Separately stated freestanding service of process charges are not subject to
Florida sales and use tax. However, skip-tracing services performed by a
taxpayer who is in the business of providing service of process for law firms,
which are in turn billed to the taxpayer’s customers, are subject to sales and
use tax. Every person that charges for detective, burglar protection, and other
protection services exercises a taxable privilege. Taxable services include
skip-tracing services, but process serving services performed by detectives,
private investigators, or others are not subject to tax when freestanding or
when separately stated on an invoice given to a purchaser that includes taxable
services. “Skip tracing,” for these purposes, is the process of locating a
person for any number of reasons. Skip tracing is accomplished by collecting
information about the person to determine the person’s location. Information
sources used to locate the person may include a phone number database, credit
reports, job application information, and a criminal background check.
Skip-tracing services are specifically listed as a taxable service under Rule
12A-1.0092(2)(a)12., F.A.C., and as an investigation service under NAICS
National Number 561611. Skip tracing includes any services performed to locate a
person by the collection and analysis of information, such as telephone
directories, credit reports, and criminal background checks. Consequently,
charges for skip-tracing or locating services are subject to sales tax
regardless of whether the service is performed by a licensed private detective
agency or some other person. When a person performs skip-tracing services and
process serving services, the transaction involves both taxable and nontaxable
services. The person who provides the services must separately state the taxable
and nontaxable charges in order for the process serving services to remain
nontaxable; otherwise, the entire transaction is subject to tax.

Technical Assistance Advisement, No. 13A-008, Florida Department of
Revenue, April 11, 2013

A petition for writ of mandate challenging the placement of Measure A, which
would impose a 10-year 1/8 cent California local sales tax increase, on the
November 2012 general election ballot by Santa Clara County was properly denied.
The placement did not violate Article XIII C, Section 2, subdivision (b) of the
California Constitution (Proposition 218), which requires that local tax
increase measures be placed on the ballot with a regularly scheduled general
election for members of the local government’s governing body.

Arguments Made
The taxpayers alleged that voters should not have been allowed to vote on
Measure A because no seats for the Santa Clara County Board of Supervisors were
actually on the ballot. The county argued that placing Measure A on the ballot
for that election complied with Proposition 218 because the November 2012
election was a regularly scheduled election for members of the Santa Clara Board
of Supervisors. Three seats on the county’s Board of Supervisors were up for
election in the June 2012 statewide primary election. Two seats had uncontested
candidates who received 100% of the vote, and the third seat had an election
where one candidate received 58% of the vote. As a result, no seat required a
runoff election at the November 2012 statewide general election.

Proposition 218 Requirements
Proposition 218 provides that a vote is required before a tax may be
imposed, extended, or increased, but the required quantum of support for the tax
varies with the kind of tax being imposed, extended, or increased. If a tax is a
general one, the quantum is a simple majority, but if the tax is a special tax,
a supermajority of two-thirds is required. In regard to a general tax, the
election is required to be consolidated with a regularly scheduled general
election for members of the governing body of the local government, except in
cases of emergency declared by a unanimous vote of the governing body.

Statutory Scheme
The appellate court found no ambiguity in the language of Proposition 218.
The statutory scheme regarding elected members of a county board of supervisors
instructs candidates that they must stand for election in a county general
election during a statewide primary and, if necessary, a statewide general
election. A regularly scheduled general election for members of a county’s
governing body is an election that is fixed to occur during the statewide
primary and general elections. The statutory scheme does not contemplate the
idea that a regularly scheduled election can simultaneously be not regularly
scheduled if a contingency occurs that makes the election unnecessary. The
appellate court found Proposition 218 in harmony with the statutory scheme and
held that a regularly scheduled general election for members of Santa Clara’s
County Board of Supervisors is an election that is fixed to occur during the
statewide primary and general elections.

Voter Intent
The appellate court also found this construction of Proposition 218
consistent with the extrinsic indicia of voter intent to allow rather than limit
the right to vote on taxes. The county believed that a general tax was presently
necessary, but the taxpayers’ interpretation of Proposition 218 would tend to
deny rather than enhance the right to vote on the issue. Although the county
could place the issue on the next statewide primary election in two years, the
county may have legitimately believed that the need for the tax, or an alternate
plan if the voters rejected the tax, was in the present as opposed to the
future.

Silicon Valley Taxpayers’ Association v. Garner, Court of Appeal of
California, Sixth District, No. H038971, May 16, 2013

The video content (videos and television shows) that a taxpayer sells or rents to its customers that is streamed over the Internet to the customers’ high definition televisions or Blu-ray disc players is deemed a digital product downloaded to the taxpayer’s customers in accordance with Va. Code §§58.1-647 and 58.1-648, and thus the Virginia communications sales tax does not apply. The type of license granted to the customers (with or without permanent use) does not affect the application of the tax to the sale of the video content by the taxpayer to its customers. The other types of digital content (books and music) delivered by the taxpayer to its customers over the Internet are excluded from the communications sales and use tax in accordance with Va. Code §58.1-648(C).

In addition, the retail sales and use tax would not apply to sales of video content by the taxpayer to its customers pursuant to Va. Code §58.1-609.5(1). The statute exempts from the sales and use tax ”software, data, content and other information services delivered electronically via the Internet.”

Ruling of Commissioner, P.D. 13-59 , Virginia Department of Taxation, May 2, 2013 , ¶205-815