Title: Tax Exemptions for Building Materials

Summary: Providing that a copy of any valid permit issued by the county or municipal building department for rehabilitation of real property in an enterprise zone satisfies the requirement that a valid permit be included as part of an application for a refund of the sales and use tax on building materials; clarifying that the exemption for building materials used in an enterprise zone applies to the use tax and not just the sales tax; revising the definition of the term "building materials" to expand the scope of the sales or use tax exemption to include building materials that become a component part of housing project or mixed-use project developments, etc.

Full Text:
An act relating to tax exemptions for building materials; amending s. 212.08, F.S.; providing that a copy of any valid permit issued by the county or municipal building department for rehabilitation of real property in an enterprise zone satisfies the requirement that a valid permit be included as part of an application for a refund of the sales and use tax on building materials; clarifying that the exemption for building materials used in an enterprise zone applies to the use tax and not just the sales tax; revising the definition of the term  building materials  to expand the scope of the sales or use tax exemption to include building materials that become a component part of housing project or mixed-use project developments; revising the definition of the term  housing project  to include the conversion of other buildings for purposes of redevelopment; revising the definition of the term  mixed-use project  to include the conversion of other buildings for purposes of redevelopment and expand the required square footage set aside by the developer to include certain housing construction in a designated brownfield area; clarifying that the exemption for building materials in redevelopment projects applies to the use tax and not just the sales tax; specifying that copies of other documents reflecting payment of the sales or use tax, not just invoices evidencing payment of the tax, satisfy certain requirements relating to the filing of an application for refund of sales or use tax paid on building materials in redevelopment projects; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Paragraphs (g) and (o) of subsection (5) of section 212.08, Florida Statutes, are amended to read: 212.08 Sales, rental, use, consumption, distribution, and storage tax; specified exemptions. The sale at retail, the rental, the use, the consumption, the distribution, and the storage to be used or consumed in this state of the following are hereby specifically exempt from the tax imposed by this chapter. (5) EXEMPTIONS; ACCOUNT OF USE.  (g)  Building materials used in the rehabilitation of real property located in an enterprise zone.   1. Building materials used in the rehabilitation of real property located in an enterprise zone are exempt from the tax imposed by this chapter upon an affirmative showing to the satisfaction of the department that the items have been used for the rehabilitation of real property located in an enterprise zone. Except as provided in subparagraph 2., this exemption inures to the owner, lessee, or lessor at the time the real property is rehabilitated, but only through a refund of previously paid taxes. To receive a refund pursuant to this paragraph, the owner, lessee, or lessor of the rehabilitated real property must file an application under oath with the governing body or enterprise zone development agency having jurisdiction over the enterprise zone where the business is located, as applicable. A single application for a refund may be submitted for multiple, contiguous parcels that were part of a single parcel that was divided as part of the rehabilitation of the property. All other requirements of this paragraph apply to each parcel on an individual basis. The application must include: a. The name and address of the person claiming the refund. b. An address and assessment roll parcel number of the rehabilitated real property for which a refund of previously paid taxes is being sought. c. A description of the improvements made to accomplish the rehabilitation of the real property. d. A copy of a valid building permit issued by the county or municipal building department for the rehabilitation of the real property. e. A sworn statement, under penalty of perjury, from the general contractor licensed in this state with whom the applicant contracted to make the improvements necessary to rehabilitate the real property, which lists the building materials used to rehabilitate the real property, the actual cost of the building materials, and the amount of sales or use tax paid in this state on the building materials. If a general contractor was not used, the applicant, not a general contractor, shall make the sworn statement required by this sub subparagraph. Copies of the invoices that evidence the purchase of the building materials used in the rehabilitation and the payment of sales or use tax on the building materials must be attached to the sworn statement provided by the general contractor or by the applicant. Unless the actual cost of building materials used in the rehabilitation of real property and the payment of sales or use taxes is documented by a general contractor or by the applicant in this manner, the cost of the building materials is deemed to be an amount equal to percent of the increase in assessed value for ad valorem tax purposes. f. The identifying number assigned pursuant to s. 290.0065 to the enterprise zone in which the rehabilitated real property is located. g. A certification by the local building code inspector that the improvements necessary to rehabilitate the real property are substantially completed. h. A statement of whether the business is a small business as defined by s. 288.703. i. If applicable, the name and address of each permanent employee of the business, including, for each employee who is a resident of an enterprise zone, the identifying number assigned pursuant to s. 290.0065 to the enterprise zone in which the employee resides. 2. This exemption inures to a municipality, county, other governmental unit or agency, or nonprofit community-based organization through a refund of previously paid taxes if the building materials used in the rehabilitation are paid for from the funds of a community development block grant, State Housing Initiatives Partnership Program, or similar grant or loan program. To receive a refund, a municipality, county, other governmental unit or agency, or nonprofit community-based organization must file an application that includes the same information required in subparagraph 1. In addition, the application must include a sworn statement signed by the chief executive officer of the municipality, county, other governmental unit or agency, or nonprofit community-based organization seeking a refund which states that the building materials for which a refund is sought were funded by a community development block grant, State Housing Initiatives Partnership Program, or similar grant or loan program. 3. Within working days after receipt of an application, the governing body or enterprise zone development agency shall review the application to determine if it contains all the information required by subparagraph 1. or subparagraph 2. and meets the criteria set out in this paragraph. The governing body or agency shall certify all applications that contain the required information and are eligible to receive a refund. If applicable, the governing body or agency shall also certify if percent of the employees of the business are residents of an enterprise zone, excluding temporary and part-time employees. The certification must be in writing, and a copy of the certification shall be transmitted to the executive director of the department. The applicant is responsible for forwarding a certified application to the department within the time specified in subparagraph 4. 4. An application for a refund must be submitted to the department within months after the rehabilitation of the property is deemed to be substantially completed by the local building code inspector or by November after the rehabilitated property is first subject to assessment. 5. Only one exemption through a refund of previously paid taxes for the rehabilitation of real property is permitted for any single parcel of property unless there is a change in ownership, a new lessor, or a new lessee of the real property. A refund may not be granted unless the amount to be refunded exceeds $500. A refund may not exceed the lesser of percent of the Florida sales or use tax paid on the cost of the building materials used in the rehabilitation of the real property as determined pursuant to sub-subparagraph 1.e. or $5,000, or, if at least percent of the employees of the business are residents of an enterprise zone, excluding temporary and part time employees, the amount of refund may not exceed the lesser of percent of the sales or use tax paid on the cost of the building materials or $10,000. A refund shall be made within days after formal approval by the department of the application for the refund. 6. The department shall adopt rules governing the manner and form of refund applications and may establish guidelines as to the requisites for an affirmative showing of qualification for exemption under this paragraph. 7. The department shall deduct an amount equal to percent of each refund granted under this paragraph from the amount transferred into the Local Government Half-cent Sales Tax Clearing Trust Fund pursuant to s. 212.20 for the county area in which the rehabilitated real property is located and shall transfer that amount to the General Revenue Fund. 8. For the purposes of the exemption provided in this paragraph, the term: a. Building materials  means tangible personal property that becomes a component part of improvements to real property. b. Real property  has the same meaning as provided in s. 192.001(12), except that the term does not include a condominium parcel or condominium property as defined in s. 718.103. c. Rehabilitation of real property  means the reconstruction, renovation, restoration, rehabilitation, construction, or expansion of improvements to real property. d. Substantially completed  has the same meaning as provided in s. 192.042(1). 9. This paragraph expires on the date specified in s. 290.016 for the expiration of the Florida Enterprise Zone Act. (o)  Building materials in redevelopment projects.   1. As used in this paragraph, the term: a. Building materials  means tangible personal property that becomes a component part of a housing project or a mixed use project developments.b. Housing project  means the conversion of an existing manufacturing,or industrial,or other building to housing units in an urban high-crime area, enterprise zone, empowerment zone, Front Porch Community, designated brownfield area, or urban infill area and in which the developer agrees to set aside at least percent of the housing units in the project for low income and moderate-income persons or the construction in a designated brownfield area of affordable housing for persons described in s. 420.0004(9), (11), (12), or (17) or in s. 159.603(7). c. Mixed-use project  means the conversion of an existing manufacturing,or industrial,or other building to mixed-use units that include artists  studios, art and entertainment services, or other compatible uses. A mixed-use project must be located in an urban high-crime area, enterprise zone, empowerment zone, Front Porch Community, designated brownfield area, or urban infill area, and the developer must agree to set aside at least percent of the square footage of the project for low-income and moderate-income housing or the construction in a designated brownfield area of a mixed-use project housing for persons or occupants of units described in s. 420.0004 (8), (10), (11), or (15) or s. 159.603 (7).d. Substantially completed  has the same meaning as provided in s. 192.042(1). 2. Building materials used in the construction of a housing project or mixed-use project are exempt from the tax imposed by this chapter upon an affirmative showing to the satisfaction of the department that the requirements of this paragraph have been met. This exemption inures to the owner through a refund of previously paid taxes. To receive this refund, the owner must file an application under oath with the department which includes: a. The name and address of the owner. b. The address and assessment roll parcel number of the project for which a refund is sought. c. A copy of the building permit issued for the project. d. A certification by the local building code inspector that the project is substantially completed. e. A sworn statement, under penalty of perjury, from the general contractor licensed in this state with whom the owner contracted to construct the project, which statement lists the building materials used in the construction of the project and the actual cost thereof, and the amount of sales or use tax paid on these materials. If a general contractor was not used, the owner shall provide this information in a sworn statement, under penalty of perjury. Copies of invoices evidencing or other documents reflecting payment of sales or use tax must be attached to the sworn statement. 3. An application for a refund under this paragraph must be submitted to the department within months after the date the project is deemed to be substantially completed by the local building code inspector. Within working days after receipt of the application, the department shall determine if it meets the requirements of this paragraph. A refund approved pursuant to this paragraph shall be made within days after formal approval of the application by the department. 4. The department shall establish by rule an application form and criteria for establishing eligibility for exemption under this paragraph. 5. The exemption shall apply to purchases of materials on or after July 1, 2000. Section 2. This act shall take effect July 1, 2012.