Florida Tax Incentives For Businesses

Rural Job Tax Credit

The Rural Job Tax Credit Program provides an incentive for eligible businesses, located within designated rural counties, to create new jobs.

• The tax credit can range from $1,000 to $1,500 per qualified employee.
• A business may receive up to $500,000 in tax credits during any one calendar year for its efforts in creating jobs.
• File a Rural Job Tax Credit Program Application for Eligibility (Form RU-J) with the Florida Department of Commerce.
• Approved credits are taken on the Sales and Use Tax Return (Form DR-15 ).

References: Section 212.098, Florida Statutes (F.S.), and Tax Information Publication #01A01-06 

Urban High-Crime Area Job Tax Credit

The Urban Job Credit Program provides an incentive for eligible businesses, located within designated urban areas, to create new jobs.

• The credit ranges from $500 to $2,000 per qualified employee.
• File an Urban Job Tax Credit Program Application for Eligibility (Form UR-J) with the Florida Department of Commerce.
• Approved credits are taken on the Sales and Use Tax Return (Form DR-15 ).

References: Section 212.097, F.S.

Child Care Tax Credits Program

A credit is available against specific Florida taxes, including the Florida use tax due from a direct pay permit holder, for taxpayers that:

• establish an eligible child care facility for employees;
• operate an eligible child care facility for employees; or
• pay an eligible child care facility in the name and for the benefit of an employee.

For more information, visit the Department’s Child Care Tax Credits Program webpage.

References: Sections 212.1835 and 402.261, F.S.

Exemption for Research or Development Costs

This exemption is available to a company or an individual.

• Exemption applies only to the cost price of tangible personal property incorporated or fabricated into the end product.
• Excludes ordinary testing, quality control inspections, market research, surveys, and research in nontechnical areas such as literary, historical, or social sciences.
• Results of research and development must be commercially exploitable, but the sale of a resulting product is not required.
• Exemption is available by issuing the seller an exemption certificate or a Sales and Use Tax Direct Pay Permit.

References: Section 212.052, F.S., and Rule 12A-1.043, F.A.C.

New Worlds Reading Initiative Tax Credit

Taxpayers may make contributions to an administrator and receive a dollar-for-dollar credit against specific Florida taxes, including the Florida use tax due from a direct pay permit holder. For more information, visit the Department's New World Reading Initiative – Tax Credit webpage.

References: Sections 212.1833 and 1003.485, F.S.

Scholarship-Funding Organizations – Tax Credits for Contributions

The Florida Tax Credit Scholarship Program, the Florida Tax Credit Scholarship Program for Commercial Rental Property, and the Hope Scholarship program allow businesses and individuals to make private, voluntary contributions to nonprofit scholarship funding organizations and receive a dollar-for-dollar credit against Florida sales tax or use tax. For more information, visit the Department's Scholarship-Funding Organizations – Tax Credits for Contributions webpage.

References: Sections 212.099, 212.1831, 212.1832, 1002.395, and 1002.40, F.S., and Rule Chapter 12-29, F.A.C.

Strong Families Tax Credit

Taxpayers may make contributions to eligible charitable organizations and receive a dollar-for-dollar credit against specific Florida taxes, including the Florida use tax due from a direct pay permit holder. For more information, visit the Department's Strong Families Tax Credit webpage.

References: Sections 212.1834 and 402.62, F.S.

Tax Refund for Building Materials, Rental Items, and Pest Control Services Used in Rural Areas of Opportunity

The owner, lessor, or lessee of new construction located in a rural area of opportunity may apply for a refund of Florida sales tax.

• The refund is for sales tax paid on building materials that become a component part of real property and the rental of tangible personal property and pest control services used in new construction in a rural area of opportunity.
• The refund is 97.5% of the Florida sales tax paid per parcel with a minimum of $500 per parcel and a maximum of $10,000 per parcel.
• Complete and file the Florida Department of Commerce Rural Areas of Opportunity Application for Certification – Exempt Goods and Services Sales Tax Refund (Form RAO ).
• Complete and file a Sales and Use Tax - Application for Refund (Form DR-26S ) and attach a copy of the Florida Department of Commerce certification approval letter, the approved Rural Areas of Opportunity Application for Certificate (Form RAO) and other required documentation, or you can file Form DR-26S online.

Reference: Section 212.08(5)(q), F.S.

Exemption for Building Materials Used in Construction of Eligible Residential Units for Affordable Housing

This exemption applies to building materials used in construction of eligible residential units for affordable housing. The exemption is provided through a refund of previously paid sales and use tax.

• A refund may be claimed by:
  • The owner at the time the eligible residential unit is substantially completed.
  • A municipality, county, other governmental unit or agency, or nonprofit, community-based organization if the building materials are paid for from the funds of a community development block grant, the State Housing Initiatives Partnership Program, or a similar grant or loan program.
• A refund will not be granted unless the amount to be refunded exceeds $500.
• The refund may not exceed the lesser of $5,000 or 97.5% of the Florida sales or use tax paid on the cost of building materials per eligible residential unit.
• To request a refund:
  • Complete and mail an Application for Refund of Sales and Use Tax on Building Materials Used in Construction of Eligible Residential Units for Affordable Housing (Form DR-26AH ) and a Sales and Use Tax – Application for Refund (Form DR-26S ) with your other required documentation, or
  • Complete and submit your refund application Form DR-26S online and upload for electronic submission your completed application Form DR-26AH and other required documentation.

Reference: 212.08(5)(u), F.S.

Florida Neighborhood Revitalization Program (Tax Refund for Building Materials used in Redevelopment Projects)

The owner of a redevelopment project located within a Brownfield area, an urban high-crime area, an urban infill and redevelopment area, or a Front Porch Florida Community may apply for a refund of Florida sales tax.

• The refund is for sales tax paid on building materials that become a component part of a housing project or a mixed-use project within the designated areas.
• Complete and file a Florida Neighborhood Revitalization Program Application for Sales and Use Tax (Form DR-26RP ) and a Sales and Use Tax – Application for Refund (Form DR-26S ), or you can file Form DR-26S online and attach a completed Form DR-26RP.

Reference: Section 212.08(5)(o), F.S.

Tax Refund for Community Contribution

A business that donates cash, property, or goods to an approved community-based organization or government agency may apply for a refund of sales tax.

• The refund is equal to 50% of the value of the donation, with a limit of $200,000 per year.
• File an Application for a Community Contribution Tax Credit (Form E-17TCA#01) with the Florida Department of Commerce.
• Complete and file a Sales and Use Tax - Application for Refund (Form DR-26S ) and attach a copy of the Florida Department of Commerce approval letter and other required documentation, or you can file Form DR-26S online.

Reference: Section 212.08(5)(p), F.S.

Exemption for Industrial Machinery and Equipment

This exemption is available to any business whose primary business activity at the location where the industrial machinery and equipment is used to manufacture, process, compound, or produce items of tangible personal property for sale is specified in North American Industry Classification System (NAICS) Codes (2007) 31, 32, or 33 (Manufacturing).

• Exempts parts and accessories only when purchased for the machinery and equipment before the date the machinery and equipment is placed into service.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(jjj), Florida Statutes (F.S.), and Tax Information Publication #16A01-07 

Exemption for Industrial Machinery and Equipment Used by Metal Recyclers

This exemption for industrial machinery and equipment used as an integral part in the recycling of metals for sale is available to recycling industries classified under North American Industry Classification System (NAICS) Code (2007) 423930.

• Exempts parts and accessories only when purchased for the machinery and equipment before the date the machinery and equipment is placed into service.
• Exemption is available by issuing the seller an exemption certificate

References: Section 212.08(7)(jjj), F.S., and Tax Information Publication #16A01-07 

Exemption for Industrial Machinery and Equipment Used by a New or Expanding Business to Increase Productive Output

This exemption is available for machinery for a new business ordered before the start of productive operations and received within 12 months of the date the business begins its productive operations.

• “Industrial machinery and equipment” means tangible personal property or other property that has a depreciable life of 3 years or more and is used as an integral part in the manufacturing, processing, compounding, or production of tangible personal property for sale or is exclusively used in spaceport activities. Florida Law also specifies the machinery and equipment that does not qualify for this exemption.
• Expanding businesses must show a minimum 5% increase in productive output.
• Exemption is available by completing an Application for Temporary Tax Exemption Permit (Form DR-1214 ).

References: Section 212.08(5)(b), F.S., and Rule 12A-1.096, Florida Administrative Code (F.A.C.)

Exemption for Machinery and Equipment and Other Materials Used for Pollution Control

This exemption is available for purchases of machinery and equipment used primarily to control or abate pollutants resulting from manufacturing, processing, compounding, or producing for sale items of tangible personal property at a fixed location. Qualifying purchases must be used, installed, or constructed to meet a law enforced by, or a condition of a permit issued by, the Florida Department of Environmental Protection.

• Manufacturing facilities - Exemption applies to:
  • Facilities
  • Devices
  • Fixtures
  • Equipment
  • Machinery
  • Specialty chemicals (as defined by statute)
  • Bioaugmentation products (as defined by statute)
• Privately owned or operated landfills - Exemption applies to equipment, machinery, and materials.
• Construction and demolition debris disposal facilities - Exemption applies to equipment, machinery, and materials.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.051, F.S., and Tax Information Publications: #98A01-27 , #98A01-28 , and #00A01-17 

Exemption for Machinery and Equipment Used to Produce Electricity or Steam

This exemption is available to facilities that burn hydrogen or boiler fuels, other than residual oil.

• The electrical or steam energy must be primarily used for manufacturing, processing, compounding, or producing for sale, items of tangible personal property in Florida.
• If a facility burns hydrogen or both residual and nonresidual fuels, the exemption is prorated.
• If 15% or less of all electrical or steam energy produced is from using residual fuel, the full exemption applies.

Reference: Section 212.08(5)(c), F.S., and Tax Information Publications #00A01-20  and #22A01-11 

Exemption for Machinery and Equipment Used for Research and Development

This exemption is available for purchases of machinery and equipment used predominantly (at least 50%) for research and development as defined by law.

• “Machinery and equipment” includes, but is not limited to, molds, dies, machine tooling, other appurtenances or accessories to machinery and equipment, testing and measuring equipment, test beds, computers, and software, whether purchased or self-fabricated, and, if self-fabricated, includes materials and labor for design, fabrication, and assembly.
• “Research and development” does not include ordinary testing or inspection of materials or products used for quality control, market research, efficiency surveys, consumer surveys, advertising and promotions, management studies, or research in connection with literary, historical, social science, psychological, or other similar nontechnical activities.
• Exemption is available by issuing the seller an affidavit or a Sales and Use Tax Direct Pay Permit.

References: Section 212.08(18), F.S., and Rule 12A-1.043, F.A.C.

Exemption for Machinery and Equipment Used in Semiconductor, Defense, or Space Technology Production

This exemption applies to machinery and equipment purchased by a certified semiconductor facility (including expansion of clean rooms in semiconductor-manufacturing facilities), or by a certified defense or space technology facility for use in the manufacture of their respective products for sale as defined by statute.

• Certification is obtained under an application process conducted by the Florida Department of Commerce.
• A business certified to receive this exemption may elect to designate one or more state universities or community colleges as recipients of up to 100% of the amount of the exemption.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(5)(j), F.S.

Exemption for Certain Repair and Labor Charges

This exemption is available to any business classified under specified Standard Industry Code (SIC) Major Groups for mining, construction, and manufacturing.

• Exempts labor charges for the repair of, and parts and materials used in the repair of and incorporated into, industrial machinery and equipment which is used for the manufacture, processing, compounding, production, or preparation for shipping of items of tangible personal property at a fixed location within Florida.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(xx), F.S., and Tax Information Publication #00A01-15 

Exemption for Postharvest Machinery and Equipment

This exemption is available to any business whose primary business activity is classified under code 115114 of the North American Industry Classification System (NAICS) (2007).

• Exempts postharvest machinery and equipment used at a fixed location in Florida to perform postharvest activities, which are services performed on crops, after their harvest, with the intent of preparing them for market or further processing.
• Exempts any parts and materials that are incorporated into the repair of such machinery and equipment, and exempts all labor charges for the repair.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(jjj), F.S., and Tax Information Publication #16A01-07 

Exemption for Recycling Roll Off Containers

This exemption is available to any business whose primary business activity as specified in North American Industry Classification System (NAICS) Code (2007) is 423930 (Recyclable Material Merchant Wholesalers).

• Exempts recycling roll off containers used exclusively for business activities classified under NAICS Code 432930.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(ooo), F.S., and Tax Information Publication #18A01-06 

Exemption for Boiler Fuels Used for Certain Industrial Manufacturing Processes

Boiler fuels purchased for use as a combustible fuel (purchases of natural gas, residual oil, recycled oil, waste oil, solid waste material, coal, sulfur, wood, wood residue or wood bark) in the manufacturing, processing, compounding, or production of tangible personal property for sale in Florida are exempt from sales tax.

• The exemption does not apply to boiler fuels used by a firm regulated by the Florida Department of Business and Professional Regulation, Division of Hotels and Restaurants.
• Exemption is available by issuing the seller an exemption certificate.

References: Section 212.08(7)(b), Florida Statutes (F.S.), and Rule 12A-1.059, Florida Administrative Code (F.A.C.)

Exemption for Electricity Used for Agricultural Purposes

Electricity used for agricultural purposes is exempt from sales tax when:

• Used directly or indirectly for the production and processing of agricultural farm products on a farm;
• Used for the packing of agricultural products on a farm; or
• Used in a packinghouse (including packinghouses not located on a farm) for the production, packing, or processing of agricultural products.

The exemption does not apply to electricity used in buildings or structures where agricultural products are sold at retail.

The exemption is available by issuing the utility provider an exemption certificate.

References: Sections 212.02(28), 212.02(32), 212.08(5)(e), and 212.085, F.S., Rule 12A-1.087, F.A.C., and Tax Information Publication #12A01-07 

Exemption for Electricity or Steam Used to Operate Machinery or Equipment Used in Certain Manufacturing Industries

This exemption applies only to industries classified under Standard Industry Classification Industry Major Group Numbers 10, 12, 13, 14, 20, 22 through 39 and Industry Group Number 212, contained in the Standard Industrial Classification Manual, 1987, as published by the Office of Management and Budget, Executive Office of the President, and to industries classified under Code 423930 of the North American Industry Classification System (NAICS) Code (2007).

Businesses within these industries may purchase electricity or steam tax-exempt to be used at a fixed location to operate machinery and equipment to:

• manufacture, process, compound, or produce items of tangible personal property for sale; or
• operate pollution control equipment, recycling equipment, maintenance equipment, or monitoring or control equipment in such operations.

The exemption is available by issuing the electricity or steam provider an exemption certificate.

References: Sections 212.08(7)(ff), F.S.

Exemption for Natural Gas Used to Generate Electricity in a Non-Combustion Fuel Cell Used in Stationary Equipment

Natural gas used to generate electricity in a non-combustion fuel cell in stationary equipment is exempt from sales and use tax.

• Exemption is available by issuing the utility provider an exemption certificate.

References: Section 212.08(4)(a), F.S., and Tax Information Publication #13A01-08 

Exemption for Solar Energy Systems

This exemption is available to individuals and companies.

• Eligible systems must convert sunlight into energy for use as a power source for another system.
• Applies to equipment and any component currently certified by Florida Solar Energy Center as a qualifying solar energy component: solar collectors, pumps and controls, photovoltaic power conditioning equipment, energy storage units, and accessories integral to a qualifying system.
• Exemption is not available when the cost of the solar equipment cannot be separated from the total cost of the product (i.e., patio lights, calculators, novelty items).
• Exemption is available by certifying to the seller that the items purchased or leased qualify for the exemption.

References: Section 212.08(7)(hh), F.S., and Tax Information Publication #05A01-05