Florida – Economic Development Bill Provides New Exemptions

SALT Report 1465 – The Florida Senate passed an economic development bill that amends certain sales and use taxes.  The bill also creates new sales and use tax exemptions, new enterprise zones, and a sales tax holiday.

The current exemption provided for electricity used for production, packing, or processing of agricultural products on a farm is expanded to include electricity used directly or indirectly in a packinghouse. The bill defines a packinghouse as any building or structure where fruits, vegetables, or meat from cattle or hogs is packed or otherwise prepared for market or shipment in fresh form for wholesale distribution.

The productive output required to qualify for the exemption for industrial machinery and equipment used by an expanding business is lowered from 10% to 5%.

The exemptions on aircraft repair and maintenance labor charges or equipment used in aircraft repair and maintenance is lowered from 15,000 pounds to 2,000 pounds maximum certified takeoff weight.

An exemption is now provided for the purchase of certain chemicals, machinery, parts, and equipment used and consumed in the manufacture or fabrication of aircraft engines and gas turbine engines, including cores, electrical discharge machining supplies, brass electrodes, ceramic guides, reamers, grinding and deburring wheels, Norton vortex wheels, argon, nitrogen, helium, fluid abrasive cutters, solvents and soaps, boroscopes, penetrants, patterns, dies, and molds consumed in the production of castings.

An exemption is also enacted for the sale or lease of an accessible taxicab which is defined as a chauffeur-driven taxi, limousine, sedan, van, or other passenger vehicle that is hired to:

• Transport eight passengers or less,

• Is equipped with a lift or ramp that is designed to transport physically disabled persons or contains any other device that enables the transportation of, physically disabled persons, including those who use wheelchairs, motorized wheelchairs, or similar mobility aids;

• Complies with the accessibility requirements of the Americans with Disabilities Act of 1990 and meets all federal motor vehicle safety standards and regulations adopted under that act.

If the lift or ramp or any other device is installed through an aftermarket conversion of a stock vehicle, only the value of the conversion is exempt.

Sales Tax Holiday 2012

A sales tax holiday is enacted for 2012. State sales tax and county discretionary sales surtax will not be collected from 12:01 a.m. on August 3, 2012, through 11:59 p.m. on August 5, 2012, sales of the following:

The bill defines clothing as any article intended to be worn on or about the human body, excluding watches, watchbands, jewelry, umbrellas, or handkerchiefs, and all footwear, excluding skis, swim fins, roller blades, and skates.

School supplies are defined as pens, pencils, erasers, crayons, notebooks, notebook filler paper, legal pads, binders, lunch boxes, construction paper, markers, folders, poster board, composition books, poster paper, scissors, cellophane tape, glue or paste, rulers, computer disks, protractors, compasses, and calculators.

Enterprise Zones Authorized

Charlotte and Citrus Counties have been authorized to apply for enterprise zone status. The counties must submit their applications by December 31, 2012 and follow all statutory requirements set forth.  Once designated an Enterprise zone, Charlotte and Citrus county taxpayers will become eligible for corporate income, sales and use, and property tax breaks.

The new legislation is effective January 1, 2013.

For Further Information:

Florida Senate – HB 7087