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Unlocking Growth: Florida’s Manufacturing Machinery and Equipment Sales Tax Exemption

February 7, 2024

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Florida's manufacturing sector enjoys a strategic advantage with a specialized sales tax exemption tailored to drive productivity and growth. Enacted to stimulate industrial expansion and enhance competitiveness, this exemption incentivizes new and expanding businesses to invest in machinery and equipment essential for production. 

Eligibility Criteria: 

  • New Business: Machinery and equipment purchases for exclusive use in new manufacturing ventures qualify for exemption, provided they are integral to productive operations. 

  • Expanding Facilities: Existing facilities engaged in manufacturing can benefit from the exemption if investments in machinery and equipment contribute to a minimum 5% increase in productive output. 

Application Process: 

  • Businesses must apply for a temporary tax exemption permit from the Department of Revenue, specifying whether it's a new business or an expansion. 

  • Upon tentative approval, the permit is issued, subject to maintaining necessary records and fulfilling purchase conditions. 

  • Failure to meet criteria results in tax recapture. 

Scope and Limitations: 

  • The exemption encompasses tangible personal property with a depreciable life of at least 3 years, used in manufacturing or spaceport activities. 

  • Not applicable to utilities, communications, or non-manufacturing entities, it aims to boost tangible production and spaceport-related endeavors. 

  • Phosphate or solid minerals mining and processing operations are also eligible. 

Measuring Productive Output: 

  • Productive output is quantified by the actual units produced within a continuous 12-month period, post-installation of machinery. 

  • Comparing output before and after installation determines the increase, with a minimum 5% rise mandated for exemption qualification. 

Benefits for Florida's Economy: 

  • Encourages new business entry and expansion, fostering job creation and economic diversification. 

  • Strengthens Florida's manufacturing ecosystem, driving innovation and productivity enhancements. 

  • Aligns with the state's economic development goals, promoting strategic industries and technological advancements. 

Take Action: For more information on how to leverage Florida's Manufacturing Machinery and Equipment Sales Tax Exemption for your business growth, complete the form below.