Florida Makes Changes to Sales and Use Tax Requirement for Industrial Machinery and Equipment
(May 24, 2013)
Florida Gov. Rick Scott recently signed legislation that temporarily suspends the requirement that industrial machinery and equipment satisfy the new and expanding industry test in order to be exempt from sales tax.
Prior to and after the temporary suspension, industrial machinery and equipment is only exempt under a new and expanding business exemption. The new and expanding business exemption is available if industrial machinery and equipment is placed into service in a new manufacturing facility or increases an existing facility’s productive output by at least 5 percent.
Industrial machinery and equipment purchased between April 30, 2014, and April 30, 2017, will not need to satisfy the requirements of the new and expanding exemption to be exempt from sales tax.
Industrial machinery and equipment is property that:
- Is used at a fixed location.
- Is used by a purchaser whose “primary business activity” at the location where the industrial machinery and equipment is located is within North American Industry Classification System (NAICS) codes 31, 32 and 33. A primary business activity is an activity representing more than 50 percent of the activity conducted at the location where the machinery is located.
- Has a depreciable life of three years or more and is integral to the manufacture of tangible personal property for sale.
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