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HomeMy WebLinkAboutR-2001-110 RESOLUTION NO. 2001-110 A RESOLUTION OF THE CITY COMMISSION OF DANIA BEACH, FLORIDA RELATING TO THE LOCAL COMMUNICATIONS SERVICES TAX RATE; PROVIDING FOR INTENT; PROVIDING FOR ELECTION NOT TO REQUIRE AND COLLECT PERMIT FEES, PROVIDING FOR ELECTION TO INCREASE LOCAL COMMUNICATIONS SERVICES TAX RATE; PROVIDING FOR NOTICE TO THE DEPARTMENT OF REVENUE; PROVIDING FOR SEVERABILITY; PROVIDING FOR CONFLICTS; PROVIDING AN EFFECTIVE DATE. WHEREAS, during the 2000 Regular Session, the Florida Legislature passed the Communications Services Tax Simplification Law, creating Chapter 202, Florida Statutes (2000); and WHEREAS, during the 2001 Regular Session, the Florida Legislature passed and the Governor thereafter signed Enrolled CS/CS/SB 1878 (the "Act"), that further amends Chapter 202, Florida Statutes (2000); and WHEREAS, section 9 of the Act amends Section 202.19(2), Florida Statutes (2000), to provide that municipalities may elect a local communications services tax rate, commencing October 1, 2001, of up to 5.1% for municipalities that have not chosen to levy permit fees, and a tax rate of up to 4.98%for municipalities that have chosen to levy permit fees; and WHEREAS, the maximum rate does not include an optional add on of up to 0.12% for municipalities that choose not to levy permit fees pursuant to section 337.401, Florida Statutes, nor do the rates supersede conversion or emergency rates authorized by section 202.20, Florida Statutes, which may be in excess of these maximum rates; and WHEREAS, section 12 of the Act amends Section 202.20(l)(a), Florida Statutes (2000), to set the local communications services tax conversion rates for the period of October 1, 2001, through September 30, 2002; and WHEREAS, section 12 of the Act further amends section 202.20(1)(b), Florida Statutes (2000), to set the local communications services tax conversion rates beginning October 1, 2002; and WHEREAS, Section 337.401(3)(c)l, Florida Statutes (2000), as amended by the Act, requires each municipality to make an election regarding the payment of permit fees by providers RESOLUTION NO. 2001-110 of communications services and to inform the Department of Revenue of the election by certified mail by July 16, 2001; and WHEREAS, pursuant to Section 202.20(1)(a), Florida Statutes (2000), as amended, the City of Dania Beach's local communications services tax conversion rate for the period October 1, 2001, through September 30, 2002, is 5.60% if the City does not require permit fees and 5.48% if the City does require permit fees from communications providers; and WHEREAS, pursuant to Section 202.20(1)(b), Florida Statutes (2000), as amended, the City of Dania Beach's local communications services tax conversion rate commencing October 1, 2002, is 5.20% if the City does not require permit fees and 5.08% if the City does require permit fees from communications providers; and WHEREAS, Section 337.401(3)(c)(1)(a), Florida Statutes (2000) provides substantial restrictions on permit fees that municipalities may charge communications providers, including a cap of$100 per permit; and WHEREAS, the City of Dania Beach has determined that it is in the best interests of the public and of the City not to charge communications providers permit fees authorized by Section 337.401, Florida Statutes, (2000) effective October 1, 2001, and to benefit from the higher local communications tax rate. NOW THEREFORE, BE IT RESOLVED BY THE CITY COMMISSION OF THE ® CITY OF DANIA BEACH, FLORIDA, AS FOLLOWS: Section 1. The foregoing "Whereas" clauses are hereby ratified and confirmed as being true and correct and are hereby made a specific part of this Resolution upon adoption hereof. Section 2. The City of Dania Beach hereby elects not to require permit fees on communications providers authorized by Section 337.401, Florida Statutes (2000), effective October 1, 2001. Section 3. Pursuant to Section 337.401(3)(c)l.b., Florida Statutes (2000), as amended by section 34 of the Act, the City of Dania Beach elects to further increase its local communications services tax rate by the amount of 0.12%. Section 4. Based on the above elections, the City of Dania Beach hereby adopts its combined local communications services tax rate, effective for the period October 1, 2001, and ending September 30, 2002, of 5.72%. Section 5. Pursuant to Section 202.20(1)(b), Florida Statutes, as amended by the Act, the City of Dania Beach hereby adopts the local communications services tax rate of 5.32%, effective October 1, 2002. 2 • Section 6. The City of Dania Beach directs the City Clerk to provide a copy of this Resolution to the Department of Revenue by certified mail prior to the deadline of July 16, 2001. Section 7. The provisions of this Resolution are declared to be severable and if any section, sentence, clause or phrase of this Resolution shall, for any reason, be held to be invalid or unconstitutional, such decision shall not affect the validity of the remaining sections, sentences, clauses, and phrases of this Resolution but shall remain in effect, it being the legislative intent that this Resolution shall stand notwithstanding the invalidity of any part. Section S. All Resolutions or parts of Resolutions in conflict herewith are hereby repealed to the extent of such conflict. Section 9. This Resolution shall take effect upon its adoption. ADOPTED by the City Commission of the City of Dania Beach, Florida this 26T" day of June 2001. Al� PATRICIAL FLURY MAYOR — COMMISSIONER ATTEST: ROLL CALL: COMMISSIONER BERTINO - YES COMMISSIONER MCELYEA - YES CHARLENE J SON COMMISSIONER MIKES - YES ACTING CITY C ERK VICE-MAYOR CHUNN - YES MAYOR FLURY - YES APPROVED �AS TO FO M AND CORRECTNESS: BY: TH MA JJANSBRO CITY ATTORNEY 566020resolutions/daniacommtaxreso6-13-01 • 3 0 • WeYs's Serota HT&H an .1 , Pasco za iN Guedes MEMORANDUM To: Honorable Mayor and Commissioners, City of Dania Beach CC: Jason Nunemaker, Acting City Manager Thomas J. Ansbro, City Attorney From: Gary Resnick and Francine Thomas Steelman, Office Of The City Attorney Date: June 13, 2001 Re: Communications Tax Resolution Background Last year, the Florida Legislature passed the Communications Services Tax Simplification Act, creating Chapter 202, Florida Statutes (2000). During the 2001 Session, the Florida Legislature passed and the Governor signed Enrolled CS/CS/SB 1878 (the "Act"), which • further amends Chapter 202, Florida Statutes (2000), and establishes the tax rates on communications services. The revenue from this tax will replace telecommunications taxes and franchise fees local governments currently receive from telecommunications and cable television providers. The Act requires each local government to make certain elections to establish its appropriate tax rate on communications services, effective October 1, 2001. The taxes will be collected by the Department of Revenue ("DOR") and distributed to local governments. The Act establishes two conversion rates for every local government to become effective October 1, 2001, and thereafter on October 1, 2002. © The first election for Dania Beach is whether to require permit fees on communications providers. There are substantial restrictions on the amount of permit fees, including a cap of $100 per permit. If the City requires permit fees, its tax rate is reduced substantially. The second decision for Dania Beach is whether to take advantage of an additional 0.12% that may be added to its tax rate if the City elects not to require permit fees. Analysis of Proposed Resolution The proposed Resolution provides for the election not to require permit fees on communications providers. The proposed Resolution also provides for the election to increase the tax rate to the maximum allowed under the Act, including taking advantage of the • additional 0.12%. Pursuant to the proposed Resolution, the City's tax rate on communications services will be 5.72% for the period October 1, 2001 - September 30, 2002, and 5.22% • commencing on October 1, 2002. The rate is higher the first year because the City will actually receive only 11 monthly payments. The Resolution directs the Clerk to send the Resolution to the Department of Revenue, by certified mail, by the deadline contained in the Act of July 16, 2001.' Recommendation We recommend that the City Commission pass the Resolution. • The address for mailing the Resolution is as follows: Revenue Accounting - Communications Services Tax Florida Department of Revenue 5050 W Tennessee St., Bldg I Tallahassee, FL 32399-0100 566020memos/memcommtaxreso-6-13-01 2 a WEISS SEROTA HELFMAN PASTORIZA & GUEDES, P.A. ATTORNEYS AT LAW MIAMI-DADE OFFICE NINA L.BONISKE MITCHELL J.BURNSTEIN 2665 SOUTH SAYSHORE DRIVE BROWARD OFFICE JAMIE ALAN COLE ELAINE M.COHEN SUITE 420 1132 SOUTHEAST SECOND AVENUE EDWARD G.GUEDES DOUGLAS R.GONZALES FORT LAUDERDALE, FLORIDA 33316 STEPHEN J. HELFMAN JOHN R.HEWN,JR. MIAMI, FLORIDA 33133 TELEPHONE (954) 763-4242 GILBERTO PASTORIZA CHRISTOPHER F.KURTZ• TELECOPIER (954)764-7770 JOSEPH H.SEROTA PETER A.LICHTMAN TELEPHONE (305)854-0800 RICHARD JAY WEISS KAREN LIEBERMAN* OF COUNSEL DAVID M.WOLPIN BERNARD S.MANDLER' TELECOPIER (305)854-2323 STEVEN W.ZELKOWITZ MARIE E. MATO NANCY RUSIN* WWW.WSH-FLALAW.COM THOMAS J.ANSBRO* GAIL D.SEROTA* LILLIAN ARANGO DE LA HOZ* ARI C.SHAPIRO RICHARD A.ARONSKY JEFFREY P.SHEFFEL (�Q PATRICIA M.BALOYRA NANCY E.STROUD• May 23, 20V !1 ALISON S.BIELER SUSAN L.TREVARTHEN MITCHELL A.BIERMAN DANIEL A.WEISS* 1 � 1 IVj y. Michael W. Smith, City Manager City of Dania Beach 100 West Dania Beach Boulevard Dania Beach, Florida 33004 Re: Simplified Communications Services Tax Act ® Dear Michael: • The Florida Legislature passed the Simplified Communications Services Tax Act (CS/CS/SB 1338) (the "Act") on the last day of its regular session. The Act is a comprehensive fiscal reform that will affect the revenue you currently receive through taxes, franchise fees and permit fees from communications services providers. In most cases, it will result in increased revenue because it captures some revenues that currently escape taxation and franchise fees by local governments. However, it will also eliminate local regulation of telecommunications services other than cable television and you should be informed as to its provisions. Accordingly, I have prepared the following-sumniary of the-Act for your review. Overview The Act, which will take effect on October 1, 2001, consolidates and simplifies the various fees and taxes communications providers currently pay to the state, counties and municipalities in which they provide services or occupy rights-of-way. It also provides for a single state telecommunications tax. It is intended to eliminate competitive disadvantages and "level the playing field" by equalizing the various charges paid by the different types of providers to state. and local government. As an example, cable operators currently pay maximum local franchise fees of 5% of gross revenues, while telecommunications providers pay a maximum fee of 1% of revenues from recurring charges. Providers who do not own facilities in the rights-of-way pay no franchise fees. The Act replaces these revenue sources Is with a single, uniform local tax applicable to all providers on an equal basis. r Michael W. Smith, City Manager City of Dania Beach May 23, 2000 Page 2 of 3 Tax hates The Act replaces seven current revenue sources with a single local tax. The replaced sources are the state sales tax, gross receipts tax, Half-cent Sales Tax Clearing Trust Fund, public service tax on telecommunications, franchise fees on telecommunications and cable television, and the local option sales tax. These are replaced with a two-tiered tax composed of a state tax and a local option tax on communications services. The rates will be set by a state Revenue Estimating Committee ("REC"). The REC will set an initial rate for each local government and a maximum rate applicable to all local governments. The initial rate will take effect automatically without action by the local government on October 1, 2001 and will be based on the municipality's revenue from communications service providers in the year ending October 1, 1999, adjusted by a factor representing expected growth. The maximum rate will be calculated to produce the revenues that could have been generated from all of the replaced revenue sources, assuming that all local taxing jurisdictions • had imposed every replaced revenue source in the manner and at the rate that would have produced the greatest amount of revenues as of July 1, 2000. Municipalities shall be entitled to impose a local tax up to the maximum rate. The tax will be collected by the Department of Revenue and remitted to the local governments. Exceeding the Maximum Under limited circumstances a municipality may exceed the maximum rate for a period of up to one year. If, during the first year of the simplified tax, a municipality's initial rate is insufficient !o recover the revenues from all replaced revenue sources in the corresponding quarterly period from the previous year, then the municipality may enact an emergency ordinance to adjust its rate to an amount sufficient to recover the shortfall. The adjusted rate shall become effective 90 days after enactment and shall be in effect for a maximum of one year. This is the only circumstance under which the local tax rate may exceed the statewide maximum tax rate. Tax Base The Act expands the base of taxable telecommunications services. All audio, visual and data communications delivered by wire, wireless or leased facilities will be taxed at the same rate. Presently, services provided over leased or wireless facilities often escape taxation or is franchise fees because the provider does not own any facilities in the right-of-way. The Act captures this lost revenue. Local authority to tax a service will be based on the situs of the service rather than the use of the right-of-way. T `'VEISS SEBOTA HELFMAN PASTORIZA & GUEDES, P.A. Michael W. Smith, City Manager City of Dania Beach May 23, 2000 Page 3 of 3 Reporting Requirements Each local government will be required to provide the REC with 1999 fiscal data regarding the amount of the replaced revenues collected. The information will be used to calculate the initial tax rate. The communications service providers will also provide the REC with data regarding the volume of their activity in each taxing jurisdiction as defined by the new tax base. Right-of-Way Management Municipalities retain the authority to manage and regulate all users of the rights-of-way, including communications services providers, under their police powers. However, municipalities will no longer have authority to require franchise agreements from telecommunications providers (telephone and wireless). Authority to require cable franchises, including all in-kind requirements, remain in effect as provided by Federal Law. Existing telecommunications franchise agreements will remain in place for their contractual terms with • the exception of the franchise fee provisions, which shall expire when the Simplified Tax takes effect. Municipalities may not require new telecommunications franchise agreements after January 1, 2001. Rights-of-way management issues may be addressed through general ordinances regulating the use of the rights-of-way by all users. Conclusion Notwithstanding its title, the Act is quite lengthy (163 pages!) and somewhat complicated. Accordingly, I am not enclosing a copy, but I would be-happy to provide one upon request. The Act will likely be legislatively revised prior to implementation and subject I- to further definition zn Department of Re>>e^ue fiegala+�::rs ar�:l US*s'onal law. Tleis is a rapidly changing field of law. I will keep you posted as to further developments. As always, please feel free to contact me if you have questions about this or any other matter. Sincerely, it hell AB-ierma-n MAB/jpm 566.001 cc: Thomas J. Ansbro, Esquire, City Attorney W E I S S S E R O TA H E L F M A N PASTORIZA & GUEDES, P.A.