Senate Bill 0110c1
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Florida Senate - 1999 CS for SB 110
By the Committee on Fiscal Resource and Senator McKay
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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 that an exemption from the tax
5 applies to machinery and equipment purchased
6 for use in phosphate or other solid-mineral
7 severance, mining, or processing operations
8 under specified conditions; providing for
9 accountability; providing an effective date.
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11 Be It Enacted by the Legislature of the State of Florida:
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13 Section 1. Paragraph (b) of subsection (5) of section
14 212.08, Florida Statutes, 1998 Supplement, is amended to read:
15 212.08 Sales, rental, use, consumption, distribution,
16 and storage tax; specified exemptions.--The sale at retail,
17 the rental, the use, the consumption, the distribution, and
18 the storage to be used or consumed in this state of the
19 following are hereby specifically exempt from the tax imposed
20 by this chapter.
21 (5) EXEMPTIONS; ACCOUNT OF USE.--
22 (b) Machinery and equipment used to increase
23 productive output.--
24 1. Industrial machinery and equipment purchased for
25 use in new businesses which manufacture, process, compound, or
26 produce for sale, or for exclusive use in spaceport activities
27 as defined in s. 212.02, items of tangible personal property
28 at fixed locations are exempt from the tax imposed by this
29 chapter upon an affirmative showing by the taxpayer to the
30 satisfaction of the department that such items are used in a
31 new business in this state. Such purchases must be made prior
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Florida Senate - 1999 CS for SB 110
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1 to the date the business first begins its productive
2 operations, and delivery of the purchased item must be made
3 within 12 months of that date.
4 2.a. Industrial machinery and equipment purchased for
5 use in expanding manufacturing facilities or plant units which
6 manufacture, process, compound, or produce for sale, or for
7 exclusive use in spaceport activities as defined in s. 212.02,
8 items of tangible personal property at fixed locations in this
9 state are exempt from any amount of tax imposed by this
10 chapter in excess of $50,000 per calendar year upon an
11 affirmative showing by the taxpayer to the satisfaction of the
12 department that such items are used to increase the productive
13 output of such expanded business by not less than 10 percent.
14 b. Notwithstanding any other provision of this
15 section, industrial machinery and equipment purchased for use
16 in expanding printing manufacturing facilities or plant units
17 that manufacture, process, compound, or produce for sale items
18 of tangible personal property at fixed locations in this state
19 are exempt from any amount of tax imposed by this chapter upon
20 an affirmative showing by the taxpayer to the satisfaction of
21 the department that such items are used to increase the
22 productive output of such an expanded business by not less
23 than 10 percent.
24 3.a. To receive an exemption provided by subparagraph
25 1. or subparagraph 2., a qualifying business entity shall
26 apply to the department for a temporary tax exemption permit.
27 The application shall state that a new business exemption or
28 expanded business exemption is being sought. Upon a tentative
29 affirmative determination by the department pursuant to
30 subparagraph 1. or subparagraph 2., the department shall issue
31 such permit.
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Florida Senate - 1999 CS for SB 110
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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 Senate - 1999 CS for SB 110
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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. The exemptions provided in
14 subparagraphs 1. and 2. shall apply to machinery and equipment
15 purchased for use in phosphate or other solid-minerals
16 severance, mining, or processing operations only by way of a
17 prospective credit against taxes due under chapter 211 for
18 taxes paid under this chapter on such machinery and equipment.
19 6. For the purposes of the exemptions provided in
20 subparagraphs 1. and 2., these terms have the following
21 meanings:
22 a. "Industrial machinery and equipment" means "section
23 38 property" as defined in s. 48(a)(1)(A) and (B)(i) of the
24 Internal Revenue Code, provided "industrial machinery and
25 equipment" shall be construed by regulations adopted by the
26 Department of Revenue to mean tangible property used as an
27 integral part of the manufacturing, processing, compounding,
28 or producing for sale, or for exclusive use in spaceport
29 activities as defined in s. 212.02, of items of tangible
30 personal property. Such term includes parts and accessories
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1 only to the extent that the exemption thereof is consistent
2 with the provisions of this paragraph.
3 b. "Productive output" means the number of units
4 actually produced by a single plant or operation in a single
5 continuous 12-month period, irrespective of sales. Increases
6 in productive output shall be measured by the output for 12
7 continuous months immediately following the completion of
8 installation of such machinery or equipment over the output
9 for the 12 continuous months immediately preceding such
10 installation. However, if a different 12-month continuous
11 period of time would more accurately reflect the increase in
12 productive output of machinery and equipment purchased to
13 facilitate an expansion, the increase in productive output may
14 be measured during that 12-month continuous period of time if
15 such time period is mutually agreed upon by the Department of
16 Revenue and the expanding business prior to the commencement
17 of production; provided, however, in no case may such time
18 period begin later than 2 years following the completion of
19 installation of the new machinery and equipment. The units
20 used to measure productive output shall be physically
21 comparable between the two periods, irrespective of sales.
22 7. Notwithstanding any other provision in this
23 paragraph to the contrary, in order to receive the exemption
24 provided in this paragraph a taxpayer must register with the
25 WAGES Program Business Registry established by the local WAGES
26 coalition for the area in which the taxpayer is located. Such
27 registration establishes a commitment on the part of the
28 taxpayer to hire WAGES program participants to the maximum
29 extent possible consistent with the nature of their business.
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Florida Senate - 1999 CS for SB 110
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1 Section 2. (1) In order to qualify for the exemption
2 and credit created in this act, an expanding business must
3 demonstrate the following:
4 (a) For a business that has 2,500 or fewer Florida
5 employees, the creation of new Florida jobs in an amount equal
6 to at least 5 percent of its Florida employees; or
7 (b) For a business that has more than 2,500 Florida
8 employees, the creation of new Florida jobs in an amount equal
9 to at least 3 percent of its Florida employees.
10 (2) In order to qualify for the exemption and credit
11 created in this act, a new business must demonstrate the
12 creation of at least 100 new Florida jobs.
13 (3) For purposes of this section, the term "new
14 Florida job" means a new position created and filled within 24
15 months after completion of construction of the new or expanded
16 facility and includes a transfer of a position from an
17 existing Florida operation as long as the transfer is the
18 result of the closure or reduction of the other Florida
19 operation. For an expanding business, the number of existing
20 Florida employees shall be determined as of the date on which
21 the business commences construction of the expansion.
22 (4) The Office of Tourism, Trade, and Economic
23 Development shall:
24 (a) For an expanding business, document the number of
25 persons employed in Florida by such business as of the date of
26 commencement of construction of the expansion and the number
27 of new Florida jobs created by such business within 24 months
28 following the completion of construction of the expansion;
29 (b) For a new business, document the number of new
30 Florida jobs created by such business within 24 months after
31 completion of construction of the new business; and
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Florida Senate - 1999 CS for SB 110
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1 (c) Certify such to the Department of Revenue.
2 Section 3. This act shall take effect July 1, 1999.
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4 STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
COMMITTEE SUBSTITUTE FOR
5 SB 110
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7 The committee substitute makes the following changes to SB
110:
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1) Adds to the exemption, other solid minerals severance
9 operations.
10 2) Provides that in order for a phosphate or other solid
minerals severance, mining, or processing operations to
11 qualify for this exemption and tax credit, such business
must produce a certain number of new Florida jobs.
12 Specifically, businesses must demonstrate the following:
13 a) For an expanding business that has 2,500 or fewer
Florida employees, they must create new Florida
14 jobs in an amount equal to at least 5 percent of
its Florida employees.
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b) For an expanding business that has more than 2,500
16 Florida employees, they must create new Florida
jobs in amount equal to at least 3 percent of its
17 Florida employees.
18 c) For a new business, they must demonstrate the
creation of at least 100 new Florida jobs.
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Provides a definition of "new Florida jobs"; provides that the
20 Office of Tourism, Trade, and Economic Development will be
responsible for documenting the number of persons employed in
21 Florida by qualified businesses and be responsible to certify
such to the Department of Revenue.
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