CEO 75-98 -- April 28, 1975
"GROSS INCOME"; "SOURCE OF BUSINESS ENTITY'S GROSS INCOME"; "LOCATION OF ASSETS"
To: David W. Miller, C.P.A., Deland
Prepared by: Carol Ann Turner
For purposes of financial disclosure, the term "gross income" has the same meaning as for purposes of federal income taxation. See CEO 74-39. The term "source" is defined by s. 112.312(8), F. S. (1974 Supp.), as "the name, address and description of the principal business activity of the business entity." Therefore, the phrase "source of business entity's income," as required to be disclosed on p. 3 of CE Form 1, would include the name, address, and principal business activity of any business customer from which 15 percent of the business' income is derived, providing it exceeds $1,500. A listing of assets held by a business entity in which the reporting person holds an interest is not required to be disclosed on p. 6 of CE Form 1. Pursuant to s. 112.3145(1)(e), F. S., only the type of asset held by the disclosing person must be listed, plus the name and address of the business entity.
1. What income is included within the meaning of the term "gross income" as used in part III, Ch. 112, F. S. (1974 Supp.)?
2. Does the term "source of business entity's gross income," as used in s. 112.3145(1)(a), F. S., include identification by product or by customer name where a client owns a material interest in an automotive service station?
3. Does the asset disclosure provision, s. 112.3145(1)(e), supra, require complete description of corporate property such as orange groves and commercial buildings when ownership of stock in the corporation constitutes an asset under part III, Ch. 112, supra?
We have concluded in a previous opinion, CEO 74-39, that the term "gross income," as used in part III, Ch. 112, supra, should be given the same interpretation as is given to such term for purposes of federal income taxation and would therefore include gross income from rental property. A copy of that opinion is enclosed and will, we believe, answer your inquiry. You should note that the act specifically addresses "gross income" of a business entity in certain provisions and in other sections asks that one ascertain "gross income" of the disclosing officer. Your question is answered accordingly.
As to question 2, s. 112.312(8), supra, defines "source" as follows:
"Source" means the name, address and description of the principal business activity of the business entity. (Emphasis supplied.)
Thus, an automotive service station's secondary sources of income, as required to be reported on CE Form 1, p. 3, would include the name, address, and principal business activity of any customer from which 15 percent of the station's income is derived, providing it exceeds $1500. The description of the principal business activity of the customer should include an indication of the type business in which the customer is engaged, if the customer is a business entity; otherwise the description column should be marked "not applicable" on p. 3 of form 1.
Question 3 is answered in the negative.
Section 112.3145(1)(e), supra, provides in pertinent part: "Each listed asset shall be identified only by type, location, address or legal description." Thus, the type of asset -- in this case capital stock held in the corporation -- must be identified together with the name and address of the corporation. Assets owned by the corporation need not be listed.