The purpose of the proposed amendments to subsection (5), Resource Recovery Equipment or Machinery, of Rule 12A-1.001, F.A.C. (Specific Exemptions), is to remove requirements that are no longer used by the Department and to include current ...

DEPARTMENT OF REVENUE
Sales and Use Tax

RULE NO: RULE TITLE
12A-1.001: Specific Exemptions
PURPOSE AND EFFECT: The purpose of the proposed amendments to subsection (5), Resource Recovery Equipment or Machinery, of Rule 12A-1.001, F.A.C. (Specific Exemptions), is to remove requirements that are no longer used by the Department and to include current procedures and requirements that are currently used by the Department to administer the exemption for resource recovery machinery or equipment provided in Section 212.08(7)(q), F.S.
When in effect, these proposed amendments will: (1) provide that resource recovery equipment is certified by the Department of Environmental Protection pursuant to Section 403.715, F.S., and Rule 62-704.420, F.A.C.; (2) clarify that an applicant may obtain a preliminary examination report, but must obtain a final examination and certification of resource recovery equipment from the Department of Environmental Protection to be qualified for the exemption; (3) remove the requirement that a taxpayer who receives a preliminary examination report of resource recovery equipment from the Department of Environmental Protection be registered with the Department; (4) provide how to purchase qualified resource recovery equipment tax-exempt using the suggested exemption certificate; (5) remove requirements to provide a cash bond, deposit, or other security to the Department for purposes of obtaining the exemption; (6) clarify that tax is due on equipment or machinery that fails to qualify for final certification by the Department of Environmental Protection; (7) provide how and when tax, plus any applicable penalty or interest, is due to the Department; and subsection (8) provide how to obtain a refund of tax previously paid on certified resource recovery equipment or machinery.
SUBJECT AREA TO BE ADDRESSED: The subject area of the rule development workshop is the proposed changes to subsection 12A-1.001(5), F.A.C. (Resource Recovery Equipment or Machinery), the procedures and requirements used by the Department to administer the exemption for resource recovery equipment or machinery provided in Section 212.08(7)(q) FS.
SPECIFIC AUTHORITY: 212.17(6), 212.08(7)(h)2., (cc)5., 212.18(2), 213.06(1) FS.
LAW IMPLEMENTED: 212.02(10), (12), (16), (20), (21), 212.05, 212.08(6), (7)(f), (h), (q), (v), (x), (cc) FS.
A RULE DEVELOPMENT WORKSHOP WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: October 30, 2007, 11:00 a.m.
PLACE: Room 118, Carlton Building, 501 S. Calhoun Street, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Larry Green at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE DEVELOPMENT AND A COPY OF THE PRELIMINARY DRAFT, IF AVAILABLE, IS: Chris Whittier, Tax Law Specialist, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone]

THE PRELIMINARY TEXT OF THE PROPOSED RULE DEVELOPMENT IS:

12A-1.001 Specific Exemptions.

(1) through (4) No change.

(5) RESOURCE RECOVERY EQUIPMENT OR AND MACHINERY.

(a) Resource recovery equipment or and machinery used in a facility owned and operated exclusively by or on behalf of any county or municipality is exempt. To qualify for exemption, the resource recovery such equipment or and machinery must:

1. Be certified as resource recovery equipment or machinery by the Department of Environmental Protection under Section 403.715, F.S., and Rule Chapter 62-704, F.A.C., Certification of Resource Recovery Equipment; and

2. Be owned or operated exclusively by or on behalf of a county or municipality.

(b) To obtain certification of the resource recovery equipment or machinery, application must be made to the Department of Environmental Protection. The Department of Environmental Protection will issue a final examination and certification for qualifying resource recovery equipment or machinery after the equipment or machinery is installed and operational. Prior to the purchase and installation of qualifying resource recovery equipment or machinery, a preliminary examination report may be obtained from the Department of Environmental Protection. Persons who obtain a preliminary examination report must also obtain a final examination and certification after the equipment or machinery is installed and operational. Copies of preliminary examination reports and final examination and certifications issued by the Department of Environmental Protection are provided to the Department of Revenue.

(c)1.(b) Preliminary examination reports. A temporary exemption applies shall apply only to the resource recovery equipment or machinery specified in the written preliminary examination report issued delivered to the Executive Director or the Executive Director’s designee in the responsible program by the Department of Environmental Protection. The temporary This exemption is shall be final, contingent upon final examination and certification of the resource recovery equipment or machinery by the Department of Environmental Protection. In the event the Department of Environmental Protection does not issue a written decision granting or denying certification within 30 months from the date the preliminary examination report is received, the Executive Director or the Executive Director’s designee in the responsible program shall determine an amount sufficient to secure payment of any tax, penalty, and interest which may be due or which may become due in the event the Department of Environmental Protection denies certification and shall require a cash deposit, bond, or other security be issued to the Executive Director in such amount, unless the county or municipality for which the facility is being constructed executes a guarantee in favor of the Executive Director, the effect of which is to secure payment of any tax, penalty, and interest which may become due by the party directly liable to the Department for the tax.

2. Applicants who have received a preliminary examination report may purchase the resource recovery equipment or machinery identified in the preliminary report tax-exempt. A county or municipality that has received a preliminary examination report may issue a copy of its Florida Consumer’s Certificate of Exemption to make tax-exempt purchases of the identified resource recovery equipment or machinery. Prime contractors and subcontractors who have entered into a contractual agreement with a county or municipality to purchase the identified resource recovery equipment or machinery may purchase the equipment or machinery tax-exempt by issuing a written certification to the selling dealer. The prime contractor or subcontractor must certify that the equipment or machinery qualifies as resource recovery equipment or machinery that will be used exclusively by or on behalf of a county or municipality, as provided in Section 212.08(7)(q), F.S. The following is a suggested format of a written certification:

CERTIFICATION FOR RESOURCE RECOVERY EQUIPMENT OR MACHINERY

This is to certify that the resource recovery equipment or machinery, as described below, purchased on/or after _____ (DATE) from ________ (VENDOR) is purchased for use as qualifying resource recovery equipment or machinery, pursuant to Section 212.08(7)(q), F.S., and will be used exclusively by or on behalf of a county or municipality.

Resource Recovery Equipment or Machinery:

___________________________________

___________________________________

___________________________________

I understand that if I use the equipment or machinery for any purpose other than as resource recovery equipment or machinery, I must pay tax on the purchase price of the taxable property directly to the Department of Revenue.

I understand that it is a criminal offense to fraudulently issue this certificate to evade the payment of sales tax and that I will be liable for payment of the sales tax plus a penalty of 200% of the tax and may be subject to conviction of a third degree felony.

Purchaser’s Name ___________________________________

Purchaser’s Address _________________________________

Name and Title of Authorized Representative _____________

__________________________________________________

By _______________________________________________

(Signature of Purchaser)

______________________

(Date)

3.(c) Persons claiming exemption from payment of tax on resource recovery equipment shall submit a copy of the preliminary examination report issued by the Department of Environmental Protection with an Application for Sales and Use Tax Registration (Form DR-1, incorporated by reference in Rule 12A-1.097, F.A.C.), as provided in Rule 12A-1.060, F.A.C. to the Executive Director or the Executive Director’s designee in the responsible program. Upon approval of the application the Executive Director or the Executive Director’s designee in the responsible program shall issue a certificate of registration authorizing the tax exempt purchase of those items identified by the Department of Environmental Protection as possible resource recovery equipment. The purchaser is required to applicant shall file a monthly report with the Department of Revenue and pay tax at the time of purchase on any item items purchased tax exempt which have not been identified in the preliminary examination report by the Department of Environmental Protection that does not qualify as possible resource recovery equipment or machinery in the preliminary examination report, or have been determined not to be resource recovery equipment following final examination and certification by the Department of Environmental Protection. Upon completion of the project and final certification by the Department of Environmental Protection, the applicant shall forward to the Department of Revenue his Sales and Use Tax Certificate of Registration with any outstanding sales and use taxes due.

(d) Final examination and certification. Resource recovery equipment or machinery identified in a final examination and certification issued by the Department of Environmental Protection is exempt. Applicants, prime contractors, and subcontractors who obtained a preliminary examination report are entitled to an exemption for the resource recovery equipment or machinery identified in the final examination and certification. If it is determined by the Department of Environmental Protection that an item identified in the final examination and certification does not qualify as resource recovery equipment or machinery, tax, plus the applicable penalty and interest computed from the date of purchase, is due to the Department immediately.

(e) Refunds.

1. If an applicant, prime contractor, or subcontractor did not obtain a temporary exemption from the Department to purchase resource recovery equipment or machinery identified in the final examination and certification tax-exempt, the exemption may be obtained through a refund of previously paid taxes. Refunds will not be allowed until information has been provided to the satisfaction of the Executive Director or the Executive Director’s designee that the resource recovery equipment or machinery meets the requirements of Section 212.08(7)(q), F.S., and this rule. The purchaser of the qualified resource recovery equipment or machinery is entitled to a refund of tax paid on the qualifying resource recovery equipment or machinery. The purchaser must obtain a certified statement from its supplier(s) certifying that the supplier(s) has remitted the tax to the Department. If the purchaser paid tax directly to the Department, the purchaser is required to provide documentation that the tax was remitted directly to the Department.

2. The following is a suggested format for a certified statement to be issued by the supplier that tax has been remitted to the Department:

_____________(COMPANY), its undersigned officer who is duly authorized, hereby certifies to_________ (CONTRACTOR OR SUBCONTRACTOR) it has paid sales tax to the Florida Department of Revenue totaling the sum of $_____. The taxes were collected by COMPANY upon the sales of equipment or machinery as evidenced by the attached invoice(s).

The company further certifies the sales tax for the attached invoice(s) was paid to the Department of Revenue in the month following the date of sale under sales tax certificate number ___________.

SIGNATURE OF AUTHORIZED OFFICER OF COMPANY

BY: _________________________________________

TITLE: _______________________________________

DATE:________________________________________

3. An Application for Refund-Sales and Use Tax (Form DR-26S, incorporated by reference in Rule 12-26.008, F.A.C.) must be filed within 3 years after the date the tax was paid in accordance with the timing provisions of Section 215.26(2), F.S. A copy of the final examination and certification issued by the Department of Environmental Protection, the documentation to evidence the payment of tax, and the certified statement(s) from the supplier(s) that tax has been remitted to the Department must accompany the application for refund. An application for refund will not be considered complete pursuant to Sections 213.255(2) and (3), F.S., and Rule 12-26.003, F.A.C., and a refund will not be approved, until the applicant can demonstrate that the resource recovery equipment or machinery has been certified by the Department of Environmental Protection and that tax on the purchase of the equipment or machinery has been remitted to the Department.

(6) No change.

Specific Authority 212.08(7)(h)2., (cc)5., 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 212.02(10), (12), (16), (20), (21), 212.05, 212.08(6), (7)(f), (h), (q), (v), (x), (cc) FS. History–Revised 1-7-68, 1-7-70, Amended 1-17-71, Revised 6-16-72, Amended 7-19-72, 12-11-74, 5-27-75, 10-21-75, 9-7-78, 9-28-78, 10-18-78, 9-16-79, 2-3-80, 6-3-80, 7-7-80, 10-29-81, 12-3-81, 12-31-81, 7-20-82, 11-15-82, 10-13-83, 4-12-84, Formerly 12A-1.01, Amended 7-9-86, 1-2-89, 12-1-89, 7-7-92, 9-14-93, 5-18-94, 12-13-94, 3-20-96, 4-2-00, 6-28-00, 6-19-01, 10-2-01(1), (2), 10-2-01(2)-(7), 10-2-01(3)-(7), 8-1-02,________.