Facts on Florida’s Newest Incentive Program

On July 1, 2010, a new Manufacturing and Spaceport Investment Incentive Program became available to eligible Florida manufacturers. The program is offered July 1, 2010 – June 30, 2012 through the Office of Tourism, Trade, and Economic Development of Florida (OTTED). The purpose of the program is to help businesses become more competitive and profitable by encouraging them to buy more machinery and equipment. This will result in business and job creation in Florida’s manufacturing and spaceport activities.

This is a sales tax refund authorized by the Florida Legislature for eligible companies purchasing eligible equipment placed into service in Florida in excess of the company’s base year purchases.

The Program Highlights:

  • This is a two-year program for state fiscal years ending June 30, 2011 ($19 million allocation) and June 30, 2012 ($24 million allocation). Although funding has not been allocated for a third state fiscal year, the Florida Legislature has authorized OTTED to accept applications for fiscal year 2012-2013.
  • Each applicant may be granted a tax refund of up to $50,000 during a state fiscal year. What is even better, if you qualify, you can apply for a tax refund both years, up to $100,000 in Sales and Use Tax refunds.
  • Applications are processed on a “first come, first served” basis.

To be eligible for the Sales and Use Tax Refund your business must meet the following criteria.

Business requirements criteria:

  • Manufacture, process, compound, or produce items for sale that are considered tangible personal property; OR
  • Engage in Spaceport activity; OR
  • Engage in phosphate or other solid minerals severance, mining, or processing operations.

Equipment purchased requirements:

  • The equipment must be tangible personal property or other property with a depreciable life of 3 years or more that is used in manufacturing, processing, compounding, or the production of property that is sold exclusively for spaceport activities;
  • Located and placed into service in the State of Florida;
  • Purchase must be made during the state fiscal years ending June 30, 2011 or June 30, 2012.

To receive the refund, you will need to:

  • Apply with the Office of Tourism, Trade, and Economic Development (OTTED) for a tax refund allocation. OTTED should approve or deny your application within 30 days.
  • Once you purchase eligible equipment and pay applicable sales and use taxes, apply to OTTED for certification of these expenditures to Florida Department of Revenue (FDOR). The expenditures should include the amount of sales and use taxes paid and the amount of the company’s tax refund allocation it has used.
  • Within 30 days from approval from OTTED, submit an Application for Refund (Form DR-26S) to the Department of Revenue. The application for the refund should be in the amount certified by OTTED. Keep in mind, FDOR is authorized to ask for supporting documentation and you will be responsible for providing it.
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    Barbara Oswalt is Hoyman Dobson’s Tax and Business Valuation Director and the leader of Hoyman Dobson’s Manufacturing & Distribution niche. She can be contacted at (321) 426-3010 or boswalt@hoyman.com