Senate Bill sb1132

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    Florida Senate - 2006                                  SB 1132

    By Senator King





    8-815-06

  1                      A bill to be entitled

  2         An act relating to enterprise zone tax

  3         incentives; amending s. 212.08, F.S.; limiting

  4         the tax exemption provided for the

  5         rehabilitation of real property to one parcel

  6         of real property unless there is a change in

  7         ownership; providing for retroactive

  8         application; amending ss. 212.096 and 220.03,

  9         F.S.; redefining the term "new job has been

10         created" for purposes of the enterprise zone

11         jobs credit against the sales tax and the

12         income tax code; amending s. 220.13, F.S.;

13         revising the expiration date of a provision

14         requiring that certain wages, salaries, and ad

15         valorem school taxes be added to adjusted

16         federal income; amending s. 220.181, F.S.;

17         revising the requirement for demonstrating an

18         increase in the number of jobs for purposes of

19         qualifying for the enterprise zone jobs credit;

20         providing an effective date.

21  

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

23  

24         Section 1.  Paragraph (g) of subsection (5) of section

25  212.08, Florida Statutes, is amended to read:

26         212.08  Sales, rental, use, consumption, distribution,

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

28  the rental, the use, the consumption, the distribution, and

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

30  following are hereby specifically exempt from the tax imposed

31  by this chapter.

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    Florida Senate - 2006                                  SB 1132
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 1         (5)  EXEMPTIONS; ACCOUNT OF USE.--

 2         (g)  Building materials used in the rehabilitation of

 3  real property located in an enterprise zone.--

 4         1.  Building materials used in the rehabilitation of

 5  real property located in an enterprise zone shall be exempt

 6  from the tax imposed by this chapter upon an affirmative

 7  showing to the satisfaction of the department that the items

 8  have been used for the rehabilitation of real property located

 9  in an enterprise zone. Except as provided in subparagraph 2.,

10  this exemption inures to the owner, lessee, or lessor of the

11  rehabilitated real property located in an enterprise zone only

12  through a refund of previously paid taxes. To receive a refund

13  pursuant to this paragraph, the owner, lessee, or lessor of

14  the rehabilitated real property located in an enterprise zone

15  must file an application under oath with the governing body or

16  enterprise zone development agency having jurisdiction over

17  the enterprise zone where the business is located, as

18  applicable, which includes:

19         a.  The name and address of the person claiming the

20  refund.

21         b.  An address and assessment roll parcel number of the

22  rehabilitated real property in an enterprise zone for which a

23  refund of previously paid taxes is being sought.

24         c.  A description of the improvements made to

25  accomplish the rehabilitation of the real property.

26         d.  A copy of the building permit issued for the

27  rehabilitation of the real property.

28         e.  A sworn statement, under the penalty of perjury,

29  from the general contractor licensed in this state with whom

30  the applicant contracted to make the improvements necessary to

31  accomplish the rehabilitation of the real property, which

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    Florida Senate - 2006                                  SB 1132
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 1  statement lists the building materials used in the

 2  rehabilitation of the real property, the actual cost of the

 3  building materials, and the amount of sales tax paid in this

 4  state on the building materials. In the event that a general

 5  contractor has not been used, the applicant shall provide this

 6  information in a sworn statement, under the penalty of

 7  perjury. Copies of the invoices which evidence the purchase of

 8  the building materials used in such rehabilitation and the

 9  payment of sales tax on the building materials shall be

10  attached to the sworn statement provided by the general

11  contractor or by the applicant. Unless the actual cost of

12  building materials used in the rehabilitation of real property

13  and the payment of sales taxes due thereon is documented by a

14  general contractor or by the applicant in this manner, the

15  cost of such building materials shall be an amount equal to 40

16  percent of the increase in assessed value for ad valorem tax

17  purposes.

18         f.  The identifying number assigned pursuant to s.

19  290.0065 to the enterprise zone in which the rehabilitated

20  real property is located.

21         g.  A certification by the local building code

22  inspector that the improvements necessary to accomplish the

23  rehabilitation of the real property are substantially

24  completed.

25         h.  Whether the business is a small business as defined

26  by s. 288.703(1).

27         i.  If applicable, the name and address of each

28  permanent employee of the business, including, for each

29  employee who is a resident of an enterprise zone, the

30  identifying number assigned pursuant to s. 290.0065 to the

31  enterprise zone in which the employee resides.

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 1         2.  This exemption inures to a city, county, other

 2  governmental agency, or nonprofit community-based organization

 3  through a refund of previously paid taxes if the building

 4  materials used in the rehabilitation of real property located

 5  in an enterprise zone are paid for from the funds of a

 6  community development block grant, State Housing Initiatives

 7  Partnership Program, or similar grant or loan program. To

 8  receive a refund pursuant to this paragraph, a city, county,

 9  other governmental agency, or nonprofit community-based

10  organization must file an application which includes the same

11  information required to be provided in subparagraph 1. by an

12  owner, lessee, or lessor of rehabilitated real property. In

13  addition, the application must include a sworn statement

14  signed by the chief executive officer of the city, county,

15  other governmental agency, or nonprofit community-based

16  organization seeking a refund which states that the building

17  materials for which a refund is sought were paid for from the

18  funds of a community development block grant, State Housing

19  Initiatives Partnership Program, or similar grant or loan

20  program.

21         3.  Within 10 working days after receipt of an

22  application, the governing body or enterprise zone development

23  agency shall review the application to determine if it

24  contains all the information required pursuant to subparagraph

25  1. or subparagraph 2. and meets the criteria set out in this

26  paragraph. The governing body or agency shall certify all

27  applications that contain the information required pursuant to

28  subparagraph 1. or subparagraph 2. and meet the criteria set

29  out in this paragraph as eligible to receive a refund. If

30  applicable, the governing body or agency shall also certify if

31  20 percent of the employees of the business are residents of

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    Florida Senate - 2006                                  SB 1132
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 1  an enterprise zone, excluding temporary and part-time

 2  employees. The certification shall be in writing, and a copy

 3  of the certification shall be transmitted to the executive

 4  director of the Department of Revenue. The applicant shall be

 5  responsible for forwarding a certified application to the

 6  department within the time specified in subparagraph 4.

 7         4.  An application for a refund pursuant to this

 8  paragraph must be submitted to the department within 6 months

 9  after the rehabilitation of the property is deemed to be

10  substantially completed by the local building code inspector

11  or by September 1 after the rehabilitated property is first

12  subject to assessment.

13         5.  The provisions of s. 212.095 do not apply to any

14  refund application made pursuant to this paragraph. No more

15  than one exemption through a refund of previously paid taxes

16  for the rehabilitation of real property shall be permitted for

17  any one parcel of property unless there is a change in

18  ownership of the real property. No refund shall be granted

19  pursuant to this paragraph unless the amount to be refunded

20  exceeds $500. No refund granted pursuant to this paragraph

21  shall exceed the lesser of 97 percent of the Florida sales or

22  use tax paid on the cost of the building materials used in the

23  rehabilitation of the real property as determined pursuant to

24  sub-subparagraph 1.e. or $5,000, or, if no less than 20

25  percent of the employees of the business are residents of an

26  enterprise zone, excluding temporary and part-time employees,

27  the amount of refund granted pursuant to this paragraph shall

28  not exceed the lesser of 97 percent of the sales tax paid on

29  the cost of such building materials or $10,000. A refund

30  approved pursuant to this paragraph shall be made within 30

31  days of formal approval by the department of the application

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    Florida Senate - 2006                                  SB 1132
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 1  for the refund. This subparagraph applies retroactively to

 2  July 1, 2005.

 3         6.  The department shall adopt rules governing the

 4  manner and form of refund applications and may establish

 5  guidelines as to the requisites for an affirmative showing of

 6  qualification for exemption under this paragraph.

 7         7.  The department shall deduct an amount equal to 10

 8  percent of each refund granted under the provisions of this

 9  paragraph from the amount transferred into the Local

10  Government Half-cent Sales Tax Clearing Trust Fund pursuant to

11  s. 212.20 for the county area in which the rehabilitated real

12  property is located and shall transfer that amount to the

13  General Revenue Fund.

14         8.  For the purposes of the exemption provided in this

15  paragraph:

16         a.  "Building materials" means tangible personal

17  property which becomes a component part of improvements to

18  real property.

19         b.  "Real property" has the same meaning as provided in

20  s. 192.001(12).

21         c.  "Rehabilitation of real property" means the

22  reconstruction, renovation, restoration, rehabilitation,

23  construction, or expansion of improvements to real property.

24         d.  "Substantially completed" has the same meaning as

25  provided in s. 192.042(1).

26         9.  This paragraph expires on the date specified in s.

27  290.016 for the expiration of the Florida Enterprise Zone Act.

28         Section 2.  Paragraph (e) of subsection (1) of section

29  212.096, Florida Statutes, is amended to read:

30         212.096  Sales, rental, storage, use tax; enterprise

31  zone jobs credit against sales tax.--

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    Florida Senate - 2006                                  SB 1132
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 1         (1)  For the purposes of the credit provided in this

 2  section:

 3         (e)  "New job has been created" means that the total

 4  number of full-time jobs has increased in an enterprise zone

 5  during from the average of the previous 12 months prior to the

 6  application date, as demonstrated to the department by a

 7  business located in the enterprise zone.

 8  

 9  A person shall be deemed to be employed if the person performs

10  duties in connection with the operations of the business on a

11  regular, full-time basis, provided the person is performing

12  such duties for an average of at least 36 hours per week each

13  month. The person must be performing such duties at a business

14  site located in the enterprise zone.

15         Section 3.  Paragraph (ff) of subsection (1) of section

16  220.03, Florida Statutes, is amended to read:

17         220.03  Definitions.--

18         (1)  SPECIFIC TERMS.--When used in this code, and when

19  not otherwise distinctly expressed or manifestly incompatible

20  with the intent thereof, the following terms shall have the

21  following meanings:

22         (ff)  "New job has been created" means that the total

23  number of full-time jobs has increased in an enterprise zone

24  during from the average of the previous 12 months prior to the

25  application date, as demonstrated to the department by a

26  business located in the enterprise zone.

27         Section 4.  Paragraph (a) of subsection (1) of section

28  220.13, Florida Statutes, is amended to read:

29         220.13  "Adjusted federal income" defined.--

30         (1)  The term "adjusted federal income" means an amount

31  equal to the taxpayer's taxable income as defined in

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 1  subsection (2), or such taxable income of more than one

 2  taxpayer as provided in s. 220.131, for the taxable year,

 3  adjusted as follows:

 4         (a)  Additions.--There shall be added to such taxable

 5  income:

 6         1.  The amount of any tax upon or measured by income,

 7  excluding taxes based on gross receipts or revenues, paid or

 8  accrued as a liability to the District of Columbia or any

 9  state of the United States which is deductible from gross

10  income in the computation of taxable income for the taxable

11  year.

12         2.  The amount of interest which is excluded from

13  taxable income under s. 103(a) of the Internal Revenue Code or

14  any other federal law, less the associated expenses disallowed

15  in the computation of taxable income under s. 265 of the

16  Internal Revenue Code or any other law, excluding 60 percent

17  of any amounts included in alternative minimum taxable income,

18  as defined in s. 55(b)(2) of the Internal Revenue Code, if the

19  taxpayer pays tax under s. 220.11(3).

20         3.  In the case of a regulated investment company or

21  real estate investment trust, an amount equal to the excess of

22  the net long-term capital gain for the taxable year over the

23  amount of the capital gain dividends attributable to the

24  taxable year.

25         4.  That portion of the wages or salaries paid or

26  incurred for the taxable year which is equal to the amount of

27  the credit allowable for the taxable year under s. 220.181.

28  The provisions of this subparagraph shall expire and be void

29  on the date specified in s. 290.016 for the expiration of the

30  Florida Enterprise Zone Act June 30, 2005.

31  

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    Florida Senate - 2006                                  SB 1132
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 1         5.  That portion of the ad valorem school taxes paid or

 2  incurred for the taxable year which is equal to the amount of

 3  the credit allowable for the taxable year under s. 220.182.

 4  The provisions of this subparagraph shall expire and be void

 5  on the date specified in s. 290.016 for the expiration of the

 6  Florida Enterprise Zone Act June 30, 2005.

 7         6.  The amount of emergency excise tax paid or accrued

 8  as a liability to this state under chapter 221 which tax is

 9  deductible from gross income in the computation of taxable

10  income for the taxable year.

11         7.  That portion of assessments to fund a guaranty

12  association incurred for the taxable year which is equal to

13  the amount of the credit allowable for the taxable year.

14         8.  In the case of a nonprofit corporation which holds

15  a pari-mutuel permit and which is exempt from federal income

16  tax as a farmers' cooperative, an amount equal to the excess

17  of the gross income attributable to the pari-mutuel operations

18  over the attributable expenses for the taxable year.

19         9.  The amount taken as a credit for the taxable year

20  under s. 220.1895.

21         10.  Up to nine percent of the eligible basis of any

22  designated project which is equal to the credit allowable for

23  the taxable year under s. 220.185.

24         11.  The amount taken as a credit for the taxable year

25  under s. 220.187.

26         Section 5.  Paragraph (a) of subsection (1) of section

27  220.181, Florida Statutes, is amended to read:

28         220.181  Enterprise zone jobs credit.--

29         (1)(a)  There shall be allowed a credit against the tax

30  imposed by this chapter to any business located in an

31  enterprise zone which demonstrates to the department that, on

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 1  the date of application, the total number of full-time jobs

 2  has increased during from the average of the previous 12

 3  months. The credit shall be computed as 20 percent of the

 4  actual monthly wages paid in this state to each new employee

 5  hired when a new job has been created, as defined under s.

 6  220.03(1)(ff), unless the business is located in a rural

 7  enterprise zone, pursuant to s. 290.004(6), in which case the

 8  credit shall be 30 percent of the actual monthly wages paid.

 9  If no less than 20 percent of the employees of the business

10  are residents of an enterprise zone, excluding temporary and

11  part-time employees, the credit shall be computed as 30

12  percent of the actual monthly wages paid in this state to each

13  new employee hired when a new job has been created, unless the

14  business is located in a rural enterprise zone, in which case

15  the credit shall be 45 percent of the actual monthly wages

16  paid, for a period of up to 24 consecutive months. If the new

17  employee hired when a new job is created is a participant in

18  the welfare transition program, the following credit shall be

19  a percent of the actual monthly wages paid: 40 percent for $4

20  above the hourly federal minimum wage rate; 41 percent for $5

21  above the hourly federal minimum wage rate; 42 percent for $6

22  above the hourly federal minimum wage rate; 43 percent for $7

23  above the hourly federal minimum wage rate; and 44 percent for

24  $8 above the hourly federal minimum wage rate.

25         Section 6.  This act shall take effect July 1, 2006.

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 1            *****************************************

 2                          SENATE SUMMARY

 3    Limits the tax exemption provided for the rehabilitation
      of real property to one parcel of real property unless
 4    there is a change in ownership, applicable retroactive to
      July 1, 2005. Redefines the term "new job has been
 5    created" for purposes of the enterprise zone jobs credit
      against the sales tax and the income tax code. Revises
 6    the expiration date of a provision requiring that certain
      wages, salaries, and ad valorem school taxes be added to
 7    adjusted federal income. Revises the requirement for
      demonstrating an increase in the number of jobs for
 8    purposes of qualifying for a tax credit.

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