Sales And Use Tax
A. Property rented, leased, or licensed to a person providing concessionaire service -- §212.031, F.S.
Current Situation:
Section 212.031(1)(a), imposes a tax at the rate of 6 percent on the total rent or license fee charged for exercising a taxable privilege of engaging in the business of renting, leasing, letting, or granting a license for the use of any real property unless an exemption applies. In addition, section 212.04, imposes a tax at the rate of 6 percent upon every person exercising a taxable privilege of selling or receiving anything of value by way of admissions.
Legislative Change:
House Bill 349, prefiled 11/2/99, amends Section 212.031 by providing a tax exemption on the lease, sublease, license to use, or rental of property to a concessionaire by certain facilities. Publicly-owned theaters, civic centers, performing arts centers, and stadiums are now exempt from the tax. Additionally, the bill provides a tax exemption for property rented, leased, subleased, or licensed to a concessionaire selling event-related products, by a convention hall, auditorium, stadium, exhibition hall, recreational facility, theater, arena, civic center, or performing arts center, when the rental, lease, or license payment is based on a percentage of sales, and not a fixed price. Finally, the bill provides that certain charges to a lessee, or licensee of a facility for other services required, such as ticket takers, event staff, security personnel and other event related personnel, are exempt from the tax on the lease of the property. The exemption is repealed effective July 1, 2003.
House Bill 349 amends section 212.04 by providing that the tax on admissions to certain events is computed on the value of the admissions charge and not on the total sales price. The total charge for the admission sometimes includes other charges such as: state or local seat surcharges; separately stated ticket service charges imposed by a facility ticket office; or a ticketing service fee. The bill also exempts from the admissions tax events sponsored by certain government-owned facilities bearing 100 percent of the risk of success or failure for the event, and in which student or faculty talent is not exclusively used. The exemption is repealed effective July 1, 2003.
In addition, House Bill 349 provides that taxes imposed by sections 212.031 and 212.04 shall be collected at the time of payment for such rental, lease, or license but are not due to the Department of Revenue until the first day of the month following the actual date of the event. The exemption is repealed effective July 1, 2003.
B. Admissions Tax -- §212.04, F.S.
Current Situation:
Section 212.04, F.S., imposes a tax at the rate of 6 percent upon every person exercising a taxable privilege of selling or receiving anything of value by way of admissions.
Legislative Change:
House Bill 349, prefiled 11/2/99, amends section 212.04 by providing that the tax on admissions to certain events is computed on the value of the admissions charge and not on the total sales price. The total charge for the admission sometimes includes other charges such as: state or local seat surcharges; separately stated ticket service charges imposed by a facility ticket office; or a ticketing service fee. The bill also exempts from the admissions tax events sponsored by certain government-owned facilities bearing 100 percent of the risk of success or failure for the event, and in which student or faculty talent is not exclusively used. The exemption is repealed effective July 1, 2003.
In addition, House Bill 349 provides that taxes imposed by section 212.04 are to be collected at the time of payment for such admission but are not due to the Department of Revenue until the first day of the month following the actual date of the event. The exemption is repealed effective July 1, 2003.
Finally, the bill provides that the taxes imposed on the transaction exempted by the bill are not due to the Department of Revenue before the actual date of the related event, and no taxes imposed by Chapter 212, F.S., on the transactions exempted under this act, and not actually paid or collected prior to the effective date, shall be due. These provisions took effect July 1, 2000.
C. Motion Picture Sales Tax Exemption -- §§212.031(1)(a)9, 212.08(5)(f), and 212.08(12).
Current Situation:
The Florida sales tax code contains three exemptions related to the entertainment industry sales activities.
- Section 212.031(1)(a)9, provides an exemption on the lease or rental of real property used as an integral part of the performance of qualified productions services.
- Section 212.08(5)(f), provides a refund on sales taxes paid on motion picture or video equipment and sound recording equipment that is purchased or leased for use in this state in certain specific entertainment production activities. Equipment must meet the definition of “Section 38 Property” as defined in section 48(a)(1)(A) and (B)(I) of the Internal Revenue Code.
- Section 212.08(12), provides a partial exemption on the sale of master tapes, records, films, or video tapes.
Legislative Change:
House Bill 743 (HB 743), prefiled 1/10/00, creates section 288.1258, F.S., to provide a single application process for qualified entertainment industry production companies to follow when applying for a certificate of exemption relating to entertainment industry sales taxes that are covered under sections 212.031, 212.06, and 212.08. The bill also changes the current sale and use tax refund in section 212.08(5)(f), relating to certain motion picture or video equipment and sound recording equipment, to a point of sale exemption. Finally, the bill provides for information sharing between the Department of Revenue and the Office of the Film Commissioner. These provisions take effect January 1, 2001.
D. Lease or rental of or license in real property (Space Flight Business) -- §212.031, F.S.
Current Situation:
Section 212.031(1)(a), imposes a tax at the rate of 6 percent on the total rent or license fee charged for exercising a taxable privilege of engaging in the business of renting, leasing, letting, or granting a license for the use of any real property unless an exemption applies.
Legislative Change:
House Bill 775 (HB 775), prefiled 1/13/00, amends section 212.031 by providing an exemption from the tax on the lease, rental of, or license in real property for property used or occupied predominantly for space flight business purposes. The bill defines “space flight” to mean the manufacturing, processing, or assembly of a space flight facility, space propulsion system, space vehicle, satellite, or station of any kind possessing the capacity for space flight. The definition also includes vehicle launch activities, flight operations, ground control or ground support, and all directly related administrative activities. Property used or occupied predominantly for space flight business purposes means more than 50 percent of the property is used for one or more space flight business purposes. In addition, the bill provides that a signed written statement from the tenant or licensee claiming the exemption relieves the landlord or licensor of the responsibility of collecting the tax otherwise due. These provisions took effect July 1, 2000.
E. Sales Tax on Printed Materials -- §212.06(3), F.S.
Current Situation:
Section 212.06 sets forth the general provisions for the determination and collection of the sales, storage, and use tax. Section 212.06(1)(a) provides that the tax rate is 6 percent of the retail sales prices at the moment of sale, 6 percent cost price at the moment of purchase, or 6 percent of the cost price as of the moment of commingling with the general mass of property in the state, and shall be collectible from all dealers on the sale at retail, the use, the consumption, the distribution, and the storage for use or consumption in Florida of tangible personal property taxable under chapter 212.
Legislative Change:
House Bill 879 (HB 879), prefiled 1/25/00, amends section 212.06 by providing that printers who deliver printed materials by the United States Postal Service to persons other than the purchaser have no obligation or responsibility for the payment or collection of any taxes imposed on the materials. However, the bill specifies that printers are obligated to collect taxes due on the printed materials when all, or substantially all, of the materials will be mailed to persons located within Florida. The purchaser of the printed materials remains responsible for any taxes due on the printed material. These provisions took effect July 1, 2000.
F. Tax Exemption/ Silicon Technology Production -- §212.08(5)(j), F.S.
Current Situation:
Under §212.08(5)(j), F.S., industrial machinery and equipment purchased or leased for use in silicon technology facilities to manufacture, process, compound, or produce silicon technology products for sale or for use by these facilities are exempt from sales and use tax. In order to qualify for this exemption, the facilities must be certified by Enterprise Florida, Inc. and the Office of Tourism, Trade, and Economic Development.
Legislative Change:
Senate Bill 1604 (SB 1604), prefiled 2/23/00, amends section 212.08(5)(j) by replacing the term “silicon” with “semiconductor” for the sales tax exemption for machinery and equipment used in silicon technology production. Semiconductor is the modern term for silicon technology. The term includes building materials for use in manufacturing or expanding “clean rooms” in the exemption.
In addition, the bill expands the exemption to include machinery and equipment used by defense or space technology facilities to produce defense or space technology products, and machinery and equipment used in defense or space research and development in a defense or space technology research and development facility. This exemption is at 25 percent. The bill also provides definitions of “industrial machinery and equipment” for use in silicon, defense, or space technology production, “machinery and equipment” used predominantly in semiconductor wafer, defense, or space research and development activities, and “space technology products.”
The bill amends section 212.08(7)(mm), by extending for three years, the expiration of the sales tax exemption for solar energy systems which is scheduled to repeal on July 1, 2002. In addition, Senate Bill 1604 amends section 125.0104(3)(I), by authorizing counties that have elected to levy the 4th tourist development tax for the purpose of paying debt service on bonds issued to finance the construction, reconstruction or renovation of a convention center pursuant to section 125.0104(3)(I), to use the proceeds from the tax to pay the operation and maintenance costs of the convention center for the life of the bonds.
The bill also creates the “Community-based Development Organization Assistance Act” to provide grants to eligible “community-based development organizations” for administrative and operating expenses related to affordable housing and economic development projects. These provisions take effect January 1, 2001.
G. Tax Exemption for Specified Organizations -- §218.08(7), F.S.
Current Situation:
Section 212.08(7), contains several specific exemptions from the sales and use tax for charitable, religious, scientific, and other organizations that may be exempt from federal income tax under the Internal Revenue Code. However, Florida Law also imposes additional requirements to qualify for sales and use tax exemption, which often create handicaps for these exempt organizations.
Legislative Change:
Senate Bill 388 (SB 388), prefiled 11/4/99, amends section 212.08(7) by providing a sales and use tax exemption for sales and leases to all organizations exempt from federal income tax under section 501(c)(3) of the Internal Revenue Code, when such leases or purchases are used in carrying on such organization’s customary nonprofit activities. The bill also amends the statute by removing specific exemptions for military, museums, homes for the aged, nursing homes, hospices, scientific institutions, state theater contract organizations, Coast Guard auxiliaries, athletic event sponsors, the Gasparilla Distance Classic Association, and nonprofit organizations raising funds for or making grants to an organization holding a consumer’s certificate of exemption. The bill further revises the exemptions for educational institutions, works of art, and citizen support organizations to conform to the amendment. These provisions shall take effect January 1, 2001.
H. Tax on Component Parts or Ingredients of Manufactured Asphalt -- §§212.06 and 212.08, F.S.
Current Situation:
Section 212.06 imposes a 6 percent tax upon the cost of materials that become a component part or ingredient of finished (manufactured) asphalt, and upon the cost of transportation of the components or ingredients. Additionally, an “indexed tax” is imposed on manufactured asphalt. The index tax was originally set at $.38 per ton by statute. Thereafter, it was adjusted on July 1, of each year according to a formula tied to the Producer Price Index from the U.S. Department of Labor, Bureau of Statistics, and was recently pegged at $.48 per ton.
Legislative Change:
House Bill 411 (HB 411), prefiled 11/5/99, amends section 212.06 by increasing from 20 percent to 40 percent, the sales and use tax exemption on manufactured asphalt used in any federal, state, or local public works project. The bill also amends 212.08 by creating a sales tax exemption for railroad roadway materials used in the construction, repair, or maintenance of railways. These provisions take effect January 1, 2001.
I. Sales Tax Exemption for Farm Equipment -- 212.08(3)
Current Situation:
Section 212.08(3) provides a partial sales and use tax exemption on self-propelled, power-drawn, or power-driven farm equipment used exclusively on a farm or in a forest in plowing, planting, cultivating, or harvesting crops or products as produced by agricultural industries, or for fire prevention and suppression work with respect to such crops or products.
Legislative Change:
House Bill 1105 (HB 1105), prefiled 2/11/00, amends section 212.08(3) by reducing the rate of sales and use tax on qualified farm equipment from 3 percent to 2.5 percent. The bill also extends the partial sales and use tax exemption to equipment used in any stage of agricultural production. An equipment purchaser, renter, or lessee will be required to sign a certificate stating that the farm equipment will be used exclusively on a farm or in a forest for agricultural production. Rental and lease of exempt equipment are also added to the transactions qualifying for the exemption. Affiliated groups will be included in the provision that exempts persons from the sales and use tax when such persons secure rock, fill dirt, or similar materials from a location he, she or it owns to be used on property he, she or it owns. These provisions take effect January 1, 2001.
J. Sales Tax Exemption - Nonprofit Water Systems -- §212.08(7), F.S.
Current Situation:
Section 212.08(7) contains several specific exemptions from the sales and use tax for organizations exempt from federal income tax under the Internal Revenue Code.
Legislative Change:
House Bill 1933 (HB 1933), prefiled 3/13/00, amends section 212.08(7) by creating a sales tax exemption for sales and leases to not-for-profit corporations which hold a current exemption from federal income tax under section 501(c)(4) of the Internal Revenue Code if the sole or primary function of the corporation is to construct, maintain, or operate a water system in the state. The bill also creates sales tax exemptions for sales and leases to the following: (1) Organizations providing crime prevention, drunk driving prevention, and juvenile delinquency prevention; (2) The Florida Fire and Emergency Services Foundation; and (3) State Theater contract organizations which receive funding pursuant to the Cultural Institutions Program authorized under section 265.2861, or which received funding from the Department of State as a state theater contract organization prior to October 1, 1999. Finally, the bill clarifies that the sales tax exemption for state theater contract organizations is on sales and leases to such organizations only. These provisions took effect July 1, 2000.
K. Sales Tax Holiday -- Chapter 212, F.S.
Current Situation:
Chapter 212, F.S., provides that a sales and use tax be imposed on the retail sale, storage, or use of tangible personal property. In addition, Chapter 212, lists items and transactions that are exempt from sales and use tax. Under current law, the retail sale of clothing is subject to sales tax.
Legislative Change:
House Bill 161 (HB 161), prefiled 9/15/99, establishes the “Florida Residents Tax Relief Act of 2000,” providing that no sales and use tax shall be collected on sales of clothing, wallets, or bags, including handbags, backpacks, fanny packs, and diaper bags, but excluding briefcases, suitcases, and other garment bags, having a selling price of $100 or less during the period from 12:01 a.m., July 29, 2000, through midnight, August 6, 2000.
Clothing is defined to mean any article of wearing apparel, including all footwear, except for skis, swim fins, roller blades, and skates, intended to be worn on or about the human body and does not include watches, watchbands, jewelry, umbrellas, or handkerchiefs.
The exemption does not apply to sales within a theme park or entertainment complex, within a public lodging establishment, or within an airport. These provisions took effect June 2, 2000.
L. Sales Tax Registration Fee -- §212.18(5), F.S.
Current Situation:
Section 212.18(5) provides that, in addition to any other fee imposed by Chapter 212, persons who hold a certificate of registration and who had taxable sales or purchases during the preceding calendar year of $30,000 or more shall pay an additional annual registration fee for each certificate of registration granted. For certificate holders with taxable sales or purchases during the preceding calendar year of at least $30,000 but not more than $200,000, the fee is $25. For certificate holders with taxable sales or purchases during the preceding calendar year of $200,000 or more the fee is $50.
Legislative Change:
Senate Bill 932 (SB 932), prefiled 1/13/00, repeals section 212.18(5), to abolish the additional annual registration fee charged for each certificate of registration granted to a dealer who had taxable sales or purchases of $30,000 or more during the previous calendar year. These provisions took effect June 5, 2000.