Senate Bill 1564c1

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    Florida Senate - 1998                           CS for SB 1564

    By the Committee on Ways and Means and Senator McKay





    301-1981-98

  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         amending the exemption for machinery and

  5         equipment used in silicon technology production

  6         and research and development; deleting the

  7         requirement that the exemption be accomplished

  8         through the refund of taxes that were

  9         previously paid; deleting the provision that

10         the refund is subject to a specific annual

11         legislative appropriation; providing an

12         effective date.

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14  Be It Enacted by the Legislature of the State of Florida:

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16         Section 1.  Paragraph (j) of subsection (5) of section

17  212.08, Florida Statutes, is amended to read:

18         212.08  Sales, rental, use, consumption, distribution,

19  and storage tax; specified exemptions.--The sale at retail,

20  the rental, the use, the consumption, the distribution, and

21  the storage to be used or consumed in this state of the

22  following are hereby specifically exempt from the tax imposed

23  by this chapter.

24         (5)  EXEMPTIONS; ACCOUNT OF USE.--

25         (j)  Machinery and equipment used in silicon technology

26  production and research and development.--

27         1.  Industrial machinery and equipment purchased for

28  use in silicon technology facilities certified under

29  subparagraph 5. to manufacture, process, compound, or produce

30  silicon technology products for sale or for use by these

31  facilities are exempt from the tax imposed by this chapter.

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    Florida Senate - 1998                           CS for SB 1564
    301-1981-98




  1         2.  Machinery and equipment are exempt from the tax

  2  imposed by this chapter if purchased for use predominately in

  3  silicon wafer research and development activities in a silicon

  4  technology research and development facility certified under

  5  subparagraph 5.

  6         3.  In addition to meeting The exemptions authorized in

  7  subparagraphs 1. and 2. accrue to the taxpayer through a

  8  refund of previously paid taxes. A refund may not be made

  9  unless the criteria mandated by subparagraph 1. or

10  subparagraph 2., a have been met and the business must be has

11  been certified by the Office of Tourism, Trade, and Economic

12  Development as authorized in this paragraph in order to

13  qualify for exemption under this paragraph.

14         4.  For items purchased tax exempt pursuant to this

15  paragraph, possession of a written certification from the

16  purchaser certifying the purchaser's entitlement to exemption

17  pursuant to this paragraph relieves the seller of the

18  responsibility of collecting the tax on the sale of such

19  items, and the department shall look solely to the purchaser

20  for recovery of tax if it determines that the purchaser was

21  not entitled to the exemption.

22         5.4.a.  To be eligible to receive the exemption

23  provided by subparagraph 1. or subparagraph 2., a qualifying

24  business entity shall apply to Enterprise Florida, Inc. The

25  application shall be developed by the Office of Tourism,

26  Trade, and Economic Development in consultation with

27  Enterprise Florida, Inc.

28         b.  Enterprise Florida, Inc., shall review each

29  submitted application and information and determine whether or

30  not the application is complete within 5 working days. Once an

31  application is complete, Enterprise Florida, Inc., shall,

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    Florida Senate - 1998                           CS for SB 1564
    301-1981-98




  1  within 10 working days, evaluate the application and recommend

  2  approval or disapproval of the application to the Office of

  3  Tourism, Trade, and Economic Development.

  4         c.  Upon receipt of the application and recommendation

  5  from Enterprise Florida, Inc., the Office of Tourism, Trade,

  6  and Economic Development shall certify within 5 working days

  7  those applicants who are found to meet the requirements of

  8  this section and notify the applicant, Enterprise Florida,

  9  Inc., and the department of the certification. If the Office

10  of Tourism, Trade, and Economic Development finds that the

11  applicant does not meet the requirements of this section, it

12  shall notify the applicant and Enterprise Florida, Inc.,

13  within 10 working days that the application for certification

14  has been denied and the reasons for denial. The Office of

15  Tourism, Trade, and Economic Development has final approval

16  authority for certification under this section.

17         6.5.a.  A business certified to receive this exemption

18  may apply once each year for the exemption refund of all

19  eligible taxes paid during the previous calendar year. The

20  refund shall be subject to a specific annual appropriation

21  from the Legislature to the Office of Tourism, Trade, and

22  Economic Development for the payment of such refunds.

23         b.  The first claim submitted by a business may include

24  all eligible expenditures made after the date the business was

25  certified.

26         c.  To apply for the annual exemption refund, the

27  business shall submit a refund claim to the Office of Tourism,

28  Trade, and Economic Development, which claim indicates and

29  documents the sales and use taxes otherwise payable paid on

30  eligible machinery and equipment. The claim must shall also

31  indicate, for program evaluation purposes only, the average

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    Florida Senate - 1998                           CS for SB 1564
    301-1981-98




  1  number of full-time equivalent employees at the facility over

  2  the preceding calendar year, the average wage and benefits

  3  paid to those employees over the preceding calendar year, and

  4  the total investment made in real and tangible personal

  5  property over the preceding calendar year or, for the first

  6  claim submitted, since the date of certification. The

  7  department shall assist the Office of Tourism, Trade, and

  8  Economic Development in evaluating and verifying information

  9  provided in the application for exemption an annual refund.

10         d.  An application for refund must be submitted to the

11  Office of Tourism, Trade, and Economic Development by February

12  15 of each year. In the event that the Legislature does not

13  appropriate an amount sufficient to satisfy all refund

14  applications received by the Office of Tourism, Trade, and

15  Economic Development, the office shall, not later than April

16  15 of each year, determine the proportion of each refund claim

17  which shall be paid by dividing the amount appropriated for

18  tax refunds for the fiscal year by the total of refund claims

19  received. The amount of each claim for a tax refund shall be

20  multiplied by the resulting quotient. If, after the payment of

21  all such refund claims, there are appropriated funds

22  remaining, the office shall recalculate the proportion for

23  each refund claim and adjust the amount of each claim

24  accordingly.

25         d.e.  The Office of Tourism, Trade, and Economic

26  Development may use the information reported on the claims for

27  evaluation purposes only and shall prepare an annual report on

28  the exemption program and its cost and impact. The annual

29  report for the preceding fiscal year shall be submitted to the

30  Governor, the President of the Senate, and the Speaker of the

31  House of Representatives by September 30 of each fiscal year.

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    Florida Senate - 1998                           CS for SB 1564
    301-1981-98




  1  This report may be submitted in conjunction with the annual

  2  report required in s. 288.095(3)(c).

  3         7.6.  A business certified to receive this exemption

  4  may elect to designate one or more state universities or

  5  community colleges as recipients of up to 100 percent of the

  6  amount of the exemption refund for which they may qualify. To

  7  receive these funds the tax refund or portion of the tax

  8  refund, the institution must agree to match the these funds so

  9  earned with equivalent cash, programs, services, or other

10  in-kind support on a one-to-one basis in the pursuit of

11  research and development projects as requested by the

12  certified business. The rights to any patents, royalties, or

13  real or intellectual property must be vested in the business

14  unless otherwise agreed to by the business and the university

15  or community college.

16         8.7.  As used in this paragraph, the term:

17         a.  "Predominately" means at least 50 percent of the

18  time in qualifying research and development.

19         b.  "Research and development" means basic and applied

20  research in the science or engineering, as well as the design,

21  development, and testing of prototypes or processes of new or

22  improved products. Research and development does not include

23  market research, routine consumer product testing, sales

24  research, research in the social sciences or psychology,

25  nontechnological activities, or technical services.

26         c.  "Silicon technology products" means raw silicon

27  wafers that are transformed into semiconductor memory or logic

28  wafers, including wafers containing mixed memory and logic

29  circuits; related assembly and test operations; active-matrix

30  flat panel displays; semiconductor chips; and related silicon

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    Florida Senate - 1998                           CS for SB 1564
    301-1981-98




  1  technology products as determined by the Office of Tourism,

  2  Trade, and Economic Development.

  3         Section 2.  This act shall take effect July 1, 1998.

  4

  5          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
  6                             SB 1564

  7

  8  The committee substitute adds a provision requiring the
    purchaser of items exempt under the bill to certify to the
  9  seller that the purchaser is entitled to the exemption. Based
    on this certification, the seller is relieved of
10  responsibility to collect tax and recourse for any tax which
    may be due is to the purchaser.
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