2024 General Administration Tax Law Changes

In general, subdivision (4) requires the Department to assess a penalty for failure to pay tax when due if the tax shown due on a return is not paid by the due date of the return.

The 2021 General Assembly enacted legislation to change the calculation of the penalty from a flat rate of ten percent (10%) to a graduated rate (two percent, 2%, for the first month the tax is not paid, increased by two percent, 2%, for each succeeding month, not to exceed ten percent, 10%.) The change was to be effective for taxes assessed on or after July 1, 2022.

The 2022 General Assembly later amended this subdivision to:

(1) Continue the current penalty rate of ten percent (10%) through December 2022; 
(2) Temporarily reduce the penalty rate to five percent (5%) from January 2023 to June 2024; and 
(3) Reintroduce the graduated penalty rate in July 2024.

(Effective June 30, 2022; HB 83, s. 5.6.(a), S.L. 2022-13. Effective January 1, 2023, and applies to tax assessed on or after that date; H83, s. 5.6.(b), S.L. 2022-13. Effective July 1, 2024, and applies to tax assessed on or after that date; H83 s. 5.6.(c), S.L. 2022-13.)

The 2024 General Assembly further amended this subdivision to extend the effective date to reintroduce the graduated penalty rate from July 2024 to July 2027.

(Effective July 1, 2024; HB 228, s. 4.1., S.L. 2024-28.)

The 2024 General Assembly amended this subdivision to impose a civil penalty for the misuse of an affidavit of capital improvement by the purchaser. 

(a) Penalties: The subdivision now provides, in part, the following: “the following civil penalties and criminal offenses apply:

(5a) Misuse of Exemption Certificate or Affidavit of Capital Improvement. – For misuse of an exemption certificate or affidavit of capital improvement by a purchaser, the Secretary shall assess a penalty equal to two hundred fifty dollars ($250.00). . . An affidavit of capital improvement substantiates that a contract, or a portion of work to be performed to fulfill a contract, is to be taxed for sales and use tax purposes as a real property contract.” [Emphasis added.]

(Effective July 1, 2024; HB 228, s. 2.4., S.L. 2024-28.)

The 2024 General Assembly amended this subdivision to provide a new exception to the general statute of limitations following certain refund claims.

(5) Sales and Use Customer Refund: This subdivision now provides: “If a purchaser receives a refund from a seller of sales and use tax paid to the seller, the period for proposing an assessment against the customer of any tax refunded is three years after the date of the refund.”

(Effective July 1, 2024, and applies to assessments not barred by the statute of limitations prior to that date; HB 228, s. 2.3(a)., S.L. 2024-28.)

This subdivision allows the Department to exchange information with certain agencies when the information is needed to fulfill a duty. One of those agencies is the State Highway Patrol.

The 2024 General Assembly passed legislation to make the State Highway Patrol an independent, cabinet-level department. This subdivision was amended to remove a reference to the Department of Public Safety.

(Effective July 1, 2025; SB 382, s. 3E.2.(w), S.L. 2024-57.)