House Bill hb0527c1

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    Florida House of Representatives - 2001              CS/HB 527

        By the Committee on Fiscal Policy & Resources and
    Representatives Wallace, Brown, Stansel, Baxley, Brummer,
    Bennett, Atwater, Baker, Kendrick, Pickens and Attkisson




  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         revising the exemption for industrial machinery

  5         and equipment used in expanding spaceport or

  6         manufacturing facilities to provide for a full,

  7         rather than partial, exemption; providing an

  8         effective date.

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

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12         Section 1.  Paragraph (b) of subsection (5) of section

13  212.08, Florida Statutes, is amended to read:

14         212.08  Sales, rental, use, consumption, distribution,

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

16  the rental, the use, the consumption, the distribution, and

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

18  following are hereby specifically exempt from the tax imposed

19  by this chapter.

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

21         (b)  Machinery and equipment used to increase

22  productive output.--

23         1.  Industrial machinery and equipment purchased for

24  exclusive use by a new business in spaceport activities as

25  defined by s. 212.02 or for use in new businesses which

26  manufacture, process, compound, or produce for sale items of

27  tangible personal property at fixed locations are exempt from

28  the tax imposed by this chapter upon an affirmative showing by

29  the taxpayer to the satisfaction of the department that such

30  items are used in a new business in this state. Such purchases

31  must be made prior to the date the business first begins its

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    Florida House of Representatives - 2001              CS/HB 527

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  1  productive operations, and delivery of the purchased item must

  2  be made within 12 months of that date.

  3         2.a.  Industrial machinery and equipment purchased for

  4  exclusive use by an expanding facility which is engaged in

  5  spaceport activities as defined by s. 212.02 or for use in

  6  expanding manufacturing facilities or plant units which

  7  manufacture, process, compound, or produce for sale items of

  8  tangible personal property at fixed locations in this state

  9  are exempt from the any amount of tax imposed by this chapter

10  in excess of $50,000 per calendar year upon an affirmative

11  showing by the taxpayer to the satisfaction of the department

12  that such items are used to increase the productive output of

13  such expanded facility or business by not less than 10

14  percent.

15         b.  Notwithstanding any other provision of this

16  section, industrial machinery and equipment purchased for use

17  in expanding printing manufacturing facilities or plant units

18  that manufacture, process, compound, or produce for sale items

19  of tangible personal property at fixed locations in this state

20  are exempt from any amount of tax imposed by this chapter upon

21  an affirmative showing by the taxpayer to the satisfaction of

22  the department that such items are used to increase the

23  productive output of such an expanded business by not less

24  than 10 percent.

25         3.a.  To receive an exemption provided by subparagraph

26  1. or subparagraph 2., a qualifying business entity shall

27  apply to the department for a temporary tax exemption permit.

28  The application shall state that a new business exemption or

29  expanded business exemption is being sought. Upon a tentative

30  affirmative determination by the department pursuant to

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  1  subparagraph 1. or subparagraph 2., the department shall issue

  2  such permit.

  3         b.  The applicant shall be required to maintain all

  4  necessary books and records to support the exemption. Upon

  5  completion of purchases of qualified machinery and equipment

  6  pursuant to subparagraph 1. or subparagraph 2., the temporary

  7  tax permit shall be delivered to the department or returned to

  8  the department by certified or registered mail.

  9         c.  If, in a subsequent audit conducted by the

10  department, it is determined that the machinery and equipment

11  purchased as exempt under subparagraph 1. or subparagraph 2.

12  did not meet the criteria mandated by this paragraph or if

13  commencement of production did not occur, the amount of taxes

14  exempted at the time of purchase shall immediately be due and

15  payable to the department by the business entity, together

16  with the appropriate interest and penalty, computed from the

17  date of purchase, in the manner prescribed by this chapter.

18         d.  In the event a qualifying business entity fails to

19  apply for a temporary exemption permit or if the tentative

20  determination by the department required to obtain a temporary

21  exemption permit is negative, a qualifying business entity

22  shall receive the exemption provided in subparagraph 1. or

23  subparagraph 2. through a refund of previously paid taxes. No

24  refund may be made for such taxes unless the criteria mandated

25  by subparagraph 1. or subparagraph 2. have been met and

26  commencement of production has occurred.

27         4.  The department shall promulgate rules governing

28  applications for, issuance of, and the form of temporary tax

29  exemption permits; provisions for recapture of taxes; and the

30  manner and form of refund applications and may establish

31  guidelines as to the requisites for an affirmative showing of

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  1  increased productive output, commencement of production, and

  2  qualification for exemption.

  3         5.  The exemptions provided in subparagraphs 1. and 2.

  4  do not apply to machinery or equipment purchased or used by

  5  electric utility companies, communications companies, oil or

  6  gas exploration or production operations, publishing firms

  7  that do not export at least 50 percent of their finished

  8  product out of the state, any firm subject to regulation by

  9  the Division of Hotels and Restaurants of the Department of

10  Business and Professional Regulation, or any firm which does

11  not manufacture, process, compound, or produce for sale items

12  of tangible personal property or which does not use such

13  machinery and equipment in spaceport activities as required by

14  this paragraph. The exemptions provided in subparagraphs 1.

15  and 2. shall apply to machinery and equipment purchased for

16  use in phosphate or other solid minerals severance, mining, or

17  processing operations only by way of a prospective credit

18  against taxes due under chapter 211 for taxes paid under this

19  chapter on such machinery and equipment.

20         6.  For the purposes of the exemptions provided in

21  subparagraphs 1. and 2., these terms have the following

22  meanings:

23         a.  "Industrial machinery and equipment" means "section

24  38 property" as defined in s. 48(a)(1)(A) and (B)(i) of the

25  Internal Revenue Code, provided "industrial machinery and

26  equipment" shall be construed by regulations adopted by the

27  Department of Revenue to mean tangible property used as an

28  integral part of spaceport activities or of the manufacturing,

29  processing, compounding, or producing for sale of items of

30  tangible personal property. Such term includes parts and

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  1  accessories only to the extent that the exemption thereof is

  2  consistent 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         Section 2.  This act shall take effect July 1, 2001.

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