The purpose of the proposed amendments to Rule 12A-1.087, F.A.C. (Exemption for Power Farm Equipment; Electricity Used for Certain Agricultural Purposes; Suggested Exemption Certificate for Items Used for Agricultural Purposes), is to incorporate ...

 

DEPARTMENT OF REVENUE

Sales and Use Tax

RULE NO.:RULE TITLE:

12A-1.087Exemption for Power Farm Equipment; Suggested Exemption Certificate for Items Used for Agricultural Purposes

PURPOSE AND EFFECT: The purpose of the proposed amendments to Rule 12A-1.087, F.A.C. (Exemption for Power Farm Equipment; Electricity Used for Certain Agricultural Purposes; Suggested Exemption Certificate for Items Used for Agricultural Purposes), is to incorporate the new and expanded farm equipment exemptions provided in Chapter 2015-221, L.O.F.

SUMMARY: The proposed changes to Rule 12A-1.087, F.A.C., incorporate the new and expanded statutory farm equipment exemptions provided in Chapter 2015-221, L.O.F.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION: The Agency has determined that this will not have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under Section 120.541(1), F.S.; and 2) based on past experiences regarding the procedures for processing written protests of assessments and rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 212.17(6), 212.18(2), 213.06(1) FS.

LAW IMPLEMENTED: 212.02(14)(c), (30), (31), (32), 212.05(1), 212.0501, 212.06(1), 212.07(5), 212.08(3), (5)(a), (e), 212.085, 823.14(3) FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: November 19, 2015, 9:00 a.m.

PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1220, 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: Tonya Fulford 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 IS: Kimberly Bevis, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone: [phone]

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

12A-1.087 Exemption for Power Farm Equipment; Electricity Used for Certain Agricultural Purposes; Suggested Exemption Certificate for Items Used for Agricultural Purposes.

(1)(a) The sale, rental, lease, use, consumption, repair, including the sale of replacement parts and assessories, or storage for use of power farm equipment or irrigation equipment is exempt. To qualify for this exemption, the power farm equipment or irrigation equipment must be used exclusively on a farm or in a forest in the agricultural production of crops or products as produced by those agricultural industries included in Section 570.02(1), F.S., or for fire prevention and suppression work with respect to such crops or products. Power farm equipment that is not purchased, leased, or rented for exclusive use in the agricultural production of agricultural products, or for fire prevention or suppression work with respect to such crops or products, does not qualify for exemption. This exemption is not forfeited by moving qualifying power farm equipment between farms or forests.

(b) No change.

(2) For purposes of this rule, the following definitions will apply:

(a) No change.

(b) Agricultural production, as defined in Section 212.02(32), F.S., means the production of plants and animals useful to humans, including the preparation, planting, cultivating, or harvesting of these products or any other practices necessary to accomplish production through the harvest phase, including storage of raw products on a farm, and includes aquaculture, horticulture, floriculture, viticulture, forestry, dairy, livestock, poultry, bees, and any and all forms of farm products and farm production. 

(c) through (e) No change.

(f) Harvesting means the act or process of cutting, reaping, digging up, or gathering an agricultural product or crop from a place where grown. Harvesting does not include the processing of crops or products beyond any processing necessary for storage of raw products on the farm.

(g) No change.

(3)(a) The following is a nonexhaustive list of tax-exempt power farm equipment, as defined in Section 212.02(30), F.S.

1. through 14. Redesignated (a) through (n). No change.

(o) Drying equipment.

15. through 23. Redesignated (p) through (x). No change.

(y) Gassing equipment.

24. through 27. Redesignated (z) through (cc).  No change.

(dd)(28) Traveling “gun-type” and center pivot irrigation systems, excluding replacement hoses and pipes.

29 though 36. Redesignated (ee) through (ll). No change.

(mm) Refrigeration equipment.

37. through 42. Redesignated (nn) through (ss). No change.

(tt) Sorting equipment.

43. through 46. Redesignated (uu) through (xx). No change.

(yy) Washing equipment.

47. Redesignated (zz). No change.

(b) The purchase, lease, or rental of power farm equipment which is invoiced as a single working unit that is used exclusively on a farm or in a forest, as provided in paragraph (1)(a), qualifies for the exemption. When the component parts are invoiced separately, only those components that qualify for the exemption, as provided in paragraph (1)(a), may be purchased, leased, or rented tax-exempt.

1. Example: An irrigation supply system is purchased for use on a farm to provide water to an agricultural crop. The irrigation supply system, consisting of pumps, pipes, tubing, hoses, generator, motors, and other items, is purchased and invoiced as a single item at a single price. The purchase of the irrigation supply system is exempt.

2. Example: A farmer owns an irrigation supply system and wants to replace or update various components of the system. The farmer purchases an additional pump, a generator, and various hoses, pipe, and connectors in order to replace or update the system. The pump and generator qualify as power farm equipment, and these items may be purchased tax-exempt. The purchase of the various hoses, pipe, and connectors does not qualifyies as a purchase of power farm equipment and is subject to tax at the time of purchase. 

(4)(a) The portion of sales price below $20,000 for a trailer weighing 12,000 pounds or less and purchased by a farmer for exclusive use in agricultural production or to transport farm products is exempt from tax.  This exemption is allowed regardless of whether the trailer is required to be or is licensed as a motor vehicle under Chapter 320, F.S. The portion of the sales price at or above $20,000 for such a trailer remains subject to tax.  This exemption does not apply to leases or rentals of trailers.  The exemption for trailers under this paragraph will not be allowed unless the purchaser furnishes the seller a written certificate that the purchased items qualify for the exemption under Section 212.08(3), F.S. The format of a suggested certificate is contained in subsection (10).

(b) The partial exemption granted for trailers does not apply to non-farmers such as haulers, contractors, loggers, and providers of crop services.

(c) Repairs, replacement parts, and accessories used for trailers licensed under Chapter 320, F.S., are taxable.

(4) through (6) Renumbered (5) through (7) No change..

(7) The exemption for power farm equipment does not apply to charges for repairs to farm equipment or to purchases of replacement parts for such equipment.

(8) through (10)(e) No change.

(f) The following is a suggested format of an exemption certificate to be issued by any person purchasing or leasing power farm equipment qualifying for exemption under Section 212.08(3), F.S., or items that qualify for exemption as items for agricultural use or items for agricultural purposes. Exemption purposes listed on the suggested format that are not relevant to the purchaser or lessee may be eliminated from the certificate. The Department does not furnish the printed exemption certificate to be executed by purchasers or lessees when purchasing tax-exempt power farm equipment or items for agricultural use or for agricultural purposes.

SUGGESTED PURCHASER’S EXEMPTION CERTIFICATE

ITEMS FOR AGRICULTURAL USE OR FOR

AGRICULTURAL PURPOSES AND POWER FARM EQUIPMENT

This is to certify that the items identified below, purchased on or after ___________ (date) from ______________________ (Selling Dealer’s Business Name) are purchased, leased, licensed, or rented for the following purpose as checked in the space provided. This is not intended to be an exhaustive list:

(  ) Cloth, plastic, or similar material used for shade, mulch, or protection from frost or insects on a farm.

(  ) Fertilizers (including peat, topsoil, sand used for rooting purposes, peatmoss, compost, and manure, but not fill dirt), insecticides, fungicides, pesticides, and weed killers used for application on or in the cultivation of crops, groves, home vegetable gardens, and commercial nurseries.

(  ) Generators purchased, rented, or leased for exclusive use on a poultry farm. See the exemption category provided for power farm equipment, as defined in Section 212.02(30), F.S., which includes generators, motors, and similar types of equipment.

(  ) Insecticides and fungicides, including disinfectants, used in dairy barns or on poultry farms for the purpose of protecting cows or poultry or used directly on animals, as provided in Section 212.08(5)(a), F.S.

(  ) Nets, and parts used in the repair of nets, purchased by commercial fisheries.

(  ) Nursery stock, seedlings, cuttings, or other propagative material for growing stock.

(  ) Portable containers, or moveable receptacles in which portable containers are placed, that are used for harvesting or processing farm products.

(  ) Seedlings, cuttings, and plants used to produce food for human consumption.

(  ) Stakes used to support plants during agricultural production.

(  ) Items that are used by a farmer to contain, produce, or process an agricultural commodity, such as: glue for tin and glass for use by apiarists; containers, labels, and mailing cases for honey; wax moth control with paradichlorobenzene; cellophane wrappers; shipping cases; labels, containers, clay pots and receptacles, sacks or bags, burlap, cans, nails, and other materials used in packaging plants for sale; window cartons; baling wire and twine used for baling hay; and other packaging materials for one time use in preparing an agricultural commodity for sale.

(  ) Liquefied petroleum gas or other fuel used to heat a structure in which started pullets or broilers are raised.

(  ) Liquefied petroleum gas, diesel, or kerosene used to transport bees by water and in the operation of equipment used in the apiary of a beekeeper.

(  ) Liquefied petroleum gas, diesel, or kerosene used for agricultural purposes in any tractor, vehicle, or other farm equipment that is used exclusively on a farm for farming purposes.

(  ) Power farm equipment or irrigation equipment for exclusive use in the agricultural production of crops or products, as produced by those agricultural industries included in s. 570.02(1), F.S., or

(  ) Power farm equipment or irrigation equipment for exclusive use in fire prevention and suppression work for such crops or products, as produced by those agricultural industries included in s. 570.02(1), F.S., or

(  ) Repairs to, or parts and accessories for, qualifying power farm equipment or irrigation equipment for exclusive use in the agricultural production of crops or products, as produced by those agricultural industries included in s. 570.02(1), F.S., or

(  ) Repairs to, or parts and accessories for, qualifying power farm equipment or irrigation equipment for exclusive use in fire prevention and suppression work for such crops or products, as produced by those agricultural industries included in s. 570.02(1), F.S.

(  ) Power farm equipment, when purchased, rented, or leased for exclusive use in the agricultural production of crops or products as produced by those agricultural industries included in Section 570.02(1), F.S., or for fire prevention and suppression work with respect to such crops or products.

(  ) Other (include description and statutory citation):

____________________________________________________________________

I understand that if I use the item for any purpose other than the one I stated, I must pay tax on the purchase or lease price of the taxable item directly to the Department of Revenue.

I understand that if I fraudulently issue this certificate to evade the payment of sales tax 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.

The exemption specified by the purchaser may be verified by calling 1(800) 352-3671.

Under penalties of perjury, I declare that I have read the foregoing document and that the facts stated in it are true.

Purchaser’s Name

_______________________________________________________________________

Purchaser’s Address

___________________________________________________________________________

Name and Title of Purchaser’s Authorized Representative

___________________________________________________________________________

Sales and Use Tax Certificate No. (if applicable) ____________________________________

By ________________________________________________________________________

(Signature of Purchaser or Authorized Representative)

Title ______________________________________________________________________

(Title – only if purchased by an authorized representative of a business entity)

Date _______________________

Rulemaking Authority 212.17(6), 212.18(2), 213.06(1) FS. Law Implemented 212.02(14)(c), (30), (31), (32), 212.05(1), 212.0501, 212.06(1), 212.07(5), 212.08(3), (5)(a), (e), 212.085, 823.14(3) FS. History–New 10-7-68, Amended 1-7-70, 6-16-72, 10-18-78, 7-20-82, 4-12-84, Formerly 12A-1.87, Amended 12-13-88, 3-1-00, 6-19-01, 9-15-08, 1-17-13,_      ___.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Kimberly Bevis

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor and Cabinet

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: October 27, 2015

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: September 22, 2015.