4747682, 12A-1.043 - Florida Administrative Rules, Law, Code, Register

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Notice: 4747682

Notice of Development of Rulemaking

Department:

DEPARTMENT OF REVENUE

Division:

Sales and Use Tax

Chapter:

SALES AND USE TAX

Overview

RULE:

12A-1.043

Manufacturing

PURPOSE:

The purpose of the proposed amendments to Rule 12A-1.043, F.A.C. (Manufacturing), is to: (1) reflect the court’s ruling in Department of Revenue v. Lockheed Martin Corporation (905 So 2d 1017, 2005 WL 1544773, 07/05/2005), which provides that materials incorporated or fabricated into research or development end products or prototypes are exempt from sales tax; (2) remove provisions stating that the purchase, rental, or repair of real property or tangible personal property employed in research or development is subject to tax rendered obsolete by Section 1, Chapter 2006-57, L.O.F.; and (3) include the exemption provided in Section 212.08(18), F.S., for machinery and equipment used predominantly for research and development as created by Section 2, Chapter 2006-57, L.O.F.
The proposed amendments to subsection (6) of Rule 12A-1.043, F.A.C., when adopted, will: (1) provide that items of tangible personal property manufactured, produced, compounded, processed, or fabricated for use directly and solely in research or development are exempt; (2) remove obsolete provisions stating that tax is due on the purchase, rental, or repair of real property or tangible personal property employed in research or development; (3) provide that machinery and equipment used predominantly for research or development purposes is exempt; (4) define the terms “machinery and equipment” and “predominantly”; (5) provide how materials may be used directly and solely for research or development purposes, as provided in Section 212.052, F.S., and how machinery and equipment used predominantly in research or development activities, as provided in Section 212.08(18), F.S., may be purchased tax-exempt when the purchaser issues an exemption certificate to the selling dealer certifying the tax-exempt use of the item or issues a copy of the purchaser’s direct pay permit to the selling dealer; (6) provide a suggested exemption certificate to be used for purposes of these exemptions; and (7) clarify that a prototype or product of research or development used by the developer, including being offered for sale, is subject to tax.

SUBJECT:

The subject area of the workshop is: (1) the removal of provisions regarding the tax on tangible personal property incorporated into prototypes or products of research or development to reflect the court’s ruling in Department of Revenue v. Lockheed Martin Corporation; and (2) the proposed provisions regarding the exemption in Section 212.052, F.S., for materials and labor used in research or development and the exemption provided in Section 212.08(18), F.S., for machinery and equipment used predominantly for research and development.

RULEMAKING AUTHORITY:

212.052(5), 212.08(18)(c), 212.17(6), 212.18(2), 213.06(1) FS.

LAW:

212.02(4), (7), 212.052, 212.06(1), 212.08(18), 212.085 212.12(12), 366.051 FS.

PRINT PUBLISH DATE:

10/19/2007 Vol. 33/42

RELATED STATUTES
AND LAWS:

212.052(5), 212.08(18)(c), 212.17(6), 212.18(2), 213.06(1) FS., 212.02(4), (7), 212.052, 212.06(1), 212.08(18), 212.085 212.12(12), 366.051 FS.

OVERSIGHT COMMITTEE:

Joint Administrative Procedures Committee
Florida Administrative Law Central Online Network (F.A.L.C.O.N.)

RELATED COURT CASES:

Division of Administrative Hearings

FEDERAL eRULEMAKING
WEB PORTAL:

Regulations.gov

HOW TO LINK TO
THIS NOTICE:

http://flrules.org/gateway/ruleno.asp?id=12A-1.043&PDate=10/19/2007&Section=1

REFERENCE MATERIALS:

No reference(s).

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