Bill Text: FL S1108 | 2012 | Regular Session | Comm Sub
Bill Title: Taxation
Spectrum: Slight Partisan Bill (? 3-1)
Status: (Failed) 2012-03-09 - Died in Budget, companion bill(s) passed, see HB 7087 (Ch. [S1108 Detail]
Download: Florida-2012-S1108-Comm_Sub.html
Florida Senate - 2012 CS for CS for CS for SB 1108
By the Committees on Budget Subcommittee on Finance and Tax;
Community Affairs; and Commerce and Tourism; and Senator Altman
593-03835-12 20121108c3
1 A bill to be entitled
2 An act relating to taxation; amending s. 196.199,
3 F.S.; providing an exemption from intangible tax for
4 lessees performing a governmental, municipal, or
5 public purpose or function; providing for retroactive
6 application; clarifying that certain provisions of the
7 act are remedial and do not create a right to a
8 refund; amending s. 212.08, F.S.; exempting certain
9 items used to manufacture, produce, or modify aircraft
10 engines and gas turbine engines and parts from the tax
11 on sales, use, and other transactions; revising
12 provisions relating to an exemption for machinery and
13 equipment used to increase productive output; amending
14 s. 220.14, F.S.; increasing the amount of income that
15 is exempt from taxation; providing applicability;
16 amending s. 220.63, F.S.; increasing the amount of
17 income that is exempt from the franchise tax imposed
18 on banks and savings associations; providing
19 applicability; authorizing the executive director of
20 the Department of Revenue to adopt emergency rules;
21 providing effective dates.
22
23 Be It Enacted by the Legislature of the State of Florida:
24
25 Section 1. Paragraph (a) of subsection (2) of section
26 196.199, Florida Statutes, is amended to read:
27 196.199 Government property exemption.—
28 (2) Property owned by the following governmental units but
29 used by nongovernmental lessees shall only be exempt from
30 taxation under the following conditions:
31 (a) Leasehold interests in property of the United States,
32 of the state or any of its several political subdivisions, or of
33 municipalities, agencies, authorities, and other public bodies
34 corporate of the state shall be exempt from ad valorem taxation
35 and the intangible tax referenced in paragraph (b) only when the
36 lessee serves or performs a governmental, municipal, or public
37 purpose or function, as defined in s. 196.012(6). In all such
38 cases, all other interests in the leased property shall also be
39 exempt from ad valorem taxation. However, a leasehold interest
40 in property of the state may not be exempted from ad valorem
41 taxation when a nongovernmental lessee uses such property for
42 the operation of a multipurpose hazardous waste treatment
43 facility.
44 Section 2. The amendment to s. 196.199, Florida Statutes,
45 made by this act shall take effect upon this act becoming a law
46 and shall apply retroactively to all governmental leaseholds in
47 existence as of January 1, 2011. This section is intended to be
48 remedial in nature and does not create a right to a refund or
49 require any governmental entity to refund any tax, penalty, or
50 interest remitted to the Department of Revenue before the
51 effective date of this act.
52 Section 3. Paragraph (hhh) is added to subsection (7) of
53 section 212.08, Florida Statutes, to read:
54 212.08 Sales, rental, use, consumption, distribution, and
55 storage tax; specified exemptions.—The sale at retail, the
56 rental, the use, the consumption, the distribution, and the
57 storage to be used or consumed in this state of the following
58 are hereby specifically exempt from the tax imposed by this
59 chapter.
60 (7) MISCELLANEOUS EXEMPTIONS.—Exemptions provided to any
61 entity by this chapter do not inure to any transaction that is
62 otherwise taxable under this chapter when payment is made by a
63 representative or employee of the entity by any means,
64 including, but not limited to, cash, check, or credit card, even
65 when that representative or employee is subsequently reimbursed
66 by the entity. In addition, exemptions provided to any entity by
67 this subsection do not inure to any transaction that is
68 otherwise taxable under this chapter unless the entity has
69 obtained a sales tax exemption certificate from the department
70 or the entity obtains or provides other documentation as
71 required by the department. Eligible purchases or leases made
72 with such a certificate must be in strict compliance with this
73 subsection and departmental rules, and any person who makes an
74 exempt purchase with a certificate that is not in strict
75 compliance with this subsection and the rules is liable for and
76 shall pay the tax. The department may adopt rules to administer
77 this subsection.
78 (hhh) Items used in manufacturing and fabricating aircraft
79 and gas turbine engines.—Chemicals, machinery, parts, and
80 equipment used and consumed in the manufacture or fabrication of
81 aircraft engines and gas turbine engines, including cores,
82 electrical discharge machining (EDM) supplies, brass electrodes,
83 ceramic guides, reamers, grinding and deburring wheels, Norton
84 vortex wheels, argon, nitrogen, helium, fluid abrasive cutters,
85 solvents and soaps, boroscopes, penetrants, patterns, dies, and
86 molds consumed in the production of castings are exempt from the
87 tax imposed by this chapter.
88 Section 4. Effective January 1, 2013, paragraph (b) of
89 subsection (5) of section 212.08, Florida Statutes, is amended
90 to read:
91 212.08 Sales, rental, use, consumption, distribution, and
92 storage tax; specified exemptions.—The sale at retail, the
93 rental, the use, the consumption, the distribution, and the
94 storage to be used or consumed in this state of the following
95 are hereby specifically exempt from the tax imposed by this
96 chapter.
97 (5) EXEMPTIONS; ACCOUNT OF USE.—
98 (b) Machinery and equipment used to increase productive
99 output.—
100 1. Industrial machinery and equipment purchased for
101 exclusive use by a new business in spaceport activities as
102 defined by s. 212.02 or for use in new businesses that
103 manufacture, process, compound, or produce for sale items of
104 tangible personal property at fixed locations are exempt from
105 the tax imposed by this chapter upon an affirmative showing by
106 the taxpayer to the satisfaction of the department that such
107 items are used in a new business in this state. Such purchases
108 must be made before prior to the date the business first begins
109 its productive operations, and delivery of the purchased item
110 must be made within 12 months after that date.
111 2. Industrial machinery and equipment purchased for
112 exclusive use by an expanding facility which is engaged in
113 spaceport activities as defined by s. 212.02 or for use in
114 expanding manufacturing facilities or plant units which
115 manufacture, process, compound, or produce for sale items of
116 tangible personal property at fixed locations in this state are
117 exempt from any amount of tax imposed by this chapter upon an
118 affirmative showing by the taxpayer to the satisfaction of the
119 department that such items are used to increase the productive
120 output of such expanded facility or business by not less than 5
121 10 percent.
122 3.a. To receive an exemption provided by subparagraph 1. or
123 subparagraph 2., a qualifying business entity shall apply to the
124 department for a temporary tax exemption permit. The application
125 shall state that a new business exemption or expanded business
126 exemption is being sought. Upon a tentative affirmative
127 determination by the department pursuant to subparagraph 1. or
128 subparagraph 2., the department shall issue such permit.
129 b. The applicant shall maintain all necessary books and
130 records to support the exemption. Upon completion of purchases
131 of qualified machinery and equipment pursuant to subparagraph 1.
132 or subparagraph 2., the temporary tax permit shall be delivered
133 to the department or returned to the department by certified or
134 registered mail.
135 c. If, in a subsequent audit conducted by the department,
136 it is determined that the machinery and equipment purchased as
137 exempt under subparagraph 1. or subparagraph 2. did not meet the
138 criteria mandated by this paragraph or if commencement of
139 production did not occur, the amount of taxes exempted at the
140 time of purchase shall immediately be due and payable to the
141 department by the business entity, together with the appropriate
142 interest and penalty, computed from the date of purchase, in the
143 manner prescribed by this chapter.
144 d. If a qualifying business entity fails to apply for a
145 temporary exemption permit or if the tentative determination by
146 the department required to obtain a temporary exemption permit
147 is negative, a qualifying business entity shall receive the
148 exemption provided in subparagraph 1. or subparagraph 2. through
149 a refund of previously paid taxes. No refund may be made for
150 such taxes unless the criteria mandated by subparagraph 1. or
151 subparagraph 2. have been met and commencement of production has
152 occurred.
153 4. The department shall adopt rules governing applications
154 for, issuance of, and the form of temporary tax exemption
155 permits; provisions for recapture of taxes; and the manner and
156 form of refund applications, and may establish guidelines as to
157 the requisites for an affirmative showing of increased
158 productive output, commencement of production, and qualification
159 for exemption.
160 5. The exemptions provided in subparagraphs 1. and 2. do
161 not apply to machinery or equipment purchased or used by
162 electric utility companies, communications companies, oil or gas
163 exploration or production operations, publishing firms that do
164 not export at least 50 percent of their finished product out of
165 the state, any firm subject to regulation by the Division of
166 Hotels and Restaurants of the Department of Business and
167 Professional Regulation, or any firm that does not manufacture,
168 process, compound, or produce for sale items of tangible
169 personal property or that does not use such machinery and
170 equipment in spaceport activities as required by this paragraph.
171 The exemptions provided in subparagraphs 1. and 2. shall apply
172 to machinery and equipment purchased for use in phosphate or
173 other solid minerals severance, mining, or processing
174 operations.
175 6. For the purposes of the exemptions provided in
176 subparagraphs 1. and 2., these terms have the following
177 meanings:
178 a. “Industrial machinery and equipment” means tangible
179 personal property or other property that has a depreciable life
180 of 3 years or more and that is used as an integral part in the
181 manufacturing, processing, compounding, or production of
182 tangible personal property for sale or is exclusively used in
183 spaceport activities. A building and its structural components
184 are not industrial machinery and equipment unless the building
185 or structural component is so closely related to the industrial
186 machinery and equipment that it houses or supports that the
187 building or structural component can be expected to be replaced
188 when the machinery and equipment are replaced. Heating and air
189 conditioning systems are not industrial machinery and equipment
190 unless the sole justification for their installation is to meet
191 the requirements of the production process, even though the
192 system may provide incidental comfort to employees or serve, to
193 an insubstantial degree, nonproduction activities. The term
194 includes parts and accessories only to the extent that the
195 exemption thereof is consistent with the provisions of this
196 paragraph.
197 b. “Productive output” means the number of units actually
198 produced by a single plant, operation, or product line in a
199 single continuous 12-month period, irrespective of sales.
200 Increases in productive output shall be measured by the output
201 for 12 continuous months selected by the expanding business
202 after following the completion of the installation of such
203 machinery or equipment over the output for the 12 continuous
204 months immediately preceding such installation. However, in no
205 case may such time period begin later than 2 years after
206 following the completion of the installation of the new
207 machinery and equipment. The units used to measure productive
208 output shall be physically comparable between the two periods,
209 irrespective of sales.
210 Section 5. Effective January 1, 2013, and applying to tax
211 years beginning on or after January 1, 2013, subsection (1) of
212 section 220.14, Florida Statutes, is amended to read:
213 220.14 Exemption.—
214 (1) In computing a taxpayer’s liability for tax under this
215 code, there shall be exempt from the tax $50,000 $25,000 of net
216 income as defined in s. 220.12 or such lesser amount as will,
217 without increasing the taxpayer’s federal income tax liability,
218 provide the state with an amount under this code which is equal
219 to the maximum federal income tax credit which may be available
220 from time to time under federal law.
221 Section 6. Effective January 1, 2013, and applying to tax
222 years beginning on or after January 1, 2013, subsection (3) of
223 section 220.63, Florida Statutes, is amended to read:
224 220.63 Franchise tax imposed on banks and savings
225 associations.—
226 (3) For purposes of this part, the franchise tax base shall
227 be adjusted federal income, as defined in s. 220.13, apportioned
228 to this state, plus nonbusiness income allocated to this state
229 pursuant to s. 220.16, less the deduction allowed in subsection
230 (5) and less $50,000 $25,000.
231 Section 7. (1) The executive director of the Department of
232 Revenue is authorized, and all conditions are deemed met, to
233 adopt emergency rules under ss. 120.536(1) and 120.54(4),
234 Florida Statutes, for the purpose of implementing this act.
235 (2) Notwithstanding any provision of law, such emergency
236 rules shall remain in effect for 6 months after the date adopted
237 and may be renewed during the pendency of procedures to adopt
238 permanent rules addressing the subject of the emergency rules.
239 Section 8. Except as otherwise expressly provided in this
240 act and except for this section, which shall take effect upon
241 this act becoming a law, this act shall take effect July 1,
242 2012.
