Earlier this year, the Florida Legislature established the Hope Scholarship Program, which will provide scholarships to children who have been subjected to battery, harassment, hazing, bullying, kidnapping, physical attack, robbery, sexual offenses, threat or intimidation, or fighting while at a public school. These scholarships will be used to transfer the affected children to another public school or eligible private school. This program will be funded by state-approved, scholarship-funding organizations (“SFOs” or “SFO”), and these SFOs will be funded, in part, by the sales tax owed on the sale of a motor vehicle.
Starting October 1, 2018, any person who purchases a motor vehicle will have the option of directing part, or in some cases all, of his or her sales tax payment to an SFO. (This does not apply to customers who lease or rent a vehicle.) The amount that can be directed to an SFO is capped at $105. For example, if the sales tax payment is $1,500, then only $105 of that payment can be directed to an SFO. The remaining $1,395 would be remitted to the Florida Department of Revenue (“FDOR”) as usual. On the other hand, if the sales tax payment was only $75, then the customer could direct his or her entire $75 payment to an SFO, and no money would be remitted to the FDOR.
Dealerships, new and used, will be required to inform customers that their sales tax payments can be directed to an SFO. This should be done at the time of the purchase, so the duty will likely fall on a dealership’s F&I personnel. The FDOR is currently developing a contribution election form, which will explain the process to the customer. The customer will also complete the form if he or she elects to direct his or her sales tax payment to an SFO. In such a case, the dealership would be required to accept and hold the money, just as it would for a regular sales tax payment.
This new law also comes with new reporting obligations. On the twentieth of every month, each dealership will be required to submit a report to the FDOR detailing the previous month’s elections. This report is expected to be separate from the regular sales tax report that is due each month. The dealerships will also be required to submit payments and reports directly to the SFOs. To ensure truthful compliance by all parties, the SFOs will also be required to submit reports to the FDOR. The FDOR will then examine both sets of reports, and it will open an investigation if any discrepancies exist.
In the coming months, we expect the FDOR to release the contribution election form, the reporting forms, and emergency rules. These items should provide more detail on the tax collection and reporting process. If you have any questions about the Hope Scholarship Program, we encourage you to call your dealer lawyer.