CODING: Words stricken are deletions; words underlined are additions.

House Bill 1273

Florida House of Representatives - 1997 HB 1273 By Representative Barreiro 1 A bill to be entitled 2 An act relating to the tax on sales, use, and 3 other transactions; amending s. 212.08, F.S.; 4 deleting a limitation on the amount of the tax 5 exemption allowed on machinery and equipment 6 purchased by an expanding business used to 7 increase productive output; providing that such 8 exemption also applies if the machinery and 9 equipment improves the environment; removing a 10 provision that prohibits the application of the 11 exemptions for industrial machinery and 12 equipment purchased for use in new or expanding 13 businesses to certain publishing firms; 14 providing an exemption for film, paper, art, 15 and other supplies used to produce printed 16 matter for resale; providing an effective date. 17 18 Be It Enacted by the Legislature of the State of Florida: 19 20 Section 1. Paragraph (b) of subsection (5) of section 21 212.08, Florida Statutes, 1996 Supplement, is amended, and 22 paragraph (nn) is added to subsection (7) of said section, to 23 read: 24 212.08 Sales, rental, use, consumption, distribution, 25 and storage tax; specified exemptions.--The sale at retail, 26 the rental, the use, the consumption, the distribution, and 27 the storage to be used or consumed in this state of the 28 following are hereby specifically exempt from the tax imposed 29 by this part. 30 (5) EXEMPTIONS; ACCOUNT OF USE.-- 31 1 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1273 543-135A-97 1 (b) Machinery and equipment used to increase 2 productive output.-- 3 1. Industrial machinery and equipment purchased for 4 use in new businesses which manufacture, process, compound, or 5 produce for sale, or for exclusive use in spaceport activities 6 as defined in s. 212.02, items of tangible personal property 7 at fixed locations are exempt from the tax imposed by this 8 chapter upon an affirmative showing by the taxpayer to the 9 satisfaction of the department that such items are used in a 10 new business in this state. Such purchases must be made prior 11 to the date the business first begins its productive 12 operations, and delivery of the purchased item must be made 13 within 12 months of that date. 14 2. Industrial machinery and equipment purchased for 15 use in expanding manufacturing facilities or plant units which 16 manufacture, process, compound, or produce for sale, or for 17 exclusive use in spaceport activities as defined in s. 212.02, 18 items of tangible personal property at fixed locations in this 19 state are exempt from any amount of tax imposed by this 20 chapter in excess of $50,000 per calendar year upon an 21 affirmative showing by the taxpayer to the satisfaction of the 22 department that such items are used to increase the productive 23 output of such expanded business by not less than 10 percent 24 or that such items improve the environment. 25 3.a. To receive an exemption provided by subparagraph 26 1. or subparagraph 2., a qualifying business entity shall 27 apply to the department for a temporary tax exemption permit. 28 The application shall state that a new business exemption or 29 expanded business exemption is being sought. Upon a tentative 30 affirmative determination by the department pursuant to 31 2 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1273 543-135A-97 1 subparagraph 1. or subparagraph 2., the department shall issue 2 such permit. 3 b. The applicant shall be required to maintain all 4 necessary books and records to support the exemption. Upon 5 completion of purchases of qualified machinery and equipment 6 pursuant to subparagraph 1. or subparagraph 2., the temporary 7 tax permit shall be delivered to the department or returned to 8 the department by certified or registered mail. 9 c. If, in a subsequent audit conducted by the 10 department, it is determined that the machinery and equipment 11 purchased as exempt under subparagraph 1. or subparagraph 2. 12 did not meet the criteria mandated by this paragraph or if 13 commencement of production did not occur, the amount of taxes 14 exempted at the time of purchase shall immediately be due and 15 payable to the department by the business entity, together 16 with the appropriate interest and penalty, computed from the 17 date of purchase, in the manner prescribed by this chapter. 18 d. In the event a qualifying business entity fails to 19 apply for a temporary exemption permit or if the tentative 20 determination by the department required to obtain a temporary 21 exemption permit is negative, a qualifying business entity 22 shall receive the exemption provided in subparagraph 1. or 23 subparagraph 2. through a refund of previously paid taxes. No 24 refund may be made for such taxes unless the criteria mandated 25 by subparagraph 1. or subparagraph 2. have been met and 26 commencement of production has occurred. 27 4. The department shall promulgate rules governing 28 applications for, issuance of, and the form of temporary tax 29 exemption permits; provisions for recapture of taxes; and the 30 manner and form of refund applications and may establish 31 guidelines as to the requisites for an affirmative showing of 3 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1273 543-135A-97 1 increased productive output, commencement of production, and 2 qualification for exemption. 3 5. The exemptions provided in subparagraphs 1. and 2. 4 do not apply to machinery or equipment purchased or used by 5 electric utility companies, communications companies, 6 phosphate or other solid minerals severance, mining, or 7 processing operations, oil or gas exploration or production 8 operations, publishing firms that do not export at least 50 9 percent of their finished product out of the state, any firm 10 subject to regulation by the Division of Hotels and 11 Restaurants of the Department of Business and Professional 12 Regulation, or any firm which does not manufacture, process, 13 compound, or produce for sale, or for exclusive use in 14 spaceport activities as defined in s. 212.02, items of 15 tangible personal property. 16 6. For the purposes of the exemptions provided in 17 subparagraphs 1. and 2., these terms have the following 18 meanings: 19 a. "Industrial machinery and equipment" means "section 20 38 property" as defined in s. 48(a)(1)(A) and (B)(i) of the 21 Internal Revenue Code, provided "industrial machinery and 22 equipment" shall be construed by regulations adopted by the 23 Department of Revenue to mean tangible property used as an 24 integral part of the manufacturing, processing, compounding, 25 or producing for sale, or for exclusive use in spaceport 26 activities as defined in s. 212.02, of items of tangible 27 personal property. Such term includes parts and accessories 28 only to the extent that the exemption thereof is consistent 29 with the provisions of this paragraph. 30 b. "Productive output" means the number of units 31 actually produced by a single plant or operation in a single 4 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1273 543-135A-97 1 continuous 12-month period, irrespective of sales. Increases 2 in productive output shall be measured by the output for 12 3 continuous months immediately following the completion of 4 installation of such machinery or equipment over the output 5 for the 12 continuous months immediately preceding such 6 installation. However, if a different 12-month continuous 7 period of time would more accurately reflect the increase in 8 productive output of machinery and equipment purchased to 9 facilitate an expansion, the increase in productive output may 10 be measured during that 12-month continuous period of time if 11 such time period is mutually agreed upon by the Department of 12 Revenue and the expanding business prior to the commencement 13 of production; provided, however, in no case may such time 14 period begin later than 2 years following the completion of 15 installation of the new machinery and equipment. The units 16 used to measure productive output shall be physically 17 comparable between the two periods, irrespective of sales. 18 7. Notwithstanding any other provision in this 19 paragraph to the contrary, in order to receive the exemption 20 provided in this paragraph a taxpayer must register with the 21 WAGES Program Business Registry established by the local WAGES 22 coalition for the area in which the taxpayer is located. Such 23 registration establishes a commitment on the part of the 24 taxpayer to hire WAGES program participants to the maximum 25 extent possible consistent with the nature of their business. 26 (7) MISCELLANEOUS EXEMPTIONS.-- 27 (nn) Film and other printing supplies.--Also exempt 28 are film, photographic paper, chemicals used in processing 29 printing, art supplies, engravings, mats, art work, 30 typography, lithographic plates, or negatives purchased for 31 use in producing printed, imprinted, overprinted, 5 CODING: Words stricken are deletions; words underlined are additions. Florida House of Representatives - 1997 HB 1273 543-135A-97 1 lithographic, multilithic, blueprinted, photostatic, or other 2 reproductions of written or graphic matter, for resale. 3 Section 2. This act shall take effect July 1, 1997. 4 5 ***************************************** 6 HOUSE SUMMARY 7 Deletes a provision that limits, to amounts in excess of 8 $50,000, the amount of the sales tax exemption allowed for industrial machinery and equipment purchased by an 9 expanding business which is used to increase productivity by at least 10 percent, and provides that such exemption 10 also applies if the machinery and equipment improve the environment. Removes a provision that prohibits the 11 application of the tax exemptions on the purchase of machinery and equipment for use in a new or expanding 12 business to a publishing firm that does not export at least 50 percent of its finished product out of the 13 state. 14 Provides an exemption for film, photographic paper, 15 engravings, lithographic plates, and art work and other related art supplies used to produce printed matter for 16 resale. 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 6