Tax Alert

Florida Relaxes Rules for Manufacturing Sales Tax Exemptions

(June 1, 2010)

Machinery and equipment purchased for use by manufacturers or in spaceport activities are exempt from sales tax if the purchase increases productive output by 10 percent. Historically, the Florida Department of Revenue has measured the 10 percent increase in productive output across an entire manufacturing facility.

Florida Governor Charlie Crist signed legislation on May 28, 2010, which relaxes qualification requirements for the sales and use tax exemption. The new law permits productive output to be measured on a specific product line, not on the increase in productive output for an entire facility.

The legislation also allows taxpayers to select any 12 months within the first two years the property is in service to satisfy the increase in productive output test. Previously, any measurement period other than the first 12 months required advance consent from the Florida Department of Revenue.

A press release about the governor signing the bill can be found here.

For more information on how this might affect you, please contact Gary Peric at 813.209.2403 or, Dan Megathlin at 404.442.1613 or, Ken Rios at 954.202.8553 or, or any Crowe Horwath LLP tax professional.

Under U.S. Treasury rules issued in 2005, we must inform you that any advice in this communication to you was not intended or written to be used, and cannot be used, to avoid any government penalties that may be imposed on a taxpayer.

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