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Sales and Use Tax Incentives

Florida offers tax credits, refunds, and other incentives to promote business development and job creation.

Note: Florida's Enterprise Zone Program expired on December 31, 2015. See Tax Information Publication #15ADM-04 PDF Icon issued September 8, 2015.

Incentives Related to Jobs

Rural Job Tax Credit

The Rural Job Tax Credit Program provides an incentive for eligible businesses, located within designated rural counties, to create new jobs.

  • The tax credit can range from $1,000 to $1,500 per qualified employee.
  • A business may receive up to $500,000 in tax credits during any one calendar year for its efforts in creating jobs.
  • The credit may be carried forward for five years.
  • File a Rural Job Tax Credit Program Application for Eligibility (Form RU-J) with the Florida Department of Economic Opportunity.
  • Approved credits are taken on the Sales and Use Tax Return (Form DR-15 PDF Icon).

References: Sections 220.1895 and 212.098, Florida Statutes (F.S.), and Tax Information Publication #01A01-06 PDF Icon

Urban High-Crime Area Job Tax Credit

The Urban Job Credit Program provides an incentive for eligible businesses, located within designated urban areas, to create new jobs.

  • The credit ranges from $500 to $2,000 per qualified employee.
  • The credit may be carried forward for five years.
  • File an Urban Job Tax Credit Program Application for Eligibility (Form UR-J) with the Florida Department of Economic Opportunity.
  • Approved credits are taken on the Sales and Use Tax Return (Form DR-15 PDF Icon).

References: Sections 220.1895 and 212.097, F.S.

Incentives Related to Investment in Florida

Exemption for Film in Florida

Companies that produce motion pictures (for theaters or television), television series, commercial advertising, music videos, or sound recordings may qualify for a sales tax exemption on the purchase of certain equipment used in the productions.

Reference: Section 288.1258, Florida Statutes (F.S.), and Rule 12A-1.085, Florida Administrative Code (F.A.C.)

Exemption for Research or Development Costs

This exemption is available to a company or an individual.

  • Exemption applies only to the cost price of tangible personal property incorporated or fabricated into the end product.
  • Excludes ordinary testing, quality control inspections, market research, surveys, and research in nontechnical areas such as literary, historical, or social sciences.
  • Results of research and development must be commercially exploitable, but the sale of a resulting product is not required.
  • Exemption is available by issuing the seller an exemption certificate or a Sales and Use Tax Direct Pay Permit.

References: Section 212.052, F.S., and Rule 12A-1.043, F.A.C.

Tax Credits for Contributions to Nonprofit Scholarship-Funding Organizations

The Florida Tax Credit Scholarship Program allows direct pay permit holders to make private, voluntary contributions to nonprofit scholarship funding organizations and receive a dollar-for-dollar credit against specific Florida taxes, including use tax.

References: Sections 212.1831 and 1002.395, F.S., and Rule Chapter 12-29, F.A.C.

Tax Refund for Community Contribution

A business that donates cash, property, or goods to an approved community-based organization or government agency may apply for a refund of sales tax.

  • The refund is equal to 50% of the value of the donation, with a limit of $200,000 per year.
  • Complete and file the Florida Department of Economic Opportunity (DEO), Application for a Community Contribution Tax Credit (Form 8E-17TCA#01 PDF Icon).
  • Complete and file a Sales and Use Tax - Application for Refund (Form DR-26S PDF Icon) and attach a copy of the DEO approval letter and other required documentation, or you can file Form DR-26S online.

Reference: Section 212.08(5)(p), F.S.

Incentives Related to Machinery and Equipment

Exemption for Industrial Machinery and Equipment

This exemption is available to any business whose primary business activity at the location where the industrial machinery and equipment is used to manufacture, process, compound, or produce items of tangible personal property for sale is specified in North American Industry Classification System (NAICS) Codes (2007) 31, 32, or 33 (Manufacturing).

  • Exempts parts and accessories only when purchased for the machinery and equipment before the date the machinery and equipment is placed into service.
  • Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(kkk), Florida Statutes (F.S.), and Tax Information Publication
#16A01-07 PDF Icon

Exemption for Industrial Machinery and Equipment Used by Metal Recyclers

This exemption for industrial machinery and equipment used as an integral part in the recycling of metals for sale is available to recycling industries classified under North American Industry Classification System (NAICS) Code (2007) 423930.

  • Exempts parts and accessories only when purchased for the machinery and equipment before the date the machinery and equipment is placed into service.
  • Exemption is available by issuing the seller an exemption certificate

References: Section 212.08(7)(kkk), F.S., and Tax Information Publication #16A01-07 PDF Icon

Exemption for Industrial Machinery and Equipment Used by a New or Expanding Business to Increase Productive Output

This exemption is available for machinery for a new business ordered before the start of productive operations and received within 12 months of the date the business begins its productive operations.

  • “Industrial machinery and equipment” means tangible personal property or other property that has a depreciable life of 3 years or more and is used as an integral part in the manufacturing, processing, compounding, or production of tangible personal property for sale or is exclusively used in spaceport activities. Florida Law also specifies the machinery and equipment that does not qualify for this exemption.
  • Expanding businesses must show a minimum 5% increase in productive output.
  • Exemption is available by completing an Application for Temporary Tax Exemption Permit
    (Form DR-1214 PDF Icon).

References: Section 212.08(5)(b), F.S., and Rule 12A-1.096, Florida Administrative Code (F.A.C.)

Exemption for Machinery and Equipment and Other Materials Used for Pollution Control

This exemption is available for purchases of machinery and equipment used primarily to control or abate pollutants resulting from manufacturing, processing, compounding, or producing for sale items of tangible personal property at a fixed location. Qualifying purchases must be used, installed, or constructed to meet a law enforced by, or a condition of a permit issued by, the Florida Department of Environmental Protection.

  • Manufacturing facilities - Exemption applies to:
    • Facilities
    • Devices
    • Fixtures
    • Equipment
    • Machinery
    • Specialty chemicals (as defined by statute)
    • Bioaugmentation products (as defined by statute)
  • Privately owned or operated landfills - Exemption applies to equipment, machinery, and materials.
  • Construction and demolition debris disposal facilities - Exemption applies to equipment, machinery, and materials.
  • Exemption is available by issuing the seller an exemption certificate.

References: Section 212.051, F.S., and Tax Information Publications: #98A01-27 PDF Icon, #98A01-28 PDF Icon, and #00A01-17 PDF Icon

Exemption for Machinery and Equipment Used to Produce Electricity or Steam

This exemption is available to facilities that burn boiler fuels, other than residual oil.

  • The electrical or steam energy must be primarily used for manufacturing, processing, compounding, or producing for sale, items of tangible personal property in Florida.
  • If a facility burns both residual and nonresidual fuels, the exemption is prorated.
  • If 15% or less of all electrical or steam energy produced is from using residual oil, the full exemption applies.

Reference: Section 212.08(5)(c), F.S., and Tax Information Publication #00A01-20 PDF Icon

Exemption for Machinery and Equipment Used for Research and Development

This exemption is available for purchases of machinery and equipment used predominantly (at least 50%) for research and development as defined by law.

  • “Machinery and equipment” includes, but is not limited to, molds, dies, machine tooling, other appurtenances or accessories to machinery and equipment, testing and measuring equipment, test beds, computers, and software, whether purchased or self-fabricated, and, if self-fabricated, includes materials and labor for design, fabrication, and assembly.
  • “Research and development” does not include ordinary testing or inspection of materials or products used for quality control, market research, efficiency surveys, consumer surveys, advertising and promotions, management studies, or research in connection with literary, historical, social science, psychological, or other similar nontechnical activities.
  • Exemption is available by issuing the seller an affidavit or a Sales and Use Tax Direct Pay Permit.

References: Section 212.08(18), F.S., and Rule 12A-1.043, F.A.C.

Exemption for Machinery and Equipment Used in Semiconductor, Defense, or Space Technology Production

This exemption applies to machinery and equipment purchased by a certified semiconductor facility (including expansion of clean rooms in semiconductor-manufacturing facilities), or by a certified defense or space technology facility for use in the manufacture of their respective products for sale as defined by statute.

  • Certification is obtained under an application process conducted jointly by the Florida Department of Economic Opportunity and Enterprise Florida, Inc.
  • A business certified to receive this exemption may elect to designate one or more state universities or community colleges as recipients of up to 100% of the amount of the exemption.
  • Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(5)(j), F.S., and Tax Information Publication #06A01-12 PDF Icon

Exemption for Postharvest Machinery and Equipment

This exemption is available to any business whose primary business activity is classified under code 115114 of the North American Industry Classification System (NAICS) (2007).

  • Exempts postharvest machinery and equipment used at a fixed location in Florida to perform postharvest activities, which are services performed on crops, after their harvest, with the intent of preparing them for market or further processing.

  • Exempts any parts and materials that are incorporated into the repair of such machinery and equipment, and exempts all labor charges for the repair.
  • Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(kkk), F.S., and Tax Information Publication #16A01-07 PDF Icon

Exemption for Certain Repair and Labor Charges

This exemption is available to any business classified under specified Standard Industry Code (SIC) Major Groups for mining, construction, and manufacturing.

  • Exempts labor charges for the repair of, and parts and materials used in the repair of and incorporated into, industrial machinery and equipment which is used for the manufacture, processing, compounding, production, or preparation for shipping of items of tangible personal property at a fixed location within Florida.
  • Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(xx), F.S., and Tax Information Publication #00A01-15 PDF Icon

Incentives Related to Energy

Exemption for Boiler Fuels Used for Certain Industrial Manufacturing Processes

Boiler fuels purchased for use as a combustible fuel (purchases of natural gas, residual oil, recycled oil, waste oil, solid waste material, coal, sulfur, wood, wood residue or wood bark) in the manufacturing, processing, compounding, or production of tangible personal property for sale in Florida are exempt from sales tax.

  • The exemption does not apply to boiler fuels used by a firm regulated by the Florida Department of Business and Professional Regulation, Division of Hotels and Restaurants.
  • Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(b), Florida Statutes (F.S.), and Rule 12A-1.059, Florida Administrative Code (F.A.C.)

Exemption for Electricity Used for Agricultural Purposes

Electricity used for agricultural purposes is exempt from sales tax when:

  • Used directly or indirectly for the production and processing of agricultural farm products on a farm;
  • Used for the packing of agricultural products on a farm; or
  • Used in a packinghouse (including packinghouses not located on a farm) for the production, packing, or processing of agricultural products.

The exemption does not apply to electricity used in buildings or structures where agricultural products are sold at retail.

The exemption is available by issuing the utility provider an exemption certificate.

References: Sections 212.02(28), 212.02(32), 212.08(5)(e), and 212.085, F.S., Rule 12A-1.087, F.A.C., and Tax Information Publication #12A01-07 PDF Icon

Exemption for Natural Gas Used to Generate Electricity in a Non-Combustion Fuel Cell Used in Stationary Equipment

Natural gas used to generate electricity in a non-combustion fuel cell in stationary equipment is exempt from sales and use tax.

  • Exemption is available by issuing the utility provider an exemption certificate.

References: Section 212.08(4)(a), F.S., and Tax Information Publication #13A01-08 PDF Icon

Exemption for Solar Energy Systems

This exemption is available to individuals and companies.

  • Eligible systems must convert sunlight into energy for use as a power source for another system.
  • Applies to equipment and any component currently certified by Florida Solar Energy Center as a qualifying solar energy component: solar collectors, pumps and controls, photovoltaic power conditioning equipment, energy storage units, and accessories integral to a qualifying system.
  • Exemption is not available when the cost of the solar equipment cannot be separated from the total cost of the product (i.e., patio lights, calculators, novelty items).
  • Exemption is available by certifying to the seller that the items purchased or leased qualify for the exemption.

References: Section 212.08(7)(hh), F.S., and Tax Information Publication #05A01-05 PDF Icon