House Bill 1273er

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    1998 Legislature                                    CS/HB 1273



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  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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    1998 Legislature                                    CS/HB 1273



  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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  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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  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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    1998 Legislature                                    CS/HB 1273



  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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