Form Dr-418 - Economic Development Ad Valorem Property Tax Exemption Page 2
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1
2General Information
Ad Valorem property tax exemptions can be granted to new and expanding businesses only after the voters of a city and/or county vote in a referendum to allow
that city or county to grant exemptions . Section 196.1995, Florida Statutes, requires that a referendum be held if: (1) The Board of County Commissioners or
governing authority of a municipality (city or county commission) votes to hold such a referendum, or (2) if the county or city commission receives a petition
signed by ten percent of the registered voters of the county or city. This referendum question can then be placed before the voters of a city or county at any
regular election or special election called for voting on the tax incentive referendum or for any other purpose.
If the voters authorize exemptions, a company must first meet the definitions of a new or expanding business as stated in s. 196.012 (15) and (16), F.S.
The expansion must be on the same or a colocated site of the business current operations.
If a business meets one of the above definitions as a new or expanding business, it must then file this application with the county or city commission or both.
After the city or county commission receives this application, it must submit the application to the county property appraiser for review. After the property
appraiser makes the report as to the fiscal impact of granting the exemption, the county or city commission shall then adopt an ordinance in the usual manner-
granting the exemption, if it chooses to do so.
A business cannot receive exemption from school taxes or water management district taxes. Also a business must pay taxes that were voted by the voters of a
city or county to pay for bond issues and other special tax levies authorized by the voters of a city or county.
The exemption can only be for the improvements to the real property and for tangible personal property. The land on which the new or expanding business is to
be located will still be taxed and taxes must be paid on it.
The action taken by a city or county commission can only exempt the taxes paid to that governmental body. A city can only exempt its taxes; a county can only
exempt its taxes. All other taxes must be paid.
personal property at a fixed location and which
2. When citrus fruit is delivered by a
Statutory Definitions
comprises an industrial or manufacturing plant; or
cooperative for a grower-member, by a grower-
2. A business establishing 25 or more jobs to
member to a cooperative, or by a grower-
Section 196.011 Annual application required
employ 25 or more full-time employees in this state,
participant to a Florida processor, the sales factor
for exemption .—
the sales factor of which, as defined by s. 220.15(5),
for the growers for such citrus fruit delivered to
(1)(a) Every person or organization who, on
for the facility with respect to which it requests an
such processor shall be the same as the sales
January 1, has the legal title to real or personal
economic development ad valorem tax exemption is
factor for the most recent taxable year of that
property, except inventory, which is entitled by law
less than 0.50 for each year the exemption is claimed;
processor. That sales factor, expressed only as a
to exemption from taxation as a result of its
provided that such business increases operation on
percentage and not in terms of the dollar volume
ownership and use shall, on or before March 1 of
a site colocated with a commercial or industrial
of sales, so as to protect the confidentiality of the
each year, file an application for exemption with
operation owned by the same business, resulting in
sales of the processor, shall be furnished on the
the county property appraiser, listing and
a net increase in employment of not less than 10
request of such a grower promptly after it has
describing the property for which exemption is
percent or an increase in productive output of not less
been determined for that taxable year.
claimed and certifying its ownership and use. The
than 10 percent.
3. Reimbursement of expenses under an
Department of Revenue shall prescribe the forms
(b) Any business located in an enterprise zone
agency contract between a cooperative, a grower-
upon which the application is made. Failure to
that increases operations on a site colocated with a
make application, when required, on or before
member of a cooperative, or a grower and a
commercial or industrial operation owned by the
processor is not a sale within this state.
March 1 of any year shall constitute a waiver of
same business.
the exemption privilege for that year, except as
(c) Sales of a financial organization, including,
provided in subsection (7) or subsection (8).
but not limited to, banking and savings institutions,
Section 196.1995 Economic development ad
investment companies, real estate investment
valorem tax exemption.-
Section 196.012(15) and (16), Florida Statutes
(6) With respect to a new business as defined
trust, and brokerage companies, occur in this
(15) “New business” means:
by s. 196.012(15)(c), the municipality annexing the
state if derived from:
(a)1. A business establishing 10 or more jobs
1. Fees, commissions, or other compensation
property on which the business is situated may
to employ 10 or more full-time employees in this
grant an economic development ad valorem tax
for financial services rendered within this state;
state, which manufactures, processes, compounds,
exemption under this section to that business for a
2. Gross profits from trading in stocks, bonds, or
fabricates, or produces for sale items of tangible
period that will expire upon the expiration of the
other securities managed within this state;
personal property at a fixed location and which
3. Interest received within this state, other
exemption granted by the county. If the county renews
comprises an industrial or manufacturing plant;
than interest from loans secured by mortgages,
the exemption under subsection (7), the municipality
may also extend its exemption. A municipal
deeds of trust, or other liens upon real or tangible
2. A business establishing 25 or more jobs to
personal property located in this state, and
employ 25 or more full-time employees in this
economic development ad valorem tax exemption
granted under this subsection may not extend
dividends received within this state;
state, the sales factor of which, as defined by
4. Interest charged to customers at places of
s.220.15(5), for the facility with respect to which it
beyond the duration of the county exemption.
business maintained within this state for carrying
requests an economic development ad valorem
Section 220.15(5), Florida Statutes.
debit balances of margin accounts, without deduction
tax exemption is less than 0.50 for each year the
(5) The sales factor is a fraction the numerator
of any costs incurred in carrying such accounts;
exemption is claimed; or
of which is the total sales of the taxpayer in this state
5. Interest, fees, commissions, or other charges
3. An office space in this state owned and
during the taxable year or period and the denom-
or gains from loans secured by mortgages, deeds of
used by a corporation newly domiciled in this state;
inator of which is the total sales of the taxpayer
trust or other liens upon real or tangible personal
provided such office space houses 50 or more
everywhere during the taxable year or period.
property located in this state or from installment sale
full-time employees of such corporation; provided
(a) As used in this subsection, the term “sales”
agreements originally executed by a taxpayer or the
that such business or office first begins operation on
means all gross receipts of the taxpayer except
taxpayer’s agent to sell real or tangible personal
a site clearly separate from any other commercial or
interest, dividends, rents, royalties, and gross
property located in this state;
industrial operation owned by the same business.
6. Rents from real or tangible personal
receipts from the sale, exchange, maturity, redemp-
(b) Any business located in an enterprise
tion, or other disposition of securities. However:
property located in this state; or
zone that first begins operation on a site clearly
1. Rental income is included in the term if a
7. Any other gross income, including other
separate from any other commercial or industrial
interest, resulting from the operation as a financial
significant portion of the taxpayer’s business consists of
operation owned by the same business.
leasing or renting real or tangible personal property; and
organization within this state.
(c) A new business that is situated on property
2. Royalty income is included in the term if a
In computing the amounts under this
annexed into a municipality and that, at the time of
significant portion of the taxpayer’s business consists of
paragraph, any amount received by a member of
annexation, is receiving an economic
dealing in or with the production, exploration, or
an affiliated group (determined under s. 1504(a) of
development ad valorem tax exemption from the
development of minerals.
the Internal Revenue code, but without reference
county under s. 196.1995.
(b)1. Sales of tangible personal property occur
to whether any such corporation is an “includable
(16) “Expansion of an existing business” means:
corporation” under s. 1504(b) of the Internal
in this state if the property is delivered or shipped to
a purchaser within this state, regardless of the f.o.b.
Revenue code) from another member of such
(a)1. A business establishing 10 or more jobs
group shall be included only to the extent such
to employ 10 or more full-time employees in this
point, other conditions of the sale, or ultimate
destination of the property, unless shipment is made
amount exceeds expenses of the recipient directly
state, which manufactures, processes, compounds,
related thereto.
fabricates, or produces for sale items of tangible
via a common or contract carrier.
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