Florida – New or Expanding Business Exemptions

SALT Report 1266 – The Florida Department of Revenue issued guidance regarding the Florida sales and use tax exemptions available for new or expanding businesses.  Any business requesting the exemption must meet the following requirements:

  • The Application for Temporary Tax Exemption Permit – Form DR-1214 must be submitted
  • Taxpayer must prove and document that the production of their new product has increased by a minimum of 10%
  • The new product represents a distinct and separate economic activity for the business
The exemption is tentative until the expanding business shows, to the satisfaction of the Florida Department of Revenue, that production by a new business has commenced, or that the productive output for an expanding business has increased by a minimum of 10%. The increase in productive output is measured by comparing the businesses output for the 12 months following the installation of machinery or equipment over the output for the 12 months preceding the installation.
Moreover, in determining whether a product represents a distinct and separate economic activity, a classification by the North American Industry Classification System for the new product stating that it is different than the existing group of products is significant and recommended.
It is the responsibility of the business claiming the exemption to prove that the newly added product represents a distinct and separate economic activity from any product, or group of products, already being manufactured, processed, compounded, or produced at the location.
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