| 1 | The Economic Development, Trade & Banking Committee recommends |
| 2 | the following: |
| 3 |
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| 4 | Council/Committee Substitute |
| 5 | Remove the entire bill and insert: |
| 6 | A bill to be entitled |
| 7 | An act relating to the tax on sales, use, and other |
| 8 | transactions; amending s. 212.052, F.S.; deleting an |
| 9 | exception to an exemption from the tax for research or |
| 10 | development costs; providing an exemption for machinery |
| 11 | and equipment used predominantly for research and |
| 12 | development activities; defining the terms "predominantly" |
| 13 | and "machinery and equipment"; authorizing a business to |
| 14 | designate one or more state universities or community |
| 15 | colleges as recipients of part or all of the amount of the |
| 16 | exemption under specified conditions; providing that the |
| 17 | business retains the rights to patents, royalties, or real |
| 18 | or intellectual property unless an agreement specifies |
| 19 | otherwise; providing an effective date. |
| 20 |
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| 21 | Be It Enacted by the Legislature of the State of Florida: |
| 22 |
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| 23 | Section 1. Subsection (2) of section 212.052, Florida |
| 24 | Statutes, is amended, present subsections (3), (4), and (5) of |
| 25 | said section are renumbered as subsections (4), (5), and (6), |
| 26 | respectively, and a new subsection (3) is added to said section, |
| 27 | to read: |
| 28 | 212.052 Research or development costs; exemption.-- |
| 29 | (2) Notwithstanding any provision of this chapter to the |
| 30 | contrary, any person, including an affiliated group as defined |
| 31 | in s. 1504 of the Internal Revenue Code of 1954, as amended, who |
| 32 | manufactures, produces, compounds, processes, or fabricates in |
| 33 | any manner tangible personal property for such taxpayer's own |
| 34 | use directly and solely in research or development shall not be |
| 35 | subject to the tax imposed by this chapter upon the cost of the |
| 36 | product so manufactured, produced, compounded, processed, or |
| 37 | fabricated. However, the tax imposed by this chapter shall be |
| 38 | due on the purchase, rental, or repair of real property or |
| 39 | tangible personal property employed in research or development |
| 40 | which is subject to the tax imposed by this chapter at the time |
| 41 | of purchase or rental. |
| 42 | (3)(a) Machinery and equipment used predominantly for |
| 43 | research and development are exempt from the tax imposed by this |
| 44 | chapter. For the purposes of this subsection, the term |
| 45 | "predominantly" means at least 50 percent of the time. The term |
| 46 | "machinery and equipment" includes, but is not limited to, |
| 47 | molds, dies, machine tooling, other appurtenances or accessories |
| 48 | to machinery and equipment, testing and measuring equipment, |
| 49 | test beds, computers, and software, whether purchased or self- |
| 50 | fabricated, and, if self-fabricated, includes materials and |
| 51 | labor for design, fabrication, and assembly. |
| 52 | (b) A business may designate one or more state |
| 53 | universities or community colleges as recipients of up to 100 |
| 54 | percent of the amount of the exemption for which the business |
| 55 | qualifies. To receive these funds, the state university or |
| 56 | community college must agree to match the funds so earned with |
| 57 | equivalent cash, programs, services, or other in-kind support on |
| 58 | a one-to-one basis in the pursuit of research and development |
| 59 | projects as requested by the certified business. The rights to |
| 60 | any patents, royalties, or real or intellectual property must be |
| 61 | vested in the business unless otherwise agreed to by the |
| 62 | business and the state university or community college. |
| 63 | Section 2. This act shall take effect July 1, 2005. |