House Bill 0545

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    Florida House of Representatives - 1999                 HB 545

        By Representative Sublette






  1                      A bill to be entitled

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

  3         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

  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 intent; amending

11         s. 212.06, F.S.; providing an exemption for

12         sales to or use by a government contractor of

13         overhead materials used or consumed in

14         performance of such a contract under certain

15         conditions; providing definitions; providing a

16         schedule for implementing the exemption;

17         providing intent; providing an effective date.

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

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21         Section 1.  (1)  Paragraph (a) of subsection (14) of

22  section 212.02, Florida Statutes, 1998 Supplement, is amended

23  to read:

24         212.02  Definitions.--The following terms and phrases

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

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

27  different meaning:

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

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

30  for resale in the form of tangible personal property or

31  services taxable under this chapter, and includes all such

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    Florida House of Representatives - 1999                 HB 545

    534-204-99






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

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

  3  property. As used in this paragraph, "qualifying property"

  4  means tangible personal property, other than electricity, used

  5  or consumed by a government contractor in the performance of a

  6  qualifying contract, as defined by s. 212.06(17)(b), the cost

  7  of which property is allocated or charged as a direct item of

  8  cost to such contract, and title to which property vests in or

  9  passes to the government under the contract. The contractor's

10  use of qualifying property in performing a qualifying contract

11  shall not be deemed a "use" within the meaning of subsection

12  (20) or any other provision of this chapter.

13         (2)  It is the intent of the Legislature that the

14  amendment to s. 212.02(14)(a), Florida Statutes, 1998

15  Supplement, by this section clarifies and confirms existing

16  law with respect to the tax imposed by chapter 212, Florida

17  Statutes.

18         Section 2.  (1)  Subsection (17) is added to section

19  212.06, Florida Statutes, 1998 Supplement, to read:

20         212.06  Sales, storage, use tax; collectible from

21  dealers; "dealer" defined; dealers to collect from purchasers;

22  legislative intent as to scope of tax.--

23         (17)(a)  Subject to paragraph (c), the tax imposed by

24  this chapter does not apply to the sale to or use by a

25  government contractor of overhead materials.

26         (b)  As used in this subsection:

27         1.  "Overhead materials" means any tangible personal

28  property, other than electricity, used or consumed in the

29  performance of a qualifying contract, the cost of which is

30  allocated, in whole or in part, to two or more contracts, at

31  least one of which is a qualifying contract, title to which

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    Florida House of Representatives - 1999                 HB 545

    534-204-99






  1  property vests in or passes to the government under the

  2  contract.

  3         2.  "Qualifying contract" means a contract with the

  4  United States Department of Defense or the National

  5  Aeronautics and Space Administration, or a subcontract

  6  thereunder, which relates to matters of national defense, to

  7  space flight as defined by s. 212.02(23), or to other National

  8  Aeronautics and Space Administration or Department of Defense

  9  aviation or aerospace efforts or programs.

10         (c)  The exemption provided in this subsection shall

11  apply as follows:

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

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

14  or cost price of such overhead materials.

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

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

17  or cost price of such overhead materials.

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

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

20  or cost price of such overhead materials.

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

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

23  or cost price of such overhead materials.

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

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

26  imposed by this chapter.

27         (2)  Nothing in this section shall be construed as an

28  expression of legislative intent as to the applicability of

29  any tax to any sale or use of overhead materials prior to July

30  1, 1999. Further, nothing in this section shall be construed

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    Florida House of Representatives - 1999                 HB 545

    534-204-99






  1  as implying that transactions or costs not described in this

  2  section are taxable.

  3         Section 3.  This act shall take effect July 1, 1999.

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  6                          HOUSE SUMMARY

  7
      Provides that a sale for resale under ch. 212, F.S.,
  8    includes the sale of certain tangible personal property
      used or consumed by a government contractor in
  9    performance of a contract with the United States
      Department of Defense or the National Aeronautics and
10    Space Administration under certain conditions. Provides a
      sales tax exemption for sales to or use by a government
11    contractor of overhead materials which are used or
      consumed in performance of such a contract under certain
12    conditions. Provides a schedule for implementing the
      exemption over a 5-year period beginning July 1, 1999.
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