Florida Finds Machinery Used to Construct Electric Generating Unit is Exempt.

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)

Posted on July 27, 2005