Sales and Use Tax Exemption for Purchases of Industrial Machinery and Equipment

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The purchase of industrial machinery and equipment may benefit from a sales and use tax exemption. To qualify, the machinery and equipment must be used at a fixed location in Florida by an eligible manufacturer that will “manufacture, process, compound, or produce items of tangible personal property for sale.”

Also included in this exemption are parts and accessories if purchased before the date the machinery and equipment are put into service.

Eligibility is determined by the North American Industry Classification System (NAICS) codes assigned to the manufacturer, specifically those for which the primary business activity is classified under the 31, 32, and 33 series (published by the Office of Management and Budget, Executive Office of the President).

Some examples of manufacturing segments eligible for this exemption include food, apparel, wood, paper, printing, chemical, pharmaceutical, plastic, rubber, metal, transportation, and furniture.

The seller of the machinery or equipment should obtain a signed certificate from the purchaser that certifies the buyer’s entitlement to this exemption. The signed certificate relieves the seller of potential liability on non-qualifying purchases.

This tax exemption is currently scheduled for repeal effective April 30, 2017.

For questions on whether a business or purchases are eligible for this sales and use tax exemption or to ensure the sale of equipment qualifies, contact Faith Gorman, State and Local Tax Director, at [email protected].

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