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When Not To Pay a Local Business Tax

A Local Business tax is a miscellaneous tax imposed by local governments in Florida. Payment of the Local Business Tax allows you the right to do business in that county or municipality and is paid annually with the fiscal year beginning October 1 through September 30. This is a tax, not a license or competency card. Many contractors throughout the state may be unwittingly paying for a local business tax when they don’t have to. The following will give you a history of the tax as well as exemptions from taxation for certain businesses.

Chapter 205, Florida Statute, provides that the governing body of a county may levy, by appropriate resolution or ordinance, a business tax for the privilege of engaging in or managing any business, profession or occupation within its jurisdiction. Most counties and municipalities in Florida elected to collect Local Business Taxes (formerly known as Occupational License) when the state turned it over to local governments in 1972. In 2006, the Florida legislature renamed the Local Occupational License Tax to Local Business Tax (Chapter Law 2006–152). The change was made because the legislature found the reference to an occupational license was confusing to consumers and was not the correct characterization of the tax. It further found that unscrupulous persons presented a local occupational license to consumers as proof of competency to perform various repairs and service. Consumers were being victimized by these representations. By changing the name of the tax issued by local governments, the legislature believed it would go a long way in eliminating some fraudulent misrepresentation of this tax.

In 1992, s. 205.065, F.S., was created which provided that the local jurisdictions could not charge businesses regulated under the Department of Business and Professional Regulation (DBPR) a local business tax simply because the business was performing work in that jurisdiction. Instead, the ability to charge a local business tax was to be conditioned on having a place of business located within that jurisdiction. This means that a glass and glazing contractor, for instance, located in Orange County , could not be charged a business tax by Seminole County simply because the contractor performs work in that jurisdiction. In 1999, the Florida legislature further amended that section of law (Chapter Law 99–254) to provide that a contractor who has been subjected to an unlawful levy of a business tax may challenge the local government’s actions. If the contractor prevails, they are entitled to recover his or her reasonable attorney’s fees.

In conclusions, be sure you’re not paying local governments a local business tax that they are not entitled to under Florida law. Don’t be coerced by local governments that demand you pay before you
play . . . know the law.

Below is a copy of s. 205.065, F.S., for your reference.

205.065 Exemption; nonresident persons regulated by the Department of Business and Professional Regulation.—If any person engaging in or managing a business, profession, or occupation regulated by the Department of Business and Professional Regulation has paid a business tax for the current year to the county or municipality in the state where the person’s permanent business location or branch office is maintained, no other local governing authority may levy a business tax, or any registration or regulatory fee equivalent to the business tax, on the person for performing work or services on a temporary or transitory basis in another municipality or county. Work or services performed in a place other than the county or municipality where the permanent business location or branch office is maintained may not be construed as creating a separate business location or branch office of that person for the purposes of this chapter. Any properly licensed contractor asserting an exemption under this section who is unlawfully required by the local governing authority to pay a business tax, or any registration or regulatory fee equivalent to a business tax, has standing to challenge the propriety of the local government’s actions, and the prevailing party in such a challenge is entitled to recover a reasonable attorney’s fee.

History.—s. 32, ch. 92–203; s. 11, ch. 94–18; s. 1484, ch. 95–147; s. 6, ch. 99–254; s. 18, ch. 2006–152.

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