Florida Expands Exemptions for Aircraft Manufacturing and Repair Equipment

Thursday, April 12th, 2012


On March 28, Florida Governor Rick Scott signed into law "economic development" legislation that affects several tax programs. 2012 Fla. Laws ch. 32. In addition to establishing a "Back to School" sales tax holiday (reported on here), the act, known as House Bill 7087 (HB 7087), expands the sales tax exemption for equipment used in aircraft manufacturing and repair.

HB 7087 expands the sales tax exemptions for labor, parts, and equipment used in repairs of certain aircraft found in Fla. Stat. sec. 212.08(7)(ee), (7)(rr). The act also adds a new provision exempting chemicals, machinery, parts, and equipment used to manufacture, produce, or modify aircraft and gas turbine engines and parts from sales and use tax.

Also, HB 7087 affects two other sales tax exemptions. The act expands the sales tax exemption for electricity used for processing of agricultural products on the farm to also exempt electricity used by packinghouses. See Fla. Stat. sec. 212.08(5)(e). To help clarify this change, the act includes a definition of "packinghouse." And, HB 7087 creates a sales tax exemption for accessible taxicabs, as well as defines the term "accessible taxicab." The effective date for these sales tax amendments is January 1, 2013.

Ultimately, the sales tax changes are but a portion of the tax law changes contained in HB 7087. Among other revisions, the act increases the amount of income that is exempt from the corporate income tax and increases the amount of income that is exempt from the franchise tax imposed on banks and savings associations. See the Governor's announcement here.

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