Florida Senate - 2013 COMMITTEE AMENDMENT
Bill No. SB 518
Barcode 233250
LEGISLATIVE ACTION
Senate . House
Comm: RCS .
04/01/2013 .
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The Committee on Commerce and Tourism (Hukill) recommended the
following:
1 Senate Amendment (with title amendment)
2
3 Delete everything after the enacting clause
4 and insert:
5 Section 1. Paragraphs (e) through (q) of subsection (5) of
6 section 212.08, Florida Statutes, are redesignated as paragraphs
7 (d) through (p), respectively, and paragraphs (b), (d), and (h)
8 of that subsection and paragraph (f) of subsection (15) of that
9 section are amended, to read:
10 212.08 Sales, rental, use, consumption, distribution, and
11 storage tax; specified exemptions.—The sale at retail, the
12 rental, the use, the consumption, the distribution, and the
13 storage to be used or consumed in this state of the following
14 are hereby specifically exempt from the tax imposed by this
15 chapter.
16 (5) EXEMPTIONS; ACCOUNT OF USE.—
17 (b) Machinery and equipment used by manufacturers to
18 increase productive output.—
19 1. Industrial machinery and equipment purchased for
20 exclusive use in this state by a new business in spaceport
21 activities as defined by s. 212.02 or for use in new businesses
22 that manufacture, process, compound, or produce for sale items
23 of tangible personal property at fixed locations are exempt from
24 the tax imposed by this chapter if, at the time of purchase, the
25 purchaser furnishes the seller with a signed certificate stating
26 that the items to be exempted are for exclusive use as provided
27 in this paragraph. The certificate relieves the seller of the
28 responsibility of collecting the tax on the sale of such items
29 and the department shall look solely to the purchaser for
30 recovery of the tax if it determines that the purchaser was not
31 entitled to the exemption upon an affirmative showing by the
32 taxpayer to the satisfaction of the department that such items
33 are used in a new business in this state. Such purchases must be
34 made before the date the business first begins its productive
35 operations, and delivery of the purchased item must be made
36 within 12 months after that date.
37 2. Industrial machinery and equipment purchased for
38 exclusive use by an expanding facility which is engaged in
39 spaceport activities as defined by s. 212.02 or for use in
40 expanding manufacturing facilities or plant units which
41 manufacture, process, compound, or produce for sale items of
42 tangible personal property at fixed locations in this state are
43 exempt from any amount of tax imposed by this chapter upon an
44 affirmative showing by the taxpayer to the satisfaction of the
45 department that such items are used to increase the productive
46 output of such expanded facility or business by not less than 5
47 percent.
48 3.a. To receive an exemption provided by subparagraph 1. or
49 subparagraph 2., a qualifying business entity shall apply to the
50 department for a temporary tax exemption permit. The application
51 shall state that a new business exemption or expanded business
52 exemption is being sought. Upon a tentative affirmative
53 determination by the department pursuant to subparagraph 1. or
54 subparagraph 2., the department shall issue such permit.
55 b. The applicant shall maintain all necessary books and
56 records to support the exemption. Upon completion of purchases
57 of qualified machinery and equipment pursuant to subparagraph 1.
58 or subparagraph 2., the temporary tax permit shall be delivered
59 to the department or returned to the department by certified or
60 registered mail.
61 c. If, in a subsequent audit conducted by the department,
62 it is determined that the machinery and equipment purchased as
63 exempt under subparagraph 1. or subparagraph 2. did not meet the
64 criteria mandated by this paragraph or if commencement of
65 production did not occur, the amount of taxes exempted at the
66 time of purchase shall immediately be due and payable to the
67 department by the business entity, together with the appropriate
68 interest and penalty, computed from the date of purchase, in the
69 manner prescribed by this chapter.
70 d. If a qualifying business entity fails to apply for a
71 temporary exemption permit or if the tentative determination by
72 the department required to obtain a temporary exemption permit
73 is negative, a qualifying business entity shall receive the
74 exemption provided in subparagraph 1. or subparagraph 2. through
75 a refund of previously paid taxes. No refund may be made for
76 such taxes unless the criteria mandated by subparagraph 1. or
77 subparagraph 2. have been met and commencement of production has
78 occurred.
79 4. The department shall adopt rules governing applications
80 for, issuance of, and the form of temporary tax exemption
81 permits; provisions for recapture of taxes; and the manner and
82 form of refund applications, and may establish guidelines as to
83 the requisites for an affirmative showing of increased
84 productive output, commencement of production, and qualification
85 for exemption.
86 2.5. The exemption does exemptions provided in
87 subparagraphs 1. and 2. do not apply to machinery or equipment
88 purchased or used by electric utility companies, communications
89 companies, oil or gas exploration or production operations,
90 publishing firms that do not export at least 50 percent of their
91 finished product out of the state, any firm subject to
92 regulation by the Division of Hotels and Restaurants of the
93 Department of Business and Professional Regulation, or any firm
94 that does not manufacture, process, compound, or produce for
95 sale items of tangible personal property or that does not use
96 such machinery and equipment in spaceport activities as required
97 by this paragraph. The exemption applies exemptions provided in
98 subparagraphs 1. and 2. shall apply to machinery and equipment
99 purchased for use in phosphate or other solid minerals
100 severance, mining, or processing operations.
101 3.6. For the purposes of the exemption, the term exemptions
102 provided in subparagraphs 1. and 2., these terms have the
103 following meanings:
104 a. “Industrial machinery and equipment” means tangible
105 personal property or other property that has a depreciable life
106 of 3 years or more and that is used as an integral part in the
107 manufacturing, processing, compounding, or production of
108 tangible personal property for sale or is exclusively used in
109 spaceport activities. A building and its structural components
110 are not industrial machinery and equipment unless the building
111 or structural component is so closely related to the industrial
112 machinery and equipment that it houses or supports that the
113 building or structural component can be expected to be replaced
114 when the machinery and equipment are replaced. Heating and air
115 conditioning systems are not industrial machinery and equipment
116 unless the sole justification for their installation is to meet
117 the requirements of the production process, even though the
118 system may provide incidental comfort to employees or serve, to
119 an insubstantial degree, nonproduction activities. The term
120 includes parts and accessories for industrial machinery and
121 equipment only to the extent that the exemption thereof is
122 consistent with the provisions of this paragraph.
123 b. “Productive output” means the number of units actually
124 produced by a single plant, operation, or product line in a
125 single continuous 12-month period, irrespective of sales.
126 Increases in productive output shall be measured by the output
127 for 12 continuous months selected by the expanding business
128 after completion of the installation of such machinery or
129 equipment over the output for the 12 continuous months
130 immediately preceding such installation. However, in no case may
131 such time period begin later than 2 years after completion of
132 the installation of the new machinery and equipment. The units
133 used to measure productive output shall be physically comparable
134 between the two periods, irrespective of sales.
135 (d) Machinery and equipment used under federal procurement
136 contract.—
137 1. Industrial machinery and equipment purchased by an
138 expanding business which manufactures tangible personal property
139 pursuant to federal procurement regulations at fixed locations
140 in this state are exempt from the tax imposed in this chapter
141 upon an affirmative showing by the taxpayer to the satisfaction
142 of the department that such items are used to increase the
143 implicit productive output of the expanded business by not less
144 than 10 percent. The percentage of increase is measured as
145 deflated implicit productive output for the calendar year during
146 which the installation of the machinery or equipment is
147 completed or during which commencement of production utilizing
148 such items is begun divided by the implicit productive output
149 for the preceding calendar year. In no case may the commencement
150 of production begin later than 2 years following completion of
151 installation of the machinery or equipment.
152 2. The amount of the exemption allowed shall equal the
153 taxes otherwise imposed by this chapter on qualifying industrial
154 machinery or equipment reduced by the percentage of gross
155 receipts from cost-reimbursement type contracts attributable to
156 the plant or operation to total gross receipts so attributable,
157 accrued for the year of completion or commencement.
158 3. The exemption provided by this paragraph shall inure to
159 the taxpayer only through refund of previously paid taxes. Such
160 refund shall be made within 30 days of formal approval by the
161 department of the taxpayer’s application, which application may
162 be made on an annual basis following installation of the
163 machinery or equipment.
164 4. For the purposes of this paragraph, the term:
165 a. “Cost-reimbursement type contracts” has the same meaning
166 as in 32 C.F.R. s. 3-405.
167 b. “Deflated implicit productive output” means the product
168 of implicit productive output times the quotient of the national
169 defense implicit price deflator for the preceding calendar year
170 divided by the deflator for the year of completion or
171 commencement.
172 c. “Eligible costs” means the total direct and indirect
173 costs, as defined in 32 C.F.R. ss. 15-202 and 15-203, excluding
174 general and administrative costs, selling expenses, and profit,
175 defined by the uniform cost-accounting standards adopted by the
176 Cost-Accounting Standards Board created pursuant to 50 U.S.C. s.
177 2168.
178 d. “Implicit productive output” means the annual eligible
179 costs attributable to all contracts or subcontracts subject to
180 federal procurement regulations of the single plant or operation
181 at which the machinery or equipment is used.
182 e. “Industrial machinery and equipment” means tangible
183 personal property or other property that has a depreciable life
184 of 3 years or more, that qualifies as an eligible cost under
185 federal procurement regulations, and that is used as an integral
186 part of the process of production of tangible personal property.
187 A building and its structural components are not industrial
188 machinery and equipment unless the building or structural
189 component is so closely related to the industrial machinery and
190 equipment that it houses or supports that the building or
191 structural component can be expected to be replaced when the
192 machinery and equipment are replaced. Heating and air
193 conditioning systems are not industrial machinery and equipment
194 unless the sole justification for their installation is to meet
195 the requirements of the production process, even though the
196 system may provide incidental comfort to employees or serve, to
197 an insubstantial degree, nonproduction activities. The term
198 includes parts and accessories only to the extent that the
199 exemption of such parts and accessories is consistent with the
200 provisions of this paragraph.
201 f. “National defense implicit price deflator” means the
202 national defense implicit price deflator for the gross national
203 product as determined by the Bureau of Economic Analysis of the
204 United States Department of Commerce.
205 5. The exclusions provided in subparagraph (b)5. apply to
206 this exemption. This exemption applies only to machinery or
207 equipment purchased pursuant to production contracts with the
208 United States Department of Defense and Armed Forces, the
209 National Aeronautics and Space Administration, and other federal
210 agencies for which the contracts are classified for national
211 security reasons. In no event shall the provisions of this
212 paragraph apply to any expanding business the increase in
213 productive output of which could be measured under the
214 provisions of sub-subparagraph (b)6.b. as physically comparable
215 between the two periods.
216 (g)(h) Business property used in an enterprise zone.—
217 1. Business property purchased for use by businesses
218 located in an enterprise zone which is subsequently used in an
219 enterprise zone is shall be exempt from the tax imposed by this
220 chapter. This exemption inures to the business only through a
221 refund of previously paid taxes. A refund shall be authorized
222 upon an affirmative showing by the taxpayer, to the satisfaction
223 of the department, that the requirements of this paragraph have
224 been met.
225 2. To receive a refund, the business must file under oath
226 with the governing body or enterprise zone development agency
227 that has having jurisdiction over the enterprise zone where the
228 business is located, as applicable, an application, under oath,
229 which includes:
230 a. The name and address of the business claiming the
231 refund.
232 b. The identifying number assigned pursuant to s. 290.0065
233 to the enterprise zone in which the business is located.
234 c. A specific description of the property for which a
235 refund is sought, including its serial number or other permanent
236 identification number.
237 d. The location of the property.
238 e. The sales invoice or other proof of purchase of the
239 property, showing the amount of sales tax paid, the date of
240 purchase, and the name and address of the sales tax dealer from
241 whom the property was purchased.
242 f. Whether the business is a small business as defined by
243 s. 288.703.
244 g. If applicable, the name and address of each permanent
245 employee of the business, including, for each employee who is a
246 resident of an enterprise zone, the identifying number assigned
247 pursuant to s. 290.0065 to the enterprise zone in which the
248 employee resides.
249 3. Within 10 working days after receipt of an application,
250 the governing body or enterprise zone development agency shall
251 review the application to determine if it contains all the
252 information required pursuant to subparagraph 2. and meets the
253 criteria set out in this paragraph. The governing body or agency
254 shall certify all applications that contain the information
255 required pursuant to subparagraph 2. and meet the criteria set
256 out in this paragraph as eligible to receive a refund. If
257 applicable, the governing body or agency shall also certify if
258 20 percent of the employees of the business are residents of an
259 enterprise zone, excluding temporary and part-time employees.
260 The certification must shall be in writing, and a copy of the
261 certification must shall be transmitted to the executive
262 director of the Department of Revenue. The business is shall be
263 responsible for forwarding a certified application to the
264 department within the time specified in subparagraph 4.
265 4. An application for a refund pursuant to this paragraph
266 must be submitted to the department within 6 months after the
267 tax is due on the business property that is purchased.
268 5. The amount refunded on purchases of business property
269 under this paragraph shall be the lesser of 97 percent of the
270 sales tax paid on such business property or $5,000, or, if no
271 less than 20 percent or more of the employees of the business
272 are residents of an enterprise zone, excluding temporary and
273 part-time employees, the amount refunded on purchases of
274 business property under this paragraph shall be the lesser of 97
275 percent of the sales tax paid on such business property or
276 $10,000. A refund must approved pursuant to this paragraph shall
277 be made within 30 days after formal approval by the department
278 of the application for the refund. A refund may not be granted
279 under this paragraph unless the amount to be refunded exceeds
280 $100 in sales tax paid on purchases made within a 60-day time
281 period.
282 6. The department shall adopt rules governing the manner
283 and form of refund applications and may establish guidelines as
284 to the requisites for an affirmative showing of qualification
285 for exemption under this paragraph.
286 7. If the department determines that the business property
287 is used outside an enterprise zone within 3 years after from the
288 date of purchase, the amount of taxes refunded to the business
289 purchasing such business property is shall immediately be due
290 and payable to the department by the business, together with the
291 appropriate interest and penalty, computed from the date of
292 purchase, in the manner provided by this chapter.
293 Notwithstanding this subparagraph, business property used
294 exclusively in:
295 a. Licensed commercial fishing vessels,
296 b. Fishing guide boats, or
297 c. Ecotourism guide boats
298
299 that leave and return to a fixed location within an area
300 designated under s. 379.2353, Florida Statutes 2010, are
301 eligible for the exemption provided under this paragraph if all
302 requirements of this paragraph are met. Such vessels and boats
303 must be owned by a business that is eligible to receive the
304 exemption provided under this paragraph. This exemption does not
305 apply to the purchase of a vessel or boat.
306 8. The department shall deduct an amount equal to 10
307 percent of each refund granted under this paragraph from the
308 amount transferred into the Local Government Half-cent Sales Tax
309 Clearing Trust Fund pursuant to s. 212.20 for the county area in
310 which the business property is located and shall transfer that
311 amount to the General Revenue Fund.
312 9. For the purposes of this exemption, the term “business
313 property” means new or used property defined as “recovery
314 property” in s. 168(c) of the Internal Revenue Code of 1954, as
315 amended, except:
316 a. Property classified as 3-year property under s.
317 168(c)(2)(A) of the Internal Revenue Code of 1954, as amended;
318 b. Industrial machinery and equipment as defined in
319 subparagraph (b)3. sub-subparagraph (b)6.a. and eligible for
320 exemption under paragraph (b);
321 c. Building materials as defined in sub-subparagraph
322 (g)8.a.; and
323 d. Business property having a sales price of under $5,000
324 per unit.
325 10. This paragraph expires on the date specified in s.
326 290.016 for the expiration of the Florida Enterprise Zone Act.
327 (15) ELECTRICAL ENERGY USED IN AN ENTERPRISE ZONE.—
328 (f) For the purpose of the exemption provided in this
329 subsection, the term “qualified business” means a business that
330 which is:
331 1. First occupying a new structure to which electrical
332 service, other than that used for construction purposes, has not
333 been previously provided or furnished;
334 2. Newly occupying an existing, remodeled, renovated, or
335 rehabilitated structure to which electrical service, other than
336 that used for remodeling, renovation, or rehabilitation of the
337 structure, has not been provided or furnished in the three
338 preceding billing periods; or
339 3. Occupying a new, remodeled, rebuilt, renovated, or
340 rehabilitated structure for which a refund has been granted
341 pursuant to paragraph (5)(f) (5)(g).
342 Section 2. Effective July 1, 2013, paragraph (c) of
343 subsection (2) of section 288.1045, Florida Statutes, is
344 amended, and present paragraphs (d) through (h) of that
345 subsection are redesignated as paragraphs (c) through (g),
346 respectively, to read:
347 288.1045 Qualified defense contractor and space flight
348 business tax refund program.—
349 (2) GRANTING OF A TAX REFUND; ELIGIBLE AMOUNTS.—
350 (c) A qualified applicant may not receive more than $7
351 million in tax refunds pursuant to this section in all fiscal
352 years.
353 Section 3. Effective July 1, 2013, paragraph (c) of
354 subsection (3) of section 288.106, Florida Statutes, is amended
355 to read:
356 288.106 Tax refund program for qualified target industry
357 businesses.—
358 (3) TAX REFUND; ELIGIBLE AMOUNTS.—
359 (c) A qualified target industry business may not receive
360 refund payments of more than 25 percent of the total tax refunds
361 specified in the tax refund agreement under subparagraph
362 (5)(a)1. in any fiscal year. Further, a qualified target
363 industry business may not receive more than $1.5 million in
364 refunds under this section in any single fiscal year, or more
365 than $2.5 million in any single fiscal year if the project is
366 located in an enterprise zone. A qualified target industry
367 business may not receive more than $7 million in refund payments
368 under this section in all fiscal years, or more than $7.5
369 million if the project is located in an enterprise zone.
370 Section 4. Section 212.0602, Florida Statutes, is amended
371 to read:
372 212.0602 Education; limited exemption.—To facilitate
373 investment in education and job training, there is also exempt
374 from the taxes levied under this chapter, subject to the
375 provisions of this section, the purchase or lease of materials,
376 equipment, and other items or the license in or lease of real
377 property by any entity, institution, or organization that is
378 primarily engaged in teaching students to perform any of the
379 activities or services described in s. 212.031(1)(a)9., that
380 conducts classes at a fixed location located in this state, that
381 is licensed under chapter 1005, and that has at least 500
382 enrolled students. Any entity, institution, or organization
383 meeting the requirements of this section shall be deemed to
384 qualify for the exemptions under in ss. 212.031(1)(a)9. and
385 212.08(5)(e) 212.08(5)(f) and (12), and to qualify for an
386 exemption for its purchase or lease of materials, equipment, and
387 other items used for education or demonstration of the school’s
388 curriculum, including supporting operations. Nothing in This
389 section does not shall preclude an entity described in this
390 section from qualifying for any other exemption provided under
391 for in this chapter.
392 Section 5. Paragraph (c) of subsection (1) of section
393 220.183, Florida Statutes, is amended to read:
394 220.183 Community contribution tax credit.—
395 (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
396 CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
397 SPENDING.—
398 (c) The total amount of tax credit which may be granted for
399 all programs approved under this section, s. 212.08(5)(o)
400 212.08(5)(p), and s. 624.5105 is $10.5 million annually for
401 projects that provide homeownership opportunities for low-income
402 households or very-low-income households as those terms are
403 defined in s. 420.9071(19) and (28) and $3.5 million annually
404 for all other projects.
405 Section 6. Paragraph (a) of subsection (9) of section
406 290.0056, Florida Statutes, is amended to read:
407 290.0056 Enterprise zone development agency.—
408 (9) The following powers and responsibilities shall be
409 performed by the governing body creating the enterprise zone
410 development agency acting as the managing agent of the
411 enterprise zone development agency, or, contingent upon approval
412 by such governing body, such powers and responsibilities shall
413 be performed by the enterprise zone development agency:
414 (a) To review, process, and certify applications for state
415 enterprise zone tax incentives pursuant to ss. 212.08(5)(f), (g)
416 212.08(5)(g), (h), and (15); 212.096; 220.181; and 220.182.
417 Section 7. Subsections (4) and (5) of section 290.007,
418 Florida Statutes, are amended to read:
419 290.007 State incentives available in enterprise zones.—The
420 following incentives are provided by the state to encourage the
421 revitalization of enterprise zones:
422 (4) The sales tax exemption for building materials used in
423 the rehabilitation of real property in enterprise zones provided
424 in s. 212.08(5)(f) 212.08(5)(g).
425 (5) The sales tax exemption for business equipment used in
426 an enterprise zone provided in s. 212.08(5)(g) 212.08(5)(h).
427 Section 8. Paragraph (c) of subsection (1) of section
428 624.5105, Florida Statutes, is amended to read:
429 624.5105 Community contribution tax credit; authorization;
430 limitations; eligibility and application requirements;
431 administration; definitions; expiration.—
432 (1) AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.—
433 (c) The total amount of tax credit which may be granted for
434 all programs approved under this section and ss. 212.08(5)(o)
435 212.08(5)(p) and 220.183 is $10.5 million annually for projects
436 that provide homeownership opportunities for low-income
437 households or very-low-income households as those terms are
438 defined in s. 420.9071(19) and (28) and $3.5 million annually
439 for all other projects.
440 Section 9. Subsection (1) of section 1011.94, Florida
441 Statutes, is amended to read:
442 1011.94 University Major Gifts Program.—
443 (1) The There is established a University Major Gifts
444 Program is established. The purpose of the program is to enable
445 each university to provide donors with an incentive in the form
446 of matching grants for donations for the establishment of
447 permanent endowments and sales tax exemption matching funds
448 received pursuant to s. 212.08(5)(i) 212.08(5)(j), which must be
449 invested, with the proceeds of the investment used to support
450 libraries and instruction and research programs, as defined by
451 the Board of Governors.
452 Section 10. Except as otherwise expressly provided in this
453 act, and except for this section which shall take effect upon
454 becoming law, this act shall take effect January 1, 2014.
455
456 ================= T I T L E A M E N D M E N T ================
457 And the title is amended as follows:
458 Delete everything before the enacting clause
459 and insert:
460 A bill to be entitled
461 An act relating to economic business incentives;
462 amending s. 212.08, F.S.; revising the sales tax
463 exemption for certain business purchases of industrial
464 machinery and equipment; deleting certain limitations
465 on, and procedural requirements relating to, the
466 exemption; deleting the sales tax exemption for
467 machinery and equipment used for certain federal
468 procurement contracts; conforming cross-references;
469 amending s. 288.1045, F.S.; deleting the limitation on
470 the maximum amount of tax refunds a business may
471 receive under the qualified defense contractor and
472 space flight business tax refund program; amending s.
473 288.106, F.S.; deleting the limitation on the maximum
474 amount of tax refunds a business may receive under the
475 tax refund program for qualified target industry
476 businesses; amending ss. 212.0602, 220.183, 290.0056,
477 290.007, 627.5105, and 1011.94, F.S.; conforming
478 cross-references; providing effective dates.