Senate Bill 2028er

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    1999 Legislature                                CS for SB 2028



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  2         An act relating to the tax on sales, use, and

  3         other transactions; amending s. 212.02, F.S.;

  4         providing that a sale for resale includes the

  5         sale of certain tangible personal property used

  6         or consumed by a government contractor in the

  7         performance of a contract with the United

  8         States Department of Defense or the National

  9         Aeronautics and Space Administration under

10         certain conditions; providing legislative

11         intent; amending s. 212.08, F.S.; providing an

12         exemption for sales to or use by a government

13         contractor of overhead materials used or

14         consumed in the performance of such a contract

15         under certain conditions; providing

16         definitions; providing a schedule for

17         implementing the exemption; providing

18         legislative intent; providing an effective

19         date.

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

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23         Section 1.  Paragraph (a) of subsection (14) and

24  subsection (20) of section 212.02, Florida Statutes, 1998

25  Supplement, are amended to read:

26         212.02  Definitions.--The following terms and phrases

27  when used in this chapter have the meanings ascribed to them

28  in this section, except where the context clearly indicates a

29  different meaning:

30         (14)(a)  "Retail sale" or a "sale at retail" means a

31  sale to a consumer or to any person for any purpose other than


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    ENROLLED

    1999 Legislature                                CS for SB 2028



  1  for resale in the form of tangible personal property or

  2  services taxable under this chapter, and includes all such

  3  transactions that may be made in lieu of retail sales or sales

  4  at retail. A sale for resale includes a sale of qualifying

  5  property. As used in this paragraph, the term "qualifying

  6  property" means tangible personal property, other than

  7  electricity, which is used or consumed by a government

  8  contractor in the performance of a qualifying contract as

  9  defined in s. 212.06(17)(c), to the extent that the cost of

10  the property is allocated or charged as a direct item of cost

11  to such contract, title to which property vests in or passes

12  to the government under the contract. The term "government

13  contractor" includes prime contractors and subcontractors. As

14  used in this paragraph, a cost is a "direct item of cost" if

15  it is a "direct cost" as defined in 48 C.F.R. s.

16  9904.418-30(a)(2), or similar successor provisions, including

17  costs identified specifically with a particular contract.

18         (20)  "Use" means and includes the exercise of any

19  right or power over tangible personal property incident to the

20  ownership thereof, or interest therein, except that it does

21  not include the sale at retail of that property in the regular

22  course of business. The term "use" does not include the loan

23  of an automobile by a motor vehicle dealer to a high school

24  for use in its driver education and safety program. The term

25  "use" does not include a contractor's use of "qualifying

26  property" as defined by paragraph (14)(a).

27         Section 2.  It is the intent of the Legislature that

28  the amendments to sections 212.02(14)(a) and (20), Florida

29  Statutes, 1998 Supplement, made by this act clarify and

30  confirm existing law with respect to the tax imposed by

31  chapter 212, Florida Statutes.


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    1999 Legislature                                CS for SB 2028



  1         Section 3.  Subsection (17) is added to section 212.08,

  2  Florida Statutes, 1998 Supplement, to read:

  3         212.08  Sales, rental, use, consumption, distribution,

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

  5  the rental, the use, the consumption, the distribution, and

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

  7  following are hereby specifically exempt from the tax imposed

  8  by this chapter.

  9         (17)  EXEMPTIONS; CERTAIN GOVERNMENT CONTRACTORS.--

10         (a)  Subject to paragraph (d), the tax imposed by this

11  chapter does not apply to the sale to or use by a government

12  contractor of overhead materials. The term "government

13  contractor" includes prime contractors and subcontractors.

14         (b)  As used in this subsection, the term "overhead

15  materials" means all tangible personal property, other than

16  qualifying property as defined in s. 212.02(14)(a) and

17  electricity, which is used or consumed in the performance of a

18  qualifying contract, title to which property vests in or

19  passes to the government under the contract.

20         (c)  As used in this subsection and in s. 212.02(14(a),

21  the term "qualifying contract" means a contract with the

22  United States Department of Defense or the National

23  Aeronautics and Space Administration, or a subcontract

24  thereunder, but does not include a contract or subcontract for

25  the repair, alteration, improvement, or construction of real

26  property, except to the extent that purchases under such a

27  contract would otherwise be exempt from the tax imposed by

28  this chapter.

29         (d)  The exemption provided in this subsection applies

30  as follows:

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    1999 Legislature                                CS for SB 2028



  1         1.  Beginning July 1, 1999, the tax imposed by this

  2  chapter shall be applicable to 80 percent of the sales price

  3  or cost price of such overhead materials.

  4         2.  Beginning July 1, 2000, the tax imposed by this

  5  chapter shall be applicable to 60 percent of the sales price

  6  or cost price of such overhead materials.

  7         3.  Beginning July 1, 2001, the tax imposed by this

  8  chapter shall be applicable to 40 percent of the sales price

  9  or cost price of such overhead materials.

10         4.  Beginning July 1, 2002, the tax imposed by this

11  chapter shall be applicable to 20 percent of the sales price

12  or cost price of such overhead materials.

13         5.  Beginning July 1, 2003, the entire sales price or

14  cost price of such overhead materials is exempt from the tax

15  imposed by this chapter.

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17  The exemption provided in this subsection does not apply to

18  any part of the cost of overhead materials allocated to a

19  contract that is not a qualifying contract.

20         (e)  Possession by a seller of a resale certificate or

21  direct-pay permit relieves the seller from the responsibility

22  of collecting the tax, and the department shall look solely to

23  the contractor for recovery of such tax if it determines that

24  the contractor was not entitled to the exemption. The

25  contractor shall self-accrue and remit any applicable sales or

26  use tax due with respect to overhead materials and with

27  respect to costs allocable to contracts that are not

28  qualifying contracts. The department may amend its rules to

29  reflect the use of resale certificates and direct-pay permits

30  with respect to the exemption provided for in this subsection.

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    1999 Legislature                                CS for SB 2028



  1         (f)  This subsection is not an expression of

  2  legislative intent as to the applicability of any tax to any

  3  sale or use of overhead materials prior to July 1, 1999. In

  4  addition, this subsection does not imply that transactions or

  5  costs that are not described in this subsection are taxable.

  6         Section 4.  This act shall take effect July 1, 1999.

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