HB 0873

1	A bill to be entitled
2	An act relating to the sales tax exemption for machinery
3	and equipment used to increase productive output; amending
4	s. 212.08, F.S.; deleting a limitation on an exemption
5	from the sales tax for such machinery and equipment each
6	year; providing an effective date.
7
8	Be It Enacted by the Legislature of the State of Florida:
9
10	Section 1.  Paragraph (b) of subsection (5) of section
11	212.08, Florida Statutes, is amended to read:
12	212.08  Sales, rental, use, consumption, distribution, and
13	storage tax; specified exemptions.--The sale at retail, the
14	rental, the use, the consumption, the distribution, and the
15	storage to be used or consumed in this state of the following
16	are hereby specifically exempt from the tax imposed by this
17	chapter.
18	(5)  EXEMPTIONS; ACCOUNT OF USE.--
19	(b)  Machinery and equipment used to increase productive
20	output.--
21	1.  Industrial machinery and equipment purchased for
22	exclusive use by a new business in spaceport activities as
23	defined by s. 212.02 or for use in new businesses which
24	manufacture, process, compound, or produce for sale items of
25	tangible personal property at fixed locations are exempt from
26	the tax imposed by this chapter upon an affirmative showing by
27	the taxpayer to the satisfaction of the department that such
28	items are used in a new business in this state. Such purchases
29	must be made prior to the date the business first begins its
30	productive operations, and delivery of the purchased item must
31	be made within 12 months of that date.
32	2.a.  Industrial machinery and equipment purchased for
33	exclusive use by an expanding facility which is engaged in
34	spaceport activities as defined by s. 212.02 or for use in
35	expanding manufacturing facilities or plant units which
36	manufacture, process, compound, or produce for sale items of
37	tangible personal property at fixed locations in this state are
38	exempt from any amount of tax imposed by this chapter in excess
39	of $50,000 per calendar year upon an affirmative showing by the
40	taxpayer to the satisfaction of the department that such items
41	are used to increase the productive output of such expanded
42	facility or business by not less than 10 percent.
43	b.  Notwithstanding any other provision of this section,
44	industrial machinery and equipment purchased for use in
45	expanding printing manufacturing facilities or plant units that
46	manufacture, process, compound, or produce for sale items of
47	tangible personal property at fixed locations in this state are
48	exempt from any amount of tax imposed by this chapter upon an
49	affirmative showing by the taxpayer to the satisfaction of the
50	department that such items are used to increase the productive
51	output of such an expanded business by not less than 10 percent.
52	3.a.  To receive an exemption provided by subparagraph 1.
53	or subparagraph 2., a qualifying business entity shall apply to
54	the department for a temporary tax exemption permit. The
55	application shall state that a new business exemption or
56	expanded business exemption is being sought. Upon a tentative
57	affirmative determination by the department pursuant to
58	subparagraph 1. or subparagraph 2., the department shall issue
59	such permit.
60	b.  The applicant shall be required to maintain all
61	necessary books and records to support the exemption. Upon
62	completion of purchases of qualified machinery and equipment
63	pursuant to subparagraph 1. or subparagraph 2., the temporary
64	tax permit shall be delivered to the department or returned to
65	the department by certified or registered mail.
66	c.  If, in a subsequent audit conducted by the department,
67	it is determined that the machinery and equipment purchased as
68	exempt under subparagraph 1. or subparagraph 2. did not meet the
69	criteria mandated by this paragraph or if commencement of
70	production did not occur, the amount of taxes exempted at the
71	time of purchase shall immediately be due and payable to the
72	department by the business entity, together with the appropriate
73	interest and penalty, computed from the date of purchase, in the
74	manner prescribed by this chapter.
75	d.  In the event a qualifying business entity fails to
76	apply for a temporary exemption permit or if the tentative
77	determination by the department required to obtain a temporary
78	exemption permit is negative, a qualifying business entity shall
79	receive the exemption provided in subparagraph 1. or
80	subparagraph 2. through a refund of previously paid taxes. No
81	refund may be made for such taxes unless the criteria mandated
82	by subparagraph 1. or subparagraph 2. have been met and
83	commencement of production has occurred.
84	4.  The department shall adopt rules governing applications
85	for, issuance of, and the form of temporary tax exemption
86	permits; provisions for recapture of taxes; and the manner and
87	form of refund applications and may establish guidelines as to
88	the requisites for an affirmative showing of increased
89	productive output, commencement of production, and qualification
90	for exemption.
91	5.  The exemptions provided in subparagraphs 1. and 2. do
92	not apply to machinery or equipment purchased or used by
93	electric utility companies, communications companies, oil or gas
94	exploration or production operations, publishing firms that do
95	not export at least 50 percent of their finished product out of
96	the state, any firm subject to regulation by the Division of
97	Hotels and Restaurants of the Department of Business and
98	Professional Regulation, or any firm which does not manufacture,
99	process, compound, or produce for sale items of tangible
100	personal property or which does not use such machinery and
101	equipment in spaceport activities as required by this paragraph.
102	The exemptions provided in subparagraphs 1. and 2. shall apply
103	to machinery and equipment purchased for use in phosphate or
104	other solid minerals severance, mining, or processing operations
105	only by way of a prospective credit against taxes due under
106	chapter 211 for taxes paid under this chapter on such machinery
107	and equipment.
108	6.  For the purposes of the exemptions provided in
109	subparagraphs 1. and 2., these terms have the following
110	meanings:
111	a.  "Industrial machinery and equipment" means tangible
112	personal property or other property that has a depreciable life
113	of 3 years or more and that is used as an integral part in the
114	manufacturing, processing, compounding, or production of
115	tangible personal property for sale or is exclusively used in
116	spaceport activities. A building and its structural components
117	are not industrial machinery and equipment unless the building
118	or structural component is so closely related to the industrial
119	machinery and equipment that it houses or supports that the
120	building or structural component can be expected to be replaced
121	when the machinery and equipment are replaced. Heating and air-
122	conditioning systems are not industrial machinery and equipment
123	unless the sole justification for their installation is to meet
124	the requirements of the production process, even though the
125	system may provide incidental comfort to employees or serve, to
126	an insubstantial degree, nonproduction activities. The term
127	includes parts and accessories only to the extent that the
128	exemption thereof is consistent with the provisions of this
129	paragraph.
130	b.  "Productive output" means the number of units actually
131	produced by a single plant or operation in a single continuous
132	12-month period, irrespective of sales. Increases in productive
133	output shall be measured by the output for 12 continuous months
134	immediately following the completion of installation of such
135	machinery or equipment over the output for the 12 continuous
136	months immediately preceding such installation. However, if a
137	different 12-month continuous period of time would more
138	accurately reflect the increase in productive output of
139	machinery and equipment purchased to facilitate an expansion,
140	the increase in productive output may be measured during that
141	12-month continuous period of time if such time period is
142	mutually agreed upon by the Department of Revenue and the
143	expanding business prior to the commencement of production;
144	provided, however, in no case may such time period begin later
145	than 2 years following the completion of installation of the new
146	machinery and equipment. The units used to measure productive
147	output shall be physically comparable between the two periods,
148	irrespective of sales.
149	Section 2.  This act shall take effect July 1, 2004.

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