Abstract

This special report describes the basic structure and operation of the Florida sales tax as adopted in its final form by the Florida Legislature on June 6, 1987 in order to clear up confusion about the tax. It begins by addressing the amount of controversy that the recently enacted sales and use tax on services has created and states that much of the controversy is based on confusion over what the law actually says and how it works. Next, the report goes into the operation of the statute and stresses that the tax applies only to services that are consumed in the state. The report acknowledges that a state may not impose a tax, or the obligation to collect a tax, upon one with whom the state lacks a sufficient nexus. It then addresses the collection of the tax and goes in depth into the two exemptions to the tax. Next, the report discusses particularized treatment of special industries by primarily focusing on advertising services furnished by the media. The report then addresses savings provisions that ensure that the sales and use tax is construed to comply with constitutional constraints. The report concludes by stating that a more in-depth analysis of the sales tax with be conducted in the future and emphasizing that this report is only an initial summary of the law and its possible effects.

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