Vacation home owners avoiding other taxes?

[wrobert]

I was told today that many of the 2nd homeowners in the resort areas of Florida fail to remit the sales tax on the electric bills of their commercial enterprises, as required by FS. I know that a recent exemption was passed for manufacturing companies, but without an exemption for transient home rentals, how are owners justifying avoiding this tax?

 

[ShallowsNole]

Say that again? They have to remit sales tax on their electric bills? What about other utilities?

 

[wrobert]

Say that again? They have to remit sales tax on their electric bills? What about other utilities?

Commercial electricity is taxable. Motel/Hotel and other businesses pay it all the time. But when a home is built, they are installing them as residential, so it is up to the owner to collect and remit the tax since it is a commercial enterprise. Something I had not really thought about until a lengthy discussion with someone from FLDOR today.

I will have to look at my other utility bills.

 

[TooFarTampa]

If as a rental homeowner you are "selling" the electricity to the tenants ...
And electricity is considered part of the rental rate ...
And tax is collected on the rental rate and paid to the state ...

How is this a problem?

Otherwise, I am not understanding how the power service constitutes a "sale." Seems like it would be double taxation to pay an extra 7 percent on top of that for electrical service.

 

[scooterbug44]

Just how many different taxes are we losing money on because they are voluntary?

Someone said Florida wouldn't have to make any budget cuts if it collected the internet sales tax.

That said, unless they are charging a utilities fee, I don't understand why they would have to pay a tax on it.

 

[wrobert]

If as a rental homeowner you are "selling" the electricity to the tenants ...
And electricity is considered part of the rental rate ...
And tax is collected on the rental rate and paid to the state ...

How is this a problem?

Otherwise, I am not understanding how the power service constitutes a "sale." Seems like it would be double taxation to pay an extra 7 percent on top of that for electrical service.

You would think. But that is not the way the law reads, that is why manufacturers had to get a specific exemption.

I do not see how it is fair that any business is paying tax on it. It is all going into the final culmination of the sale.

 

[wrobert]

Just how many different taxes are we losing money on because they are voluntary?

Someone said Florida wouldn't have to make any budget cuts if it collected the internet sales tax.

That said, unless they are charging a utilities fee, I don't understand why they would have to pay a tax on it.

It is voluntary until audited and then you have 36 months of tax to pay. To go one step further if you are doing commercial activity out of your home, then really, you are liable for sales tax on that. Another nuance of sales tax law that I just did not understand. But it either needs to be eliminated or people need to pay it.

Things like this make the fair tax more appealing every day.

 

[Here4Good]

Chelco collects sales tax on my residential bill every month, there were almost $20 in taxes last month:

12/30/08 Gross Receipts Tax4.82 12/30/08 State Sales Tax15.44

Are you saying that since this is my primary residence I should not have to pay it?

 

[Smiling JOe]

I guess they need to define "commercial," if they haven't. A residential house, even if being rented, IMO, is not commercial.

Also, I think it would cost more to try to collect and enforce electric tax on rental units than it would take in.

 

[wrobert]

I guess they need to define "commercial," if they haven't. A residential house, even if being rented, IMO, is not commercial.

Also, I think it would cost more to try to collect and enforce electric tax on rental units than it would take in.

What if they have a license from DBPR? Would you then agree it were commercial?