Changes Form To Specified Sales Tax Exemptions On Purchases Of Machinery And Equipment printable pdf download

Changes Form To Specified Sales Tax Exemptions On Purchases Of Machinery And Equipment

TIP # 06A01-06

DATE ISSUED: June 23, 2006

Changes to Specified Sales Tax Exemptions on

Purchases of Machinery and Equipment

The closing of the 2006 Florida Legislative Session resulted in a change in the law on several tax exemptions relati

to purchases or leases of machinery and equipment. The tax exemptions that were affected are discussed below.

Machinery and Equipment Purchased by Expanding Manufacturers

Effective July 1, 2006, expanding manufacturing businesses are no longer required to meet a $50,000 tax threshold

Purchase transactions completed, or lease payments required to be made, prior to July 1, 2006, remain subject to th

$50,000 tax threshold.

To qualify for the exemption, expanding manufacturing businesses:

Must be registered for sales and use tax purposes with the Department of Revenue;

Must file Form DR-1214, an Application for Temporary Tax Exemption Permit, with the Department of

Revenue;

Must purchase or lease qualifying machinery and equipment to manufacture, process, compound, or produce

tangible personal property for sale at a fixed location; and

Must show an increase in productive output of not less than 10 percent to qualify for the exemption. The

increase is generally measured by comparing the number of physical units produced for 12 continuous month

immediately following the completion of installation of qualifying machinery and equipment to the number o

physical units produced over the 12 continuous months immediately preceding such installation.

In response to a properly filed Form DR-1214, the Department will issue a temporary tax exemption permit to

qualified expanding businesses or provide instructions on how to apply for a refund of previously paid taxes on

qualifying machinery and equipment.

Machinery and Equipment Purchased for Use in Mining Operations

Effective July 1, 2006, sales and use tax exemption for purchases or leases of machinery and equipment by a new o

expanding manufacturing business is equally available to mining operations. Accordingly, mining operations are no

longer required to obtain the exemption by way of a credit against severance taxes, nor are they required to show a

increase in the creation of new jobs.

To qualify for tax exemption, an eligible mining business:

Must be registered for sales and use tax purposes with the Department of Revenue;

Must file Form DR-1214, an Application for Temporary Tax Exemption Permit, with the Department of

Changes Form To Specified Sales Tax Exemptions On Purchases Of Machinery And Equipment