
TAA 24A-008 Exemption Manufacturing
QUESTION: Whether Taxpayer’s purchases or rentals of items/materials used in the ___________________________ at its _________ project are eligible and qualify for the exemption from Florida sales and use tax provided under s. 212.08(5)(j), F.S.
ANSWER: Taxpayer’s purchases or rentals of items/materials used in the ___________________________ project would be eligible and qualify for the exemption from Florida sales and use tax provided under s. 212.08(5)(j), F.S.
June 27, 2024
Technical Assistance Advisement – 24A-008
Sales and Use Tax – Exemption Manufacturing
__________________ (“Taxpayer”)
BP No._________
Section 212.08(5)(j), Florida Statutes (F.S.)
Dear __________________:
This letter is a response to your petition dated ___________, for the Florida Department of Revenue’s (the “Department’s”) issuance of a Technical Assistance Advisement ("TAA") with regard to whether voluntary donations received are subject to Florida sales and use tax. Your petition has been carefully examined and the Department finds it to be in compliance with the requisite criteria set forth in Chapter 12-11, Florida Administrative Code. This response to your request constitutes a TAA and is issued to you under the authority of section 213.22, F.S.
Requested Advisements
Taxpayer is inquiring whether the exemption provided under s. 212.08(5)(j), F.S., would apply to the entire __________________, including the material required to construct the __________________ that are necessary for the __________________ to be used as designed. Specifically, Taxpayer is seeking clarification concerning the following items:
- ____________________________________– These are concrete structures designed to support the full weight of a __________________. They physically support the ___________, and integrate conduits and other fixtures used to supply the ________________ with major electrical feeds, a comprehensive fire control system, storm water and hazardous fluids containment and retention, information technologies infrastructure, security systems, and the mounting hardware for trestles and scaffolding to support access to all areas of the ______________ ____________________________________
- Fire Pump House – The Fire Pump House will be constructed solely to enclose the fire pump system from the weather and salt corrosion. It is used to feed the fire control system. The pump house has no other purpose and would be rendered archaic and be removed upon the pump systems being decommissioned.
- Motor Control Center and Control Room Structures – Integral to the waterside portion of the __________________ elevating platform are the motor control center which houses the numerous winches necessary to lift a large __________________, and the control room, where the operators monitor the weight distribution of the __________________ while it is being lifted and transferred to an __________________ These structures would become archaic and be removed if the was decommissioned.
- Storm water collection and retention system external to the __________– Hazardous fluids are contained within the __________________ and processed in compliance with federal and state statutes. Storm water from the __________________ and __________________ however, exits from the maintenance area and is controlled through various structures on the site external to the ____________. These are designed specifically to address the outflows from the tool.
- Utility Feeds – To operate the _________, utilities will be run from various portions of the _________ to the _________. These include water, electricity, the fire main, the fire pumps, security systems, and information technologies infrastructure.
- Piles – Concrete and steel piles are installed throughout the _________ to stabilize the winches and lifting platform to prevent the __________________ from becoming unstable on the platform during lift.
- Consumable Materials – The installation of the _________ requires the use of numerous consumable materials such as nails, screws, forms lumber, form oil, cure compounds etcetera, necessary to complete the installation.
- Rented Equipment – The installation of the _________ requires the rental of barges, cranes, and other installation equipment.
Facts as Provided
Taxpayer has presented the following information regarding its _________, project.
_______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
The new facility replaces the old dry dock and a number of antiquated structures with the __________________________________________________________________________________________.
The primary customer for the __________________. The new facility will __________________. ________________________________________________________________________will be performed at the facility.
The _________ will be built and owned by the _________, and _________. To ensure technical integrity, ___________________________. The _________ will be based on the cost of fabrication and installation of the _________ and associated necessary support infrastructure. __________________ costs will be a component of _________. Therefore, the ultimate beneficiary of any sales tax exemptions/abatement is the _________ in the form of lower contracting costs for work at the facility. ___________________________ contracts are also generally competed between shipyards, so “ __________________” is a primary factor in the number of __________________.
The waterside portion of the _______ is composed of a movable platform that is translated up and down from the seafloor to land-level to lift a ship out of the water for ______________ work. A series of large winches on each side of the platform lift the platform up and down. Operators control the movement of the platform from an integrated motor control center and control room structure at land level. The movable platform ____________________________________.
Trestles with keel/bilge blocks that match the hull shape of the __________________ to be serviced are first placed on the platform at land level, and then lowered to the seabed. The __________________ is then maneuvered into the dock above the movable platform. The platform is then raised slowly to cradle the ____________ as it rises out of the water. Once at land-level, __________________ drive under the __________________ and trestles and lift both off the ground to transport the __________________ to one of __________________ located on the landside portion of the tool. Once the _________ is in place in the landside __________________, the __________________ lower the to the ground, and the __________________.
The __________________ function as a tooling fixture for the __________________, and are a critical integral component of the __________________ that have been designed specifically to allow __________________ to perform out-of water __________________ required by the __________________. The lifting platform is neither designed nor intended to be used to support the _____________ while __________________. The foundations of the __________________ are formed by heavy concrete to support the weight of the __________________. Integral to the __________________ and their foundations are: a) major electrical conduits to feed __________________; b) a fire control system; c) storm water and hazardous fluids containment and retention; d) information technologies infrastructure; e) security systems; and f) the mounting hardware for trestles and scaffolding to support access to all areas of the ____________________________________.
Taxpayer received certification from the Florida Department of Economic Opportunity (DEO)1 that its business operations in __________________, were eligible for the exemption from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S. ________________________________________________________________________ __________________ ______________________________________________________ ______________________________________________________
Applicable Law and Discussion
Section 212.08(5)(j), F.S., Machinery and equipment used in semiconductor, defense, or space technology production, provide in part, as follows:
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1.b. Industrial machinery and equipment used in defense or space technology facilities certified under subparagraph 5. to design, manufacture, assemble, process, compound, or produce defense technology products or space technology products for sale or for use by these facilities are exempt from the tax imposed by this chapter.
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7. As used in this paragraph, the term:
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c. “Defense technology products” means products that have a military application, including, but not limited to, weapons, weapons systems, guidance systems, surveillance systems, communications or information systems, munitions, aircraft, vessels, or boats, or components thereof, which are intended for military use and manufactured in performance of a contract with the United States Department of Defense or the military branch of a recognized foreign government or a subcontract thereunder which relates to matters of national defense.
The exemption from Florida sales and use tax provided under s. 212.08(5)(j), F.S., applies to industrial machinery and equipment used at certified defense technology facilities to design, manufacture, assemble, process, compound, or produce defense technology products for sale or for use by these facilities.
It has been determined that Taxpayer is eligible and qualifies for the Florida sales and use tax exemption provided under s. 212.08(5)(j), F.S., for purchases of industrial machinery and equipment used in defense technology production. Industrial machinery and equipment that Taxpayer uses in its certified defense facility that is integral to design, manufacture, assemble, process, compound, or produce defense technology products or for use by these facilities are exempt from Florida sales and use tax. To obtain the exemption from tax, Taxpayer would provide its Tax Exemption Permit for Machinery and Equipment Used by Certified Semiconductor, Defense or Space Technology Facility to the selling dealer.
It should be noted that any dealer that takes an exemption document or an exemption permit in good faith would be relieved of the liability to collect tax and the Department would look solely to the purchaser for any tax that may be subsequently determined to be due. A selling dealer accepting the permit in good faith, will not be held liable for any potential tax due; liability will rest with the purchaser/holder of the permit. Taxpayer should document in its books and records that purchases were used at and by the __________________ project rather than elsewhere.
Requested Advisements & Determinations
1. ____________________________________– These are concrete structures designed to support the full weight of a __________________. They physically support the ______________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________________
Based on the description provided, ____________________________________ would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
2. Fire Pump House – The Fire Pump House will be constructed solely to enclose the fire pump system from the weather and salt corrosion. It is used to feed the fire control system. The pump house has no other purpose and would be rendered archaic and be removed upon the pump systems being decommissioned.
Based on the description provided, Fire Pump House would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
3. Motor Control Center and Control Room Structures – Integral to the waterside portion of the __________________ are the motor control center which houses the numerous winches necessary to lift a __________________, and the control room, where the operators monitor the weight distribution of the __________________ while it is being lifted and transferred to an __________________. These structures would become archaic and be removed if the __________________ was decommissioned.
Based on the description provided, Motor Control Center and Control Room Structures would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
4. Storm water collection and retention system external to the __________________– Hazardous fluids are contained within the __________________ and processed in compliance with federal and state statutes. Storm water from the __________________ however, exits from the maintenance area and is controlled through various structures on the site external to the __________________. These are designed specifically to address the outflows from the tool.
Based on the description provided, Storm water collection and retention system external to the would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
5. Utility Feeds – To operate the __________________, utilities will be run from various portions of the __________________. These include water, electricity, the fire main, the fire pumps, security systems, and information technologies infrastructure.
Based on the description provided, Utility Feeds would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
6. Piles – Concrete and steel piles are installed throughout the __________________ to stabilize the winches and lifting platform to prevent the __________________ from becoming unstable on the platform during lift.
Based on the description provided, Piles would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
7. Consumable Materials – The installation of the __________________ requires the use of numerous consumable materials such as nails, screws, forms lumber, form oil, cure compounds etcetera, necessary to complete the instillation.
Based on the description provided, Consumable Materials would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
8. Rented Equipment – The installation of the __________________ requires the rental of barges, cranes, and other installation equipment.
Based on the description provided, Rented Equipment would be exempt from Florida sales and use tax under the provisions of s. 212.08(5)(j), F.S., as industrial machinery and equipment used in a defense technology facility to design, manufacture, assemble, process, compound, or produce defense technology products or for use by the facility.
This response constitutes a TAA under s. 213.22, F.S., which is binding on the Department only under the facts and circumstances described in the request for this advice, as specified in s. 213.22, F.S. Our response is predicated on those facts and the specific situation summarized above. You are advised that subsequent statutory or administrative rule changes, or judicial interpretations of the statutes or rules, upon which this advice is based, may subject similar future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s. 213.22, F.S. Confidential information must be deleted before public disclosure. In an effort to protect confidentiality, we request you provide the undersigned with an edited copy of your request for TAA, the backup material and this response, deleting names, addresses and any other details which might lead to identification of the Taxpayer. Your response should be received by the Department within ten (10) days of the date of this letter.
Alan R. Fulton
Revenue Program Administrator I
Technical Assistance & Dispute Resolution
(1) Currently the Florida Department of Commerce.
(2) _______________________________________________________________