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The State of Florida issued a Technical Assistance Advisement that found that purchases of machinery and equipment for use in a contract between a city and a contractor to construct exempt electricity generating units are exempt from state sales tax. The exemption applies only to materials and equipment that are permanently installed in the generating units and are integral to the production of electricity. The rental of any construction equipment will remain taxable. The City must present the contractor with an affidavit. To claim the exemption, contractors must present an affidavit to vendors at the time of sale. A sample affidavit is attached to the Technical Assistance Advisement. (Technical Assistance Advisement No. 05A-017, Florida Department of Revenue, March 23, 2005)


A sales tax and local options sales tax holiday is scheduled in Florida for the first twelve days of the 2005 hurricane season. Beginning June 1, 2005 and running through June 12, 2005 supplies related to hurricane-preparedness, such as battery-powered flashlights, tarpaulins, and ground anchor systems, can be purchased exempt from tax. The Florida Department of Revenue has released a tax information publication entitled Holiday Preparedness Sales Tax Holiday, which lists specific items that qualify for the exemption. These items are listed with a corresponding sales price limit. For example, only those tie-down kits selling for $50 or less will qualify for the exemption. Items typically sold as a packaged unit cannot be separated in order to meet the dollar limits of the exemption, nor can the price of items sold “buy one, get one free” be averaged together so that both items qualify. Transactions that involve the leasing of qualified items are not eligible for the exemption. For further information please visit: (TIP 05A01-01, Florida Department of Revenue, issued May 10, 2005)


A Florida Taxpayer who purchased materials for fabrication into various functional shapes that are then permanently installed into real property was required to collect tax on the sale of the finished product. The sale constituted a sale of tangible personal property at retail. The taxpayer was also responsible for tax on the cost of materials it fabricates and installs in conjunction with a real property improvement contract. (Technical Assistance Advisement, No. 05A-003, Florida Department of Revenue, January 12, 2005)


In a Technical Assistance Advisement, the Florida Department of Revenue issued guidance to a contractor who was installing both permanent and removable storm shutters on the same contract. The Department of Revenue stated that this type of contract would classify as a mixed contract. According to the Technical Assistance Advisement, the taxability of a mixed contract can be determined three ways. The first means would be if the predominant nature of the contract is real property, then the contractor would pay tax on the purchase of the materials. The second situation would be if the predominant nature of the contract involves tangible personal property, then the contractor would issue a resale certificate to its vendor and collect sales tax from the customer. The third situation would be if the contract clearly allocates the total price among the various parts of the contract. In this case, the contractor would be responsible for collecting tax from the customer on the portion that relates to tangible personal property. (Technical Assistance Advisement, No. 04A-066, Florida Department of Revenue, December 3, 2004)


In a Tax Information Publication, the Florida Department of Revenue stated that the semiannual and annual returns had been sent to their appropriate filers. Also, they stated that a penalty rate of 10% of the tax due or $50, whichever is greater, was implemented and applies to all late-filed sales tax returns even if it is a “zero tax due” return. This penalty was effective as of July 1, 2003. The 2005 annual resale certificates were also distributed with the Publication. (Tax Information Publication, No. 04A01-03, Florida Department of Revenue, December 7, 2004)



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