Bill Text: FL S0518 | 2013 | Regular Session | Comm Sub
Bill Title: Economic Business Incentives
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2013-05-03 - Died on Calendar, companion bill(s) passed, see HB 4013 (Ch. 2013-96), CS/CS/HB 7007 (Ch. 2013-39), CS/SB 406 (Ch. 2013-42) [S0518 Detail]
Download: Florida-2013-S0518-Comm_Sub.html
Florida Senate - 2013 CS for SB 518 By the Committee on Commerce and Tourism; and Senator Hukill 577-03302-13 2013518c1 1 A bill to be entitled 2 An act relating to economic business incentives; 3 amending s. 212.08, F.S.; revising the sales tax 4 exemption for certain business purchases of industrial 5 machinery and equipment; deleting certain limitations 6 on, and procedural requirements relating to, the 7 exemption; deleting the sales tax exemption for 8 machinery and equipment used for certain federal 9 procurement contracts; conforming cross-references; 10 amending s. 288.1045, F.S.; deleting the limitation on 11 the maximum amount of tax refunds a business may 12 receive under the qualified defense contractor and 13 space flight business tax refund program; amending s. 14 288.106, F.S.; deleting the limitation on the maximum 15 amount of tax refunds a business may receive under the 16 tax refund program for qualified target industry 17 businesses; amending ss. 212.0602, 220.183, 290.0056, 18 290.007, 627.5105, and 1011.94, F.S.; conforming 19 cross-references; providing effective dates. 20 21 Be It Enacted by the Legislature of the State of Florida: 22 23 Section 1. Paragraphs (e) through (q) of subsection (5) of 24 section 212.08, Florida Statutes, are redesignated as paragraphs 25 (d) through (p), respectively, and paragraphs (b), (d), and (h) 26 of that subsection and paragraph (f) of subsection (15) of that 27 section are amended, to read: 28 212.08 Sales, rental, use, consumption, distribution, and 29 storage tax; specified exemptions.—The sale at retail, the 30 rental, the use, the consumption, the distribution, and the 31 storage to be used or consumed in this state of the following 32 are hereby specifically exempt from the tax imposed by this 33 chapter. 34 (5) EXEMPTIONS; ACCOUNT OF USE.— 35 (b) Machinery and equipment used by manufacturersto36increase productive output.— 37 1. Industrial machinery and equipment purchased for 38exclusiveuse in this state bya new businessinspaceport39activities as defined by s.212.02or for use in newbusinesses 40 that manufacture, process, compound, or produce for sale items 41 of tangible personal property at fixed locations are exempt from 42 the tax imposed by this chapter if, at the time of purchase, the 43 purchaser furnishes the seller with a signed certificate stating 44 that the items to be exempted are for exclusive use as provided 45 in this paragraph. The certificate relieves the seller of the 46 responsibility of collecting the tax on the sale of such items 47 and the department shall look solely to the purchaser for 48 recovery of the tax if it determines that the purchaser was not 49 entitled to the exemptionupon an affirmative showing by the50taxpayer to the satisfaction of the department that such items51are used in a new business in this state.Such purchases must be52made before the date the business first begins its productive53operations, and delivery of the purchased item must be made54within 12 months after that date.552. Industrial machinery and equipment purchased for56exclusive use by an expanding facility which is engaged in57spaceport activities as defined by s.212.02or for use in58expanding manufacturing facilities or plant units which59manufacture, process, compound, or produce for sale items of60tangible personal property at fixed locations in this state are61exempt from any amount of tax imposed by this chapter upon an62affirmative showing by the taxpayer to the satisfaction of the63department that such items are used to increase the productive64output of such expanded facility or business by not less than 565percent.663.a. To receive an exemption provided by subparagraph 1. or67subparagraph 2., a qualifying business entity shall apply to the68department for a temporary tax exemption permit. The application69shall state that a new business exemption or expanded business70exemption is being sought. Upon a tentative affirmative71determination by the department pursuant to subparagraph 1. or72subparagraph 2., the department shall issue such permit.73b. The applicant shall maintain all necessary books and74records to support the exemption. Upon completion of purchases75of qualified machinery and equipment pursuant to subparagraph 1.76or subparagraph 2., the temporary tax permit shall be delivered77to the department or returned to the department by certified or78registered mail.79c. If, in a subsequent audit conducted by the department,80it is determined that the machinery and equipment purchased as81exempt under subparagraph 1. or subparagraph 2. did not meet the82criteria mandated by this paragraph or if commencement of83production did not occur, the amount of taxes exempted at the84time of purchase shall immediately be due and payable to the85department by the business entity, together with the appropriate86interest and penalty, computed from the date of purchase, in the87manner prescribed by this chapter.88d. If a qualifying business entity fails to apply for a89temporary exemption permit or if the tentative determination by90the department required to obtain a temporary exemption permit91is negative, a qualifying business entity shall receive the92exemption provided in subparagraph 1. or subparagraph 2. through93a refund of previously paid taxes. No refund may be made for94such taxes unless the criteria mandated by subparagraph 1. or95subparagraph 2. have been met and commencement of production has96occurred.974. The department shall adopt rules governing applications98for, issuance of, and the form of temporary tax exemption99permits; provisions for recapture of taxes; and the manner and100form of refund applications, and may establish guidelines as to101the requisites for an affirmative showing of increased102productive output, commencement of production, and qualification103for exemption.104 2.5.The exemption doesexemptions provided in105subparagraphs 1. and 2. donot apply to machinery or equipment 106 purchased or used by electric utility companies, communications 107 companies, oil or gas exploration or production operations, 108 publishing firms that do not export at least 50 percent of their 109 finished product out of the state, any firm subject to 110 regulation by the Division of Hotels and Restaurants of the 111 Department of Business and Professional Regulation, or any firm 112 that does not manufacture, process, compound, or produce for 113 sale items of tangible personal propertyor that does not use114such machinery and equipment in spaceport activities as required115by this paragraph. The exemption appliesexemptions provided in116subparagraphs 1. and 2. shallapplyto machinery and equipment 117 purchased for use in phosphate or other solid minerals 118 severance, mining, or processing operations. 119 3.6.For the purposes of the exemption, the termexemptions120provided in subparagraphs 1. and 2., these terms have the121following meanings:122a.“Industrial machinery and equipment” means tangible 123 personal property or other property that has a depreciable life 124 of 3 years or more andthatis used as an integral part in the 125 manufacturing, processing, compounding, or production of 126 tangible personal property for saleor is exclusively used in127spaceport activities. A building and its structural components 128 are not industrial machinery and equipment unless the building 129 or structural component is so closely related to the industrial 130 machinery and equipment that it houses or supports that the 131 building or structural component can be expected to be replaced 132 when the machinery and equipment are replaced. Heating and air 133 conditioning systems are not industrial machinery and equipment 134 unless the sole justification for their installation is to meet 135 the requirements of the production process, even though the 136 system may provide incidental comfort to employees or serve, to 137 an insubstantial degree, nonproduction activities. The term 138 includes parts and accessories for industrial machinery and 139 equipmentonly to the extent that the exemption thereof is140consistent with the provisions of this paragraph. 141b. “Productive output” means the number of units actually142produced by a single plant, operation, or product line in a143single continuous 12-month period, irrespective of sales.144Increases in productive output shall be measured by the output145for 12 continuous months selected by the expanding business146after completion of the installation of such machinery or147equipment over the output for the 12 continuous months148immediately preceding such installation. However, in no case may149such time period begin later than 2 years after completion of150the installation of the new machinery and equipment. The units151used to measure productive output shall be physically comparable152between the two periods, irrespective of sales.153(d)Machinery and equipment used under federal procurement154contract.—1551. Industrial machinery and equipment purchased by an156expanding business which manufactures tangible personal property157pursuant to federal procurement regulations at fixed locations158in this state are exempt from the tax imposed in this chapter159upon an affirmative showing by the taxpayer to the satisfaction160of the department that such items are used to increase the161implicit productive output of the expanded business by not less162than 10 percent. The percentage of increase is measured as163deflated implicit productive output for the calendar year during164which the installation of the machinery or equipment is165completed or during which commencement of production utilizing166such items is begun divided by the implicit productive output167for the preceding calendar year. In no case may the commencement168of production begin later than 2 years following completion of169installation of the machinery or equipment.1702. The amount of the exemption allowed shall equal the171taxes otherwise imposed by this chapter on qualifying industrial172machinery or equipment reduced by the percentage of gross173receipts from cost-reimbursement type contracts attributable to174the plant or operation to total gross receipts so attributable,175accrued for the year of completion or commencement.1763. The exemption provided by this paragraph shall inure to177the taxpayer only through refund of previously paid taxes. Such178refund shall be made within 30 days of formal approval by the179department of the taxpayer’s application, which application may180be made on an annual basis following installation of the181machinery or equipment.1824. For the purposes of this paragraph, the term:183a. “Cost-reimbursement type contracts” has the same meaning184as in 32 C.F.R. s. 3-405.185b. “Deflated implicit productive output” means the product186of implicit productive output times the quotient of the national187defense implicit price deflator for the preceding calendar year188divided by the deflator for the year of completion or189commencement.190c. “Eligible costs” means the total direct and indirect191costs, as defined in 32 C.F.R. ss. 15-202 and 15-203, excluding192general and administrative costs, selling expenses, and profit,193defined by the uniform cost-accounting standards adopted by the194Cost-Accounting Standards Board created pursuant to 50 U.S.C. s.1952168.196d. “Implicit productive output” means the annual eligible197costs attributable to all contracts or subcontracts subject to198federal procurement regulations of the single plant or operation199at which the machinery or equipment is used.200e. “Industrial machinery and equipment” means tangible201personal property or other property that has a depreciable life202of 3 years or more, that qualifies as an eligible cost under203federal procurement regulations, and that is used as an integral204part of the process of production of tangible personal property.205A building and its structural components are not industrial206machinery and equipment unless the building or structural207component is so closely related to the industrial machinery and208equipment that it houses or supports that the building or209structural component can be expected to be replaced when the210machinery and equipment are replaced. Heating and air211conditioning systems are not industrial machinery and equipment212unless the sole justification for their installation is to meet213the requirements of the production process, even though the214system may provide incidental comfort to employees or serve, to215an insubstantial degree, nonproduction activities. The term216includes parts and accessories only to the extent that the217exemption of such parts and accessories is consistent with the218provisions of this paragraph.219f. “National defense implicit price deflator” means the220national defense implicit price deflator for the gross national221product as determined by the Bureau of Economic Analysis of the222United States Department of Commerce.2235. The exclusions provided in subparagraph (b)5. apply to224this exemption. This exemption applies only to machinery or225equipment purchased pursuant to production contracts with the226United States Department of Defense and Armed Forces, the227National Aeronautics and Space Administration, and other federal228agencies for which the contracts are classified for national229security reasons. In no event shall the provisions of this230paragraph apply to any expanding business the increase in231productive output of which could be measured under the232provisions of sub-subparagraph (b)6.b. as physically comparable233between the two periods.234 (g)(h)Business property used in an enterprise zone.— 235 1. Business property purchased for use by businesses 236 located in an enterprise zone which is subsequently used in an 237 enterprise zone isshall beexempt from the tax imposed by this 238 chapter. This exemption inures to the business only through a 239 refund of previously paid taxes. A refund shall be authorized 240 upon an affirmative showing by the taxpayer, to the satisfaction 241 of the department, that the requirements of this paragraph have 242 been met. 243 2. To receive a refund, the business must fileunder oath244 with the governing body or enterprise zone development agency 245 that hashavingjurisdiction over the enterprise zone where the 246 business is located, as applicable, an application, under oath, 247 which includes: 248 a. The name and address of the business claiming the 249 refund. 250 b. The identifying number assigned pursuant to s. 290.0065 251 to the enterprise zone in which the business is located. 252 c. A specific description of the property for which a 253 refund is sought, including its serial number or other permanent 254 identification number. 255 d. The location of the property. 256 e. The sales invoice or other proof of purchase of the 257 property, showing the amount of sales tax paid, the date of 258 purchase, and the name and address of the sales tax dealer from 259 whom the property was purchased. 260 f. Whether the business is a small business as defined by 261 s. 288.703. 262 g. If applicable, the name and address of each permanent 263 employee of the business, including, for each employee who is a 264 resident of an enterprise zone, the identifying number assigned 265 pursuant to s. 290.0065 to the enterprise zone in which the 266 employee resides. 267 3. Within 10 working days after receipt of an application, 268 the governing body or enterprise zone development agency shall 269 review the application to determine if it contains all the 270 information required pursuant to subparagraph 2. and meets the 271 criteria set out in this paragraph. The governing body or agency 272 shall certify all applications that contain the information 273 required pursuant to subparagraph 2. and meet the criteria set 274 out in this paragraph as eligible to receive a refund. If 275 applicable, the governing body or agency shall also certify if 276 20 percent of the employees of the business are residents of an 277 enterprise zone, excluding temporary and part-time employees. 278 The certification mustshallbe in writing, and a copy of the 279 certification mustshallbe transmitted to the executive 280 director of the Department of Revenue. The business isshall be281 responsible for forwarding a certified application to the 282 department within the time specified in subparagraph 4. 283 4. An application for a refund pursuant to this paragraph 284 must be submitted to the department within 6 months after the 285 tax is due on the business property that is purchased. 286 5. The amount refunded on purchases of business property 287 under this paragraph shall be the lesser of 97 percent of the 288 sales tax paid on such business property or $5,000, or, ifno289less than20 percent or more of the employees of the business 290 are residents of an enterprise zone, excluding temporary and 291 part-time employees, the amountrefunded on purchases of292business property under this paragraphshall be the lesser of 97 293 percent of the sales tax paid on such business property or 294 $10,000. A refund mustapproved pursuant to this paragraph shall295 be made within 30 days after formal approval by the department 296 of the application for the refund. A refund may not be granted 297under this paragraphunless the amount to be refunded exceeds 298 $100 in sales tax paid on purchases made within a 60-day time 299 period. 300 6. The department shall adopt rules governing the manner 301 and form of refund applications and may establish guidelines as 302 to the requisites for an affirmative showing of qualification 303 for exemption under this paragraph. 304 7. If the department determines that the business property 305 is used outside an enterprise zone within 3 years afterfromthe 306 date of purchase, the amount of taxes refunded to the business 307 purchasing such business property isshallimmediatelybedue 308 and payable to the department by the business, together with the 309 appropriate interest and penalty, computed from the date of 310 purchase, in the manner provided by this chapter. 311 Notwithstanding this subparagraph, business property used 312 exclusively in: 313 a. Licensed commercial fishing vessels, 314 b. Fishing guide boats, or 315 c. Ecotourism guide boats 316 317 that leave and return to a fixed location within an area 318 designated under s. 379.2353, Florida Statutes 2010, are 319 eligible for the exemptionprovided under this paragraphif all 320 requirements of this paragraph are met. Such vessels and boats 321 must be owned by a business that is eligible to receive the 322 exemptionprovided under this paragraph. This exemption does not 323 apply to the purchase of a vessel or boat. 324 8. The department shall deduct an amount equal to 10 325 percent of each refund granted under this paragraph from the 326 amount transferred into the Local Government Half-cent Sales Tax 327 Clearing Trust Fund pursuant to s. 212.20 for the county area in 328 which the business property is located and shall transfer that 329 amount to the General Revenue Fund. 330 9. For the purposes of this exemption, the term “business 331 property” means new or used property defined as “recovery 332 property” in s. 168(c) of the Internal Revenue Code of 1954, as 333 amended, except: 334 a. Property classified as 3-year property under s. 335 168(c)(2)(A) of the Internal Revenue Code of 1954, as amended; 336 b. Industrial machinery and equipment as defined in 337 subparagraph (b)3.sub-subparagraph (b)6.a.and eligible for 338 exemption under paragraph (b); 339 c. Building materials as defined in sub-subparagraph 340 (g)8.a.; and 341 d. Business property having a sales price of under $5,000 342 per unit. 343 10. This paragraph expires on the date specified in s. 344 290.016 for the expiration of the Florida Enterprise Zone Act. 345 (15) ELECTRICAL ENERGY USED IN AN ENTERPRISE ZONE.— 346 (f) For the purpose of the exemption provided in this 347 subsection, the term “qualified business” means a business that 348whichis: 349 1. First occupying a new structure to which electrical 350 service, other than that used for construction purposes, has not 351 been previously provided or furnished; 352 2. Newly occupying an existing, remodeled, renovated, or 353 rehabilitated structure to which electrical service, other than 354 that used for remodeling, renovation, or rehabilitation of the 355 structure, has not been provided or furnished in the three 356 preceding billing periods; or 357 3. Occupying a new, remodeled, rebuilt, renovated, or 358 rehabilitated structure for which a refund has been granted 359 pursuant to paragraph (5)(f)(5)(g). 360 Section 2. Effective July 1, 2013, paragraph (c) of 361 subsection (2) of section 288.1045, Florida Statutes, is 362 amended, and present paragraphs (d) through (h) of that 363 subsection are redesignated as paragraphs (c) through (g), 364 respectively, to read: 365 288.1045 Qualified defense contractor and space flight 366 business tax refund program.— 367 (2) GRANTING OF A TAX REFUND; ELIGIBLE AMOUNTS.— 368(c)A qualified applicant may not receive more than $7369million in tax refunds pursuant to this section in all fiscal370years.371 Section 3. Effective July 1, 2013, paragraph (c) of 372 subsection (3) of section 288.106, Florida Statutes, is amended 373 to read: 374 288.106 Tax refund program for qualified target industry 375 businesses.— 376 (3) TAX REFUND; ELIGIBLE AMOUNTS.— 377 (c) A qualified target industry business may not receive 378 refund payments of more than 25 percent of the total tax refunds 379 specified in the tax refund agreement under subparagraph 380 (5)(a)1. in any fiscal year. Further, a qualified target 381 industry business may not receive more than $1.5 million in 382 refunds under this section in any single fiscal year, or more 383 than $2.5 million in any single fiscal year if the project is 384 located in an enterprise zone.A qualified target industry385business may not receive more than $7 million in refund payments386under this section in all fiscal years, or more than $7.5387million if the project is located in an enterprise zone.388 Section 4. Section 212.0602, Florida Statutes, is amended 389 to read: 390 212.0602 Education; limited exemption.—To facilitate 391 investment in education and job training, there is also exempt 392 from the taxes levied under this chapter, subject to the 393 provisions of this section, the purchase or lease of materials, 394 equipment, and other items or the license in or lease of real 395 property by any entity, institution, or organization that is 396 primarily engaged in teaching students to perform any of the 397 activities or services described in s. 212.031(1)(a)9., that 398 conducts classes at a fixed location located in this state, that 399 is licensed under chapter 1005, and that has at least 500 400 enrolled students. Any entity, institution, or organization 401 meeting the requirements of this section shall be deemed to 402 qualify for the exemptions underinss. 212.031(1)(a)9. and 403 212.08(5)(e)212.08(5)(f)and (12), and to qualify for an 404 exemption for its purchase or lease of materials, equipment, and 405 other items used for education or demonstration of the school’s 406 curriculum, including supporting operations.Nothing inThis 407 section does notshallpreclude an entity described in this 408 section from qualifying for any other exemption provided under 409forinthis chapter. 410 Section 5. Paragraph (c) of subsection (1) of section 411 220.183, Florida Statutes, is amended to read: 412 220.183 Community contribution tax credit.— 413 (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX 414 CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM 415 SPENDING.— 416 (c) The total amount of tax credit which may be granted for 417 all programs approved under this section, s. 212.08(5)(o) 418212.08(5)(p), and s. 624.5105 is $10.5 million annually for 419 projects that provide homeownership opportunities for low-income 420 households or very-low-income households as those terms are 421 defined in s. 420.9071(19) and (28)and $3.5 million annually 422 for all other projects. 423 Section 6. Paragraph (a) of subsection (9) of section 424 290.0056, Florida Statutes, is amended to read: 425 290.0056 Enterprise zone development agency.— 426 (9) The following powers and responsibilities shall be 427 performed by the governing body creating the enterprise zone 428 development agency acting as the managing agent of the 429 enterprise zone development agency, or, contingent upon approval 430 by such governing body, such powers and responsibilities shall 431 be performed by the enterprise zone development agency: 432 (a) To review, process, and certify applications for state 433 enterprise zone tax incentives pursuant to ss. 212.08(5)(f), (g) 434212.08(5)(g), (h), and (15); 212.096; 220.181; and 220.182. 435 Section 7. Subsections (4) and (5) of section 290.007, 436 Florida Statutes, are amended to read: 437 290.007 State incentives available in enterprise zones.—The 438 following incentives are provided by the state to encourage the 439 revitalization of enterprise zones: 440 (4) The sales tax exemption for building materials used in 441 the rehabilitation of real property in enterprise zones provided 442 in s. 212.08(5)(f)212.08(5)(g). 443 (5) The sales tax exemption for business equipment used in 444 an enterprise zone provided in s. 212.08(5)(g)212.08(5)(h). 445 Section 8. Paragraph (c) of subsection (1) of section 446 624.5105, Florida Statutes, is amended to read: 447 624.5105 Community contribution tax credit; authorization; 448 limitations; eligibility and application requirements; 449 administration; definitions; expiration.— 450 (1) AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.— 451 (c) The total amount of tax credit which may be granted for 452 all programs approved under this section and ss. 212.08(5)(o) 453212.08(5)(p)and 220.183 is $10.5 million annually for projects 454 that provide homeownership opportunities for low-income 455 households or very-low-income households as those terms are 456 defined in s. 420.9071(19) and (28)and $3.5 million annually 457 for all other projects. 458 Section 9. Subsection (1) of section 1011.94, Florida 459 Statutes, is amended to read: 460 1011.94 University Major Gifts Program.— 461 (1) TheThere is established aUniversity Major Gifts 462 Program is established. The purpose of the program is to enable 463 each university to provide donors with an incentive in the form 464 of matching grants for donations for the establishment of 465 permanent endowments and sales tax exemption matching funds 466 received pursuant to s. 212.08(5)(i)212.08(5)(j), which must be 467 invested, with the proceeds of the investment used to support 468 libraries and instruction and research programs, as defined by 469 the Board of Governors. 470 Section 10. Except as otherwise expressly provided in this 471 act, and except for this section which shall take effect upon 472 becoming law, this act shall take effect January 1, 2014.