Does a Florida home-based professional owe city business tax if they already paid a business tax to another county?

Plain-English summary

A Dade City clerk asked the Attorney General's office a question many home-based professionals and small cities run into. A resident runs a medical-physics practice regulated by the Department of Business and Professional Regulation (DBPR). His corporate filings, website, business cards, and voicemail all list his Dade City home as his place of business, but he actually works outside the city and the county, and he has paid a business tax in another county where he also owns property. Does he owe Dade City's local business tax?

The answer turns on a single concept: whether the business has a "permanent business location or branch office" in the city. Section 205.042 lets a municipality tax anyone who maintains a permanent business location or branch office within the city. Section 205.065 then limits that power for DBPR-regulated businesses: if such a business has paid a business tax to the county or municipality where its permanent location is, no other local government may tax it for working in their area on a temporary or transitory basis. Doing work in another city does not, by itself, create a separate business location there.

So a city may not tax a regulated business that (1) only works within the city without a permanent location or branch office there, and (2) has paid a business tax to the jurisdiction where its permanent location is. If a regulated business does not meet both conditions, it remains liable for the city's tax. The catch is the fact-intensive part: deciding whether a particular setup (here, a home listed as the business address) actually amounts to a "permanent business location" is a mixed question of law and fact that the Attorney General's office cannot resolve. The office pointed the clerk to two cases, City of Lakeland v. Lawson Music Co. and Isern v. City of West Miami, that discuss what "permanent" means in this context.

Currency note

This opinion was issued in 2011. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

What the opinion concluded (2011)

The office concluded that the dispositive question is whether the business has established a permanent business location or branch office within the city, and that this is a mixed question of law and fact the office cannot decide. It explained the statutory structure: section 205.042 authorizes a municipal business tax on a person who maintains a permanent business location or branch office in the municipality, and section 205.065 bars a second local government from taxing a DBPR-regulated business that works in its jurisdiction only on a temporary or transitory basis when that business has already paid a business tax where its permanent location is maintained. Work performed away from the permanent location does not create a separate business location. The office noted the statute is aimed at eliminating taxes on transitory business activity, and that a regulated business which does not meet both conditions remains liable for the city's tax.

Because the office could not make the factual determination, it offered guidance from the case law. It cited City of Lakeland v. Lawson Music Co., where the court found leased space for coin-operated machines, in place for eight years, was a permanent business location, and explained that "permanent" in tax cases means a presence that is continuous rather than sporadic or temporary. It cited Isern v. City of West Miami, where the Florida Supreme Court discussed "business location" (drawing on the pest-control definition in section 482.021(3)) and indicated that a relatively permanent presence, like offices, a warehouse, or storage facility, is what supports local licensure, while a merely temporary presence necessitated by a job does not. This was an informal advisory letter.

Common questions

Q: Does paying a business tax in one county exempt me everywhere in Florida?
A: Not entirely. Under section 205.065, paying where your permanent location is exempts you from a second local government's tax only for temporary or transitory work there. If you have a permanent location or branch office in that second jurisdiction, you can be taxed there.

Q: I list my home as my business address but work elsewhere. Do I owe the city's business tax?
A: It depends on whether the home is a "permanent business location." The opinion would not decide that, calling it a mixed question of law and fact. Listing a home as the business address on filings and cards is the kind of fact a city would weigh.

Q: What makes a location "permanent" for business-tax purposes?
A: The cases the office cited treat "permanent" as a continuous, non-sporadic presence, offices, a warehouse, storage, or similar, rather than a temporary job-site presence. Lawson Music and Isern discuss the line.

Q: Does just doing work inside a city create a taxable business location there?
A: No. Section 205.065 says work performed away from the permanent location is not, by itself, a separate business location, and the statute targets transitory activity.

Background and statutory framework

Florida's local-business-tax law governs how cities and counties may tax businesses. Section 205.042 authorizes municipalities to levy a business tax on persons maintaining a permanent business location or branch office in the municipality (and, in some cases, on interstate-commerce activity). Section 205.065 carves out DBPR-regulated businesses: once such a business pays the tax where its permanent location is, other local governments cannot tax it for temporary or transitory work, and a properly licensed contractor wrongly charged has standing to sue and recover attorney's fees. The recurring interpretive problem is what counts as a "permanent business location," which the case law (Lawson Music, Isern, and the pest-control definition in section 482.021(3)) addresses, and which the office treats as a fact question for the local authority, not the Attorney General.

Citations and references

Statutes:

• section 205.042, Florida Statutes (authority to impose municipal business tax)
• section 205.065, Florida Statutes (limit on taxing DBPR-regulated businesses without a permanent location)
• section 482.021(3), Florida Statutes (definition of "business location" in the pest-control context)
• section 205.0537, Florida Statutes (vending and amusement machines)

Cases:

• City of Lakeland v. Lawson Music Co., Inc., 301 So. 2d 506 (Fla. 2d DCA 1974), "permanent" means continuous, not sporadic, presence
• Isern v. City of West Miami, 244 So. 2d 420 (Fla. 1971), temporary job-site presence is not a business location

Prior Attorney General opinions referenced: 79-31, 92-74, 92-83, 76-234.

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/taxation-local-business-tax
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/8167

Original opinion text

Mr. James D. Class

City Clerk

City of Dade City

Post Office Box 1355

Dade City, Florida 33526-1355

Dear Mr. Class:

You have asked this office for assistance in determining whether an individual whose business address is listed as his home in Dade City is subject to the city's business tax, when the individual operates a business licensed by the Florida Department of Business and Professional Regulation (DBPR) and has a business license from another city or the county where he also owns property.

The factual scenario you have provided is that an individual living within the city operates a medical physics practice regulated by DBPR. You indicate that the business's articles of incorporation, reports filed with the Division of Corporations, website, business cards, email signature, and local phone voice mail message reflect that the individual's home in Dade City is his place of business, although the individual works outside the city and the county. The individual has apparently procured a business license in another county where he also owns property.

It is unclear whether your duties as clerk for the City of Dade City involve merely the exercise of a ministerial act in collecting the business tax that may be due from a business or if you are authorized to enforce the provisions of the city's business tax ordinance. In light of this ambiguity, the following general comments are provided.[1]

Section 205.042, Florida Statutes, authorizes municipalities to impose a business tax on:

"(1) Any person who maintains a permanent business location or branch office within the municipality, for the privilege of engaging in or managing any business within its jurisdiction.

(2) Any person who maintains a permanent business location or branch office within the municipality, for the privilege of engaging in or managing any profession or occupation within its jurisdiction.

(3) Any person who does not qualify under subsection (1) or subsection (2) and who transacts any business or engages in any occupation or profession in interstate commerce, if the business tax is not prohibited by s. 8, Art. I of the United States Constitution."

Section 205.065, Florida Statutes, however, limits the authority of local governments to impose business taxes, by providing:

"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."

Thus, the statute requires only that a municipality refrain from imposing a business tax on a regulated business which: 1) works within the jurisdictional boundaries of the town, but has no permanent business location or branch office there, and 2) has paid an occupational license tax for the current year to another jurisdiction where the business has a permanent business location.[2] If a "regulated" business does not meet either of these requirements, it is still liable for payment of a business tax to the City of Dade City. A review of the legislative history of the act shows that the statute is directed at eliminating the imposition of a business tax on transitory business activity.[3]

The critical determination, therefore, appears to be whether a business has established a permanent business location or branch office within the jurisdiction of a municipality or county, regardless of whether it may hold a business license from another municipality or county. The determination of whether a business has established a permanent business location or branch office in a particular jurisdiction is a mixed question of law and fact that may not be made by this office.[4]

This office has previously been asked to comment on whether certain activity could be considered the establishment of a permanent business location, but has not directly answered the question.[5] In Attorney General Opinion 79-31, this office considered whether an individual selling wares at a flea market or a swap shop was subject to an occupational license tax by the establishment of a permanent business location. The opinion expressed a reluctance to find that such a person had established a permanent business location by engaging in such sales and suggested a consideration of the discussion in City of Lakeland v. Lawson Music Co., Inc.,[6] regarding the term "permanent" to guide a municipality in formulating its ordinance imposing an occupational license tax.

In Lawson Music Co., the court began its discussion by noting that minimum contacts may be sufficient to bring a foreign business within the jurisdiction of a local government for taxing purposes. The court found that the leasing of space within a commercial establishment for the installation of coin-operated music and amusement machines was more than minimum contact. In determining whether such installations were permanent, the court then considered that the machines had been in place for eight years and but for their presence in the remote locations, the business would not exist. The court also noted that the term "permanent" does not always mean lasting forever; rather, in tax cases, permanency may be found where the presence of the business is continuous and not sporadic or temporary.[7]

The Supreme Court of Florida in Isern v. City of West Miami, et al.,[8] reviewed the authority of municipalities to impose an occupational license tax on extermination businesses performing services within certain cities, but maintaining their places of business in Dade County municipalities outside the jurisdiction of the ones seeking to collect the tax. The cities argued that the exterminators performed their services entirely upon the premises of the customer within their jurisdiction, thereby establishing a business location. While the conclusion of the Court was based upon the limited ability of a municipality to impose an occupational tax and the requirement that exterminators first obtain state licensure for "each business location," thereby effectively removing the ability of a municipality from making a determination that a business location had been established, the discussion regarding what constitutes a business location is instructive.

In Isern, the Court looked to section 482.021(3), Florida Statutes (1969), defining "[b]usiness location" as "[a]ny advertised location in or from which pest control business is solicited, accepted and conducted." The statute presently defines business location in the same terms. The Court further stated that the "temporary presence of a fumigation tent or a spraying truck within a municipality, necessitated merely by a job contract, and under control and operation of properly licensed authorities, does not lay a predicate for the municipality to demand that an occupational license be purchased."[9] The Court concluded that the absence of a relatively permanent presence, such as "offices or places of business," located within a municipality would preclude local licensure. Other examples, provided by the Court, which would establish a permanent presence of a business were "a warehouse or storage facility, or any other facility which would be involved in the operation of [a] business[.]"[10]

The discussions in Isern and Lawson Music Co. may be helpful in making a determination of whether a business operating within the city has established a permanent business location subject to the city's business tax.

I trust that these informal comments will be of assistance.

Sincerely,

Lagran Saunders

Assistant Attorney General

ALS/tsh

cc: Karla S. Owens, City Attorney

[1] There is an apparent difference of opinion between you (that the individual is operating a business within the city and is subject to the business tax) and the city's attorney (the individual licensed by DBPR maintains a license in another jurisdiction and is, therefore, exempt from the local business tax). See Letter from Ms. Karla S. Owens, Dade City Attorney, to David A. Hernandez, Ph.D., M.P.H., dated January 5, 2011, and Memorandum to Mr. James D. Class, City Clerk/Finance Director from Ms. Karla S. Owens, City Attorney, dated January 30, 2011.

[2] See Op. Att'y Gen. Fla. 92-74 (1992) (municipality precluded from imposing an occupational license tax on DBPR regulated business that does not establish a permanent business location while working within the municipality, but has an occupational license from another city or county in which the business maintains a permanent business location); but see Op. Att'y Gen. Fla. 92-83 (1992) (county may impose occupational license tax on business maintaining a permanent business location within a municipality within the county and possessing an occupational license from such city).

[3] See Final Bill Analysis and Economic Impact Statement of the Florida House of Representative Committee on Regulatory Reform on HB 2341 (enacted as Ch. 92-203, Laws of Fla.). And see Final Bill Analysis and Economic Impact Statement for CS/HB 1731 (which contained language identical to that passed in s. 32, Ch. 92-203, Laws of Fla.), Florida House of Representatives Committee on Regulatory Reform, dated April 15, 1992, stating:

"The bill prohibits any local governing authority from levying an occupational tax or an equivalent registration or regulatory fee on a person engaging in a business or profession licensed by the Department of Professional Regulation. The prohibition applies only if the person has paid an occupational license tax and only if no permanent business location or a branch office is located within the jurisdiction." (e.s.)

[4] See "Frequently Asked Questions About Attorney General Opinions;" I. General Nature and Purpose of Opinions at: www.myfloridalegal.com.

[5] See Ops. Fla. Att'y Gen. 76-234 (1976) (doubtful that a typical construction project or projects, standing alone, constitutes a permanent business location) and 79-31 (1979).

[6] 301 So. 2d 506 (Fla. 2d DCA, 1974) (leasing of space within commercial establishments in a taxing municipality for placement of amusement machines constituted a permanent business location within the taxing municipality so as to subject it to that municipality's taxing power). Section 205.0537, Fla. Stat., relating to vending and amusement machines was subsequently created (s. 10, Ch. 93-180, Laws of Fla.), providing that a "business premises where a coin-operated or token-operated vending machine that dispenses products, merchandise, or services or where an amusement or game machine is operated must assure that any required municipal or county business tax receipt for the machine is secured."

[7] Id. at 508.

[8] 244 So. 2d 420 (Fla. 1971).

[9] Isern, supra at 422.

[10] Id. at 423.