Senate Bill 0992c1

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    Florida Senate - 1999                            CS for SB 992

    By the Committee on Fiscal Resource and Senator Horne





    314-2149-99

  1                      A bill to be entitled

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

  3         transactions; amending s. 212.08, F.S.;

  4         providing an exemption for works of art

  5         purchased or imported for the purpose of

  6         donation to an educational institution;

  7         providing requirements with respect thereto;

  8         revising the industries to which the exemption

  9         for electricity or steam used in certain

10         manufacturing and related operations applies;

11         providing an exemption for labor charges for,

12         and parts and materials used in, the repair of

13         machinery and equipment used to produce

14         tangible personal property at a fixed location

15         by specified industries; providing a schedule

16         for implementing the exemption; providing an

17         effective date.

18

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

20

21         Section 1.  Paragraphs (dd) and (ii) of subsection (7)

22  of section 212.08, Florida Statutes, 1998 Supplement, are

23  amended, and paragraph (zz) is added to that subsection, to

24  read:

25         212.08  Sales, rental, use, consumption, distribution,

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

27  the rental, the use, the consumption, the distribution, and

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

29  following are hereby specifically exempt from the tax imposed

30  by this chapter.

31         (7)  MISCELLANEOUS EXEMPTIONS.--

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    Florida Senate - 1999                            CS for SB 992
    314-2149-99




  1         (dd)  Works of art.--

  2         1.  Also exempt are works of art sold to or used by an

  3  educational institution, as defined in sub-subparagraph

  4  (o)2.d.

  5         2.  This exemption also applies to the sale to or use

  6  in this state of any work of art by any person if it was

  7  purchased or imported exclusively for the purpose of being

  8  donated to any educational institution or loaned to and made

  9  available for display by any educational institution, provided

10  that the term of the loan agreement is for at least 10 years.

11         3.  The exemption provided by this paragraph for

12  donations is allowed only if the person who purchased the work

13  of art transfers title to the donated work of art to an

14  educational institution. Such transfer of title shall be

15  evidenced by an affidavit meeting requirements established by

16  rule to document entitlement to the exemption. Nothing in this

17  paragraph shall preclude a work of art donated to an

18  educational institution from remaining in the possession of

19  the donor or purchaser, as long as title to the work of art

20  lies with the educational institution.

21         4.3.  A work of art is presumed to have been purchased

22  in or imported into this state exclusively for loan as

23  provided in subparagraph 2., if it is so loaned or placed in

24  storage in preparation for such a loan within 90 days after

25  purchase or importation, whichever is later; but a work of art

26  is not deemed to be placed in storage in preparation for loan

27  for purposes of this exemption if it is displayed at any place

28  other than an educational institution.

29         5.4.  The exemptions provided by this paragraph are

30  allowed only if the person who purchased the work of art gives

31  to the vendor an affidavit meeting the requirements,

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    Florida Senate - 1999                            CS for SB 992
    314-2149-99




  1  established by rule, to document entitlement to the exemption.

  2  The person who purchased the work of art shall forward a copy

  3  of such affidavit to the Department of Revenue at the time it

  4  is issued to the vendor.

  5         6.5.  The exemption for loans provided by subparagraph

  6  2. applies only for the period during which a work of art is

  7  in the possession of the educational institution or is in

  8  storage before transfer of possession to that institution; and

  9  when it ceases to be so possessed or held, tax based upon the

10  sales price paid by the owner is payable, and the statute of

11  limitations provided in s. 95.091 shall begin to run at that

12  time. However, tax shall not become due if the work of art is

13  donated to an educational institution after the loan ceases.

14         7.  Any educational institution to which a work of art

15  has been donated pursuant to this paragraph shall make

16  available to the department the title to the work of art and

17  any other relevant information.  Any educational institution

18  which has received a work of art on loan pursuant to this

19  paragraph shall make available to the department information

20  relating to the work of art. Any educational institution that

21  transfers from its possession a work of art as defined by this

22  paragraph which has been loaned to it must notify the

23  Department of Revenue within 60 days after the transfer.

24         8.6.  For purposes of the exemptions provided by this

25  paragraph, the term "work of art" includes pictorial

26  representations, sculpture, jewelry, antiques, stamp

27  collections and coin collections, and other tangible personal

28  property, the value of which is attributable predominantly to

29  its artistic, historical, political, cultural, or social

30  importance.

31

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    Florida Senate - 1999                            CS for SB 992
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  1         7.  This paragraph is a remedial clarification of

  2  legislative intent and applies to all taxes that remain open

  3  to assessment or contest on July 1, 1992.

  4         (ii)  Certain electricity or steam uses.--

  5         1.  Charges for electricity or steam used to operate

  6  machinery and equipment at a fixed location in this state when

  7  such machinery and equipment is used to manufacture, process,

  8  compound, produce, or prepare for shipment items of tangible

  9  personal property for sale, or to operate pollution control

10  equipment, recycling equipment, maintenance equipment, or

11  monitoring or control equipment used in such operations are

12  exempt to the extent provided in this paragraph. In order to

13  qualify for this exemption, 75 percent or more of the

14  electricity used at the fixed location must be used to operate

15  qualifying machinery or equipment. If less than 75 percent but

16  50 percent or more of the electricity is used at a fixed

17  location to operate qualifying machinery or equipment, then it

18  is presumed that 50 percent of the charge for electricity is

19  for nonexempt purposes.

20         2.  This exemption applies only to industries

21  classified under SIC Industry Major Group Numbers 10, 12, 13,

22  14, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34,

23  35, 36, 37, 38, and 39 and Industry Group Number 212. As used

24  in this paragraph, "SIC" means those classifications contained

25  in the Standard Industrial Classification Manual, 1987, as

26  published by the Office of Management and Budget, Executive

27  Office of the President.

28         3.  Possession by a seller of a written certification

29  by the purchaser, certifying the purchaser's entitlement to an

30  exemption permitted by this subsection, relieves the seller

31  from the responsibility of collecting the tax on the

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    Florida Senate - 1999                            CS for SB 992
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  1  nontaxable amounts, and the department shall look solely to

  2  the purchaser for recovery of such tax if it determines that

  3  the purchaser was not entitled to the exemption.

  4         4.  Such exemption shall be applied as follows:

  5         a.  Beginning July 1, 1996, 20 percent of the charges

  6  for such electricity shall be exempt.

  7         b.  Beginning July 1, 1997, 40 percent of the charges

  8  for such electricity shall be exempt.

  9         c.  Beginning July 1, 1998, 60 percent of the charges

10  for such electricity or steam shall be exempt.

11         d.  Beginning July 1, 1999, 80 percent of the charges

12  for such electricity or steam shall be exempt.

13         e.  Beginning July 1, 2000, 100 percent of the charges

14  for such electricity or steam shall be exempt.

15         5.  Notwithstanding any other provision in this

16  paragraph to the contrary, in order to receive the exemption

17  provided in this paragraph a taxpayer must first register with

18  the WAGES Program Business Registry established by the local

19  WAGES coalition for the area in which the taxpayer is located.

20  Such registration establishes a commitment on the part of the

21  taxpayer to hire WAGES program participants to the maximum

22  extent possible consistent with the nature of their business.

23         6.a.  In order to determine whether the exemption

24  provided in this paragraph from the tax on charges for

25  electricity or steam has an effect on retaining or attracting

26  companies to this state, the Office of Program Policy Analysis

27  and Governmental Accountability shall periodically monitor and

28  report on the industries receiving the exemption.

29         b.  The first report shall be submitted no later than

30  January 1, 1997, and must be conducted in such a manner as to

31  specifically determine the number of companies within each SIC

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    Florida Senate - 1999                            CS for SB 992
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  1  Industry Major Group receiving the exemption as of September

  2  1, 1996, and the number of individuals employed by companies

  3  within each SIC Industry Major Group receiving the exemption

  4  as of September 1, 1996.

  5         c.  The second report shall be submitted no later than

  6  January 1, 2001, and must be comprehensive in scope, but, at a

  7  minimum, must be conducted in such a manner as to specifically

  8  determine the number of companies within each SIC Industry

  9  Major Group receiving the exemption as of September 1, 2000,

10  the number of individuals employed by companies within each

11  SIC Industry Major Group receiving the exemption as of

12  September 1, 2000, whether the change, if any, in such number

13  of companies or employees is attributable to the exemption

14  provided in this paragraph, whether it would be sound public

15  policy to continue or discontinue the exemption, and the

16  consequences of doing so.

17         d.  Both reports shall be submitted to the President of

18  the Senate, the Speaker of the House of Representatives, the

19  Senate Minority Leader, and the House Minority Leader.

20         (zz)  Certain repair and labor charges.--

21         1.  Subject to the provisions of subparagraphs 2. and

22  3., there is exempt from the tax imposed by this chapter all

23  labor charges for the repair of, and parts and materials used

24  in the repair of and incorporated into, industrial machinery

25  and equipment which is used for the manufacture, processing,

26  compounding, or production of items of tangible personal

27  property at a fixed location within this state.

28         2.  This exemption applies only to industries

29  classified under SIC Industry Major Group Numbers 10, 12, 13,

30  14, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34,

31  36, 37, 38, and 39 and Industry Group Number 212. As used in

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    Florida Senate - 1999                            CS for SB 992
    314-2149-99




  1  this subparagraph, "SIC" means those classifications contained

  2  in the Standard Industrial Classification Manual, 1987, as

  3  published by the Office of Management and Budget, Executive

  4  Office of the President.

  5         3.  This exemption shall be applied as follows:

  6         a.  Beginning July 1, 1999, 25 percent of such charges

  7  for repair parts and labor shall be exempt.

  8         b.  Beginning July 1, 2000, 50 percent of such charges

  9  for repair parts and labor shall be exempt.

10         c.  Beginning July 1, 2001, 75 percent of such charges

11  for repair parts and labor shall be exempt.

12         d.  Beginning July 1, 2002, 100 percent of such charges

13  for repair parts and labor shall be exempt.

14

15  Exemptions provided to any entity by this subsection shall not

16  inure to any transaction otherwise taxable under this chapter

17  when payment is made by a representative or employee of such

18  entity by any means, including, but not limited to, cash,

19  check, or credit card even when that representative or

20  employee is subsequently reimbursed by such entity.

21         Section 2.  This act shall take effect July 1, 1999.

22

23          STATEMENT OF SUBSTANTIAL CHANGES CONTAINED IN
                       COMMITTEE SUBSTITUTE FOR
24                              SB 992

25

26  The committee substitute makes the following changes to SB
    992:
27
    Adds to the exemption on the sales tax for electricity and
28  steam used to operate machinery and equipment pursuant to s.
    212.08(7)(ii), F.S., the cigar manufacturing industry.
29
    Provides a sales tax exemption for donations of works of art
30  to an educational institution where the title to the work of
    art is transferred to the educational institution.
31

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