House Bill 1273c1
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Florida House of Representatives - 1998 CS/HB 1273
By the Committee on Finance & Taxation and Representatives
Barreiro and Fasano
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 providing a tax exemption for industrial
5 machinery and equipment purchased for use in
6 expanding certain printing facilities;
7 providing an effective date.
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9 Be It Enacted by the Legislature of the State of Florida:
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11 Section 1. Paragraph (b) of subsection (5) of section
12 212.08, Florida Statutes, is amended to read:
13 212.08 Sales, rental, use, consumption, distribution,
14 and storage tax; specified exemptions.--The sale at retail,
15 the rental, the use, the consumption, the distribution, and
16 the storage to be used or consumed in this state of the
17 following are hereby specifically exempt from the tax imposed
18 by this chapter.
19 (5) EXEMPTIONS; ACCOUNT OF USE.--
20 (b) Machinery and equipment used to increase
21 productive output.--
22 1. Industrial machinery and equipment purchased for
23 use in new businesses which manufacture, process, compound, or
24 produce for sale, or for exclusive use in spaceport activities
25 as defined in s. 212.02, items of tangible personal property
26 at fixed locations are exempt from the tax imposed by this
27 chapter upon an affirmative showing by the taxpayer to the
28 satisfaction of the department that such items are used in a
29 new business in this state. Such purchases must be made prior
30 to the date the business first begins its productive
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1 operations, and delivery of the purchased item must be made
2 within 12 months of that date.
3 2.a. Industrial machinery and equipment purchased for
4 use in expanding manufacturing facilities or plant units which
5 manufacture, process, compound, or produce for sale, or for
6 exclusive use in spaceport activities as defined in s. 212.02,
7 items of tangible personal property at fixed locations in this
8 state are exempt from any amount of tax imposed by this
9 chapter in excess of $50,000 per calendar year upon an
10 affirmative showing by the taxpayer to the satisfaction of the
11 department that such items are used to increase the productive
12 output of such expanded business by not less than 10 percent.
13 b. Notwithstanding any other provision of this
14 section, industrial machinery and equipment purchased for use
15 in expanding printing manufacturing facilities or plant units
16 that manufacture, process, compound, or produce for sale items
17 of tangible personal property at fixed locations in this state
18 are exempt from any amount of tax imposed by this chapter upon
19 an affirmative showing by the taxpayer to the satisfaction of
20 the department that such items are used to increase the
21 productive output of such an expanded business by not less
22 than 10 percent.
23 3.a. To receive an exemption provided by subparagraph
24 1. or subparagraph 2., a qualifying business entity shall
25 apply to the department for a temporary tax exemption permit.
26 The application shall state that a new business exemption or
27 expanded business exemption is being sought. Upon a tentative
28 affirmative determination by the department pursuant to
29 subparagraph 1. or subparagraph 2., the department shall issue
30 such permit.
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Florida House of Representatives - 1998 CS/HB 1273
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1 b. The applicant shall be required to maintain all
2 necessary books and records to support the exemption. Upon
3 completion of purchases of qualified machinery and equipment
4 pursuant to subparagraph 1. or subparagraph 2., the temporary
5 tax permit shall be delivered to the department or returned to
6 the department by certified or registered mail.
7 c. If, in a subsequent audit conducted by the
8 department, it is determined that the machinery and equipment
9 purchased as exempt under subparagraph 1. or subparagraph 2.
10 did not meet the criteria mandated by this paragraph or if
11 commencement of production did not occur, the amount of taxes
12 exempted at the time of purchase shall immediately be due and
13 payable to the department by the business entity, together
14 with the appropriate interest and penalty, computed from the
15 date of purchase, in the manner prescribed by this chapter.
16 d. In the event a qualifying business entity fails to
17 apply for a temporary exemption permit or if the tentative
18 determination by the department required to obtain a temporary
19 exemption permit is negative, a qualifying business entity
20 shall receive the exemption provided in subparagraph 1. or
21 subparagraph 2. through a refund of previously paid taxes. No
22 refund may be made for such taxes unless the criteria mandated
23 by subparagraph 1. or subparagraph 2. have been met and
24 commencement of production has occurred.
25 4. The department shall promulgate rules governing
26 applications for, issuance of, and the form of temporary tax
27 exemption permits; provisions for recapture of taxes; and the
28 manner and form of refund applications and may establish
29 guidelines as to the requisites for an affirmative showing of
30 increased productive output, commencement of production, and
31 qualification for exemption.
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Florida House of Representatives - 1998 CS/HB 1273
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1 5. The exemptions provided in subparagraphs 1. and 2.
2 do not apply to machinery or equipment purchased or used by
3 electric utility companies, communications companies,
4 phosphate or other solid minerals severance, mining, or
5 processing operations, oil or gas exploration or production
6 operations, publishing firms that do not export at least 50
7 percent of their finished product out of the state, any firm
8 subject to regulation by the Division of Hotels and
9 Restaurants of the Department of Business and Professional
10 Regulation, or any firm which does not manufacture, process,
11 compound, or produce for sale, or for exclusive use in
12 spaceport activities as defined in s. 212.02, items of
13 tangible personal property.
14 6. For the purposes of the exemptions provided in
15 subparagraphs 1. and 2., these terms have the following
16 meanings:
17 a. "Industrial machinery and equipment" means "section
18 38 property" as defined in s. 48(a)(1)(A) and (B)(i) of the
19 Internal Revenue Code, provided "industrial machinery and
20 equipment" shall be construed by regulations adopted by the
21 Department of Revenue to mean tangible property used as an
22 integral part of the manufacturing, processing, compounding,
23 or producing for sale, or for exclusive use in spaceport
24 activities as defined in s. 212.02, of items of tangible
25 personal property. Such term includes parts and accessories
26 only to the extent that the exemption thereof is consistent
27 with the provisions of this paragraph.
28 b. "Productive output" means the number of units
29 actually produced by a single plant or operation in a single
30 continuous 12-month period, irrespective of sales. Increases
31 in productive output shall be measured by the output for 12
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Florida House of Representatives - 1998 CS/HB 1273
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1 continuous months immediately following the completion of
2 installation of such machinery or equipment over the output
3 for the 12 continuous months immediately preceding such
4 installation. However, if a different 12-month continuous
5 period of time would more accurately reflect the increase in
6 productive output of machinery and equipment purchased to
7 facilitate an expansion, the increase in productive output may
8 be measured during that 12-month continuous period of time if
9 such time period is mutually agreed upon by the Department of
10 Revenue and the expanding business prior to the commencement
11 of production; provided, however, in no case may such time
12 period begin later than 2 years following the completion of
13 installation of the new machinery and equipment. The units
14 used to measure productive output shall be physically
15 comparable between the two periods, irrespective of sales.
16 7. Notwithstanding any other provision in this
17 paragraph to the contrary, in order to receive the exemption
18 provided in this paragraph a taxpayer must register with the
19 WAGES Program Business Registry established by the local WAGES
20 coalition for the area in which the taxpayer is located. Such
21 registration establishes a commitment on the part of the
22 taxpayer to hire WAGES program participants to the maximum
23 extent possible consistent with the nature of their business.
24 Section 2. This act shall take effect July 1 of the
25 year in which enacted.
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