Florida Repeals Sales Tax For Equipment Purchases

On April 30th, the law that eliminates the manufacturing and equipment sales tax on Florida’s manufacturing companies took effect. According to Enterprise Florida the elimination of the tax is expected to save the more than 18,000 manufacturing companies in the state approximately $141 million annually. The legislation fully eliminates an outdated five percent “productive output” requirement for businesses to receive a sales tax exemption on equipment. Until January 1, 2013, manufacturers were required to show proof of meeting a 10 percent productive output requirement. Governor Scott reduced this 10 percent requirement to 5 percent in the 2012 legislative session. Under the new exemption, no sales and use tax will be charged for purchases of industrial machinery and equipment used in Florida by businesses that “make, process or produce for sale items of tangible personal property.” The exemption also includes parts and accessories for industrial machinery and equipment if they are purchased prior to the machinery being placed into service.