

DISCUSSION: The Florida Department of Revenue issued a Taxpayer Information Publication, dated March 27, 2012, which indicates that certain prepaid calling arrangements currently being sold by many retailers were not entitled to the exemption from the Communications Services Tax (CST) if the prepaid arrangement included more than just voice communications which declined in predetermined units. This pronouncement caused concern in the telecommunications industry since they had presumed that all prepaid arrangements sold at retail were only subject to the state and local option sales taxes. This concern led to the Legislature creating a working group of four telecommunications providers and four local government representatives, which was charged with bringing back suggestions for solving the collection problem. Their report is due by February 1, 2013 so that the 2013 Legislature will have time to evaluate the report and take any necessary legislative action. The Florida Retail Federation staff has been monitoring this working group and has provided testimony that the CST cannot be collected at the point of sale due to the complicated nature of the CST.

POSITION: The Florida Retail Federation will oppose any attempt to have retailers collect the CST on prepaid calling arrangements at the point of sale. The Communications Services Tax has too many complicated provisions which cannot be applied at the point of sale level. We encourage the Legislature to clarify that all prepaid calling arrangements are exempt from the CST and are subject to state and local sales taxes only, which are collected at the point of sale.

RELATED BILLS:  

SB 290 - Galvano
HB 435 - Davis

Recent Developments:

(2/15/2013)  We shared with you last week that the Communications Services Tax would be a hot topic this session. Things heated up this week with a committee hearing in the Senate Finance and tax committee and a draft bill that circulated in the House. There are a lot of players at the table: the telecommunication service providers, the local governments who depend on the CST revenue, and the retailers who sell these products. There are a lot of interests to balance, and we’ve got a long way to go until it all gets settled. Randy Miller testified in the Senate committee, sharing with the Senators that collection of this tax at the point of sale is not an option. If you sell prepaid wireless phone service or products, you’ll want to watch this issue closely. You can rest assured; we will be in the mix.

ISSUE: Should retailers be required to collect the E911 fee on the sale of prepaid wireless service at the point of sale.

DISCUSSION: There is a nationwide push for legislation requiring retailers to collect, at the point of sale, the E911 fee on prepaid wireless service. (Enhanced 911-- or E911 --service enables a wireless telephone to transmit a 911 caller’s location to emergency responders.) In the 2010 Legislative Session, the Florida Legislature chose a more measured approach and enacted a three year moratorium on the collection of this fee.
The moratorium is drawing to a close. Retailers continue to oppose the collection of this fee at the point of sale because we feel it is unfair for a retailer to absorb the cost and administrative burden of additional fee collections. However, many other states have mandated the collection of this fee at the point of sale. As a result, most retailers are capable of administering the requirement and are not actively opposing legislation that mandates collection of the fee. Point of sale collection legislation can and should include particular provisions that help defray costs and facilitate ease of collection, such as a collection allowance.

POSITION:  The Florida Retail Federation will not actively oppose E911 fee point of sale collection legislation that includes a collection allowance and other provisions to help defray costs and facilitate ease of collection. We continue to feel that the retail point of sale is not the proper place to collect state mandated fees.

ISSUE: Should plaintiffs be able to recover from portable gas can manufacturers and sellers if they are injured as a result of misusing the gas can.

DISCUSSION: Portable gas cans have become standard equipment for all types of disaster preparation and response, as well as a variety of home maintenance and recreational vehicle uses. Blitz USA and other portable gas can manufacturers voluntarily embraced all proven means for improving the safety and performance of their gas cans. Safety standards developed by the American Society for Testing and Materials (ASTM) have helped to mitigate the risks for consumers who follow safety guidelines.
However, no gas can or other product can protect against the devastating consequences of the uncontrolled combination of gasoline with fire. While NEISS data show the number of incidents involving gas cans has steadily declined, the number of lawsuits and the amounts paid in settlements by liability carriers has increased, especially after a significant number of additional lawsuits which were filed in 2011. As a direct result of these lawsuits, gas can manufacturer Blitz USA declared bankruptcy and closed its doors in 2012.
Until its closing, Blitz USA manufactured 75 percent of the portable gas cans sold in the United States each year. With its exit from the market, there is the potential for a major shortage in the supply of portable gas cans. In the event of an emergency, such as the recent Hurricane Sandy, lack of availability of approved portable gas cans could create significant additional risks for impacted citizens.

POSITION: Until the Consumer Product Safety Commission adopts and enforces an industry standard, manufacturers and sellers of portable gas cans are vulnerable to liability. Adopting a limited waiver of liability in the event a gas can is misused will protect gas can manufacturers and sellers from spurious litigation, and help ensure the supply of a necessary product.

RELATED BILLS:

HB 103 - Hooper

Recent Developments:

(4/5/2013) HB 103 by Rep. Ed Hooper, was heard in a workshop in the House Civil Justice Subcommittee this week. This workshop laid the groundwork for this bill for next session.