By Barbara J. Oswalt, CPA/ABV, CVA, CFF, Tax & Business Valuation Director   For more information please call 321-426-3010 or email boswalt@hoyman.com

On July 1^st, 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 Manufacturing and Spaceport Investment Incentive Program is to help businesses become more competitive and profitable by encouraging them to buy more machinery and equipment. The ultimate hope is that the capital investment will result in increased 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 tax refund both years, so you could receive up to $100,000 in Sales and Use Tax refunds during this two-year program.
• Applications are processed on a “first come, first served” basis. Applications are accepted starting:
  • July 1^st, 2010 for the state fiscal year ending June 30, 2011.
  • January 1^st, 2012 for the state fiscal year ending June 30, 2012.
  • January 1^st, 2013 for the state fiscal year ending June 30, 2013.

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.   Manufacturing and Spaceport Investment Incentives Program: Allocation Application
• 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. The deadline for the certification application is September 1^st of the fiscal year following the allocation. Within 30 days OTTED should approve or deny your application. If the expenditures are approved, OTTED will certify the amount of the refund to FDOR.
• 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.

If you need additional information, please contact me at 321-426-3010 or send me an email at boswalt@hoyman.com. The tax laws are there so we can take advantage of them. If your business may be eligible for the Manufacturing and Spaceport Investment Incentive Program, I hope you take advantage of it.

References: 

• Section 288.1083, Florida Statutes; Chapter 2010-147, Laws of Florida (Section 21, CS/SB 1752, 2^nd Eng.)

• Governor’s Office of Tourism, Trade, and Economic Development.