Florida Tax Incentives: Who is Exempt from Sales & Use Tax in Southeast Volusia?

Thu, Jul 15, 2021 at 2:52PM

Florida Tax Incentives: Who is Exempt from Sales & Use Tax in Southeast Volusia?

The state of Florida levies a 6% state sales tax rate on retail sale, lease, or rental of most goods. Furthermore, use tax is due on all purchases brought into our beautiful state – unless specifically exempted. Businesses from many different industries are fortunate to call the Sunshine State their home due in part to sales and use tax exemptions that are designed to contribute to a healthier business climate for all. Keep reading to learn more about how these Florida tax incentives might benefit your business!

The Healthcare Industry

In Florida, state law divides hospitals into two distinct categories for tax purposes. These are as follows:

  • Facilities that are registered as 501(c)(3) nonprofit, educational, or charitable entities are exempt from sales tax. These entities can purchase materials, supplies, and most services without paying tax. In order to qualify for this exemption, entities must submit an application with the Florida Department of Revenue.
  • In the case of for-profit hospitals, a number of items may be purchased tax-free based upon the item in question. For example, major categories of tax-exempt items include hypodermic needles and syringes, prescription drugs, test kits, and even prosthetics!

The Manufacturing Industry

New manufacturing machinery and equipment are not subject to sales tax in Florida, making our state a desirable base of operations for manufacturers. Furthermore, repair parts and labor necessary to operate that machinery is tax-exempt. Labor is exempt from Florida sales tax provided that no tangible personal property is transferred during the transaction. Other facets of tax exemptions for manufacturing in Florida include:

  • Material handling equipment (e.g., forklift and cranes) may be exempt if they are used in the production process
  • Utilities including electricity and natural gas consumed in production
  • Utility usage may be apportioned based upon taxable and non-taxable usage

Sales tax exemptions abound in Florida but the challenge for manufacturers is gathering supporting documentation – especially when usage must be apportioned.

Software

Software that is either custom or electronically transferred is exempt from sales tax here. The state of Florida defines custom software as any program that surveys a buyer’s needs and makes recommendations, whereas electronically transferred software is not considered to be tangible personal property and is therefore not subject to sales and use tax. In order to qualify for tax exemption on software such as this, be sure to provide supporting documentation.

Additional tax exemptions in Florida include motion picture production, parts for aviation in Florida, machinery used in research and development, and more. Our tax climate fosters a hospitable environment for many businesses to thrive. If you are considering making the move or simply want to know more about Southeast Volusia’s favorable financial resources, reach out to the Southeast Volusia Manufacturing & Technology Coalition today! We’ll help you find the perfect commercial real estate in Florida for your business so you can begin reaping our state’s numerous tax benefits.


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