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TIP # 99A01-23
DATE ISSUED: 07/06/99

Electricity or Steam Exemption Clarified and Expanded

Cigar Manufacturers Now Eligible for Exemption

Effective July 1, 1999, the sales tax exemption on charges for electricity or steam used to operate machinery and equipment at a fixed location is expanded to include cigar manufacturers.

Statutory Language Clarified

The statute is reworded to clearly set forth:

  • Manufacturing plants that use at least 75 percent of the total plant usage of electricity or steam to operate qualifying machinery and equipment receive a 100 percent exemption for all charges to the plant.
  • Manufacturing plants that use at least 50 percent but less than 75 percent of the total plant usage of electricity or steam to operate qualifying machinery and equipment receive a 50 percent exemption for all charges to the plant.

The Phase-in of the Exemption Applies as Follows:

  • Beginning July 1, 1999, 80 percent of the qualifying charges for such electricity or steam is exempt.
  • Beginning July 1, 2000, 100 percent of the qualifying charges for such electricity or steam is exempt.

Requirements to Qualify for These Exemptions

  • A taxpayer must be registered with the Work and Gain Economic Self-sufficiency (WAGES) Program. Other than sales and use tax registration, no special registration with the Department of Revenue (DOR) is required. (For WAGES Program Business Registry information, contact the Florida Department of Labor and Employment Security at 800-342-3450.) DO NOT send your WAGES registration application to the Department of Revenue.
  • The exemption is contingent upon prior registration with the WAGES Program Business Registry. In the event an otherwise qualified taxpayer fails to register with the WAGES Program Business Registry, the exemption does not apply. No refunds will be allowed for taxes paid prior to the date of the WAGES registration.
  • A taxpayer's SIC Code must be within the following Industry Major Group numbers: 10, 12, 13, 14, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, and 39, or Industry Group Number 212. "SIC" means those classifications contained in the Standard Industrial Classification Manual, 1987, as published by the Office of Management and Budget, Executive Office of the President. A chart of qualifying SIC Code group numbers is attached.
  • The electricity or steam must be consumed at a fixed location to operate machinery and equipment used to manufacture, process, compound, produce, or prepare for shipment items of tangible personal property for sale, or to operate pollution control equipment, recycling equipment, maintenance equipment, or monitoring or control equipment used in such operations.
  • Taxpayers claim the exemption by submitting a written certification of entitlement to the exemption to their electricity or steam provider. A suggested form is attached. (Qualifying taxpayers that provided an appropriate certification to their electricity provider on or after July 1, 1998 are not required to submit a new certification as a result of the 1999 legislative changes.) The certification relieves the seller from the responsibility of collecting tax on exempt amounts and the Department of Revenue will look solely to the purchaser for recovery of tax, if the purchaser is not entitled to the exemption. DO NOT send this certification to the Department of Revenue.
  • For cigar manufacturers, the exemption applies to qualifying charges billed on or after July 1, 1999. For example, a billing cycle beginning June 15, 1999, and ending July 14, 1999, with a billing date of July 15, 1999, would be exempt in its entirety if the taxpayer was registered with the WAGES Program on or before July 15, 1999.
  • It should be noted that the exemption also applies to discretionary sales surtaxes (local option taxes).

For More Information

References:
Ch. 99-364, L.O.F.
Ch. 99-208, L.O.F.
S. 212.08(7)(ii), F.S.

SUGGESTED PURCHASER'S EXEMPTION CERTIFICATE
ELECTRICITY OR STEAM USED TO MANUFACTURE ITEMS FOR SALE
FOR USE ON OR AFTER JULY 1, 1999

 

_______________________________ (Purchaser's Name) certifies that the electricity or steam purchased on or after _______________ under the following account number(s) is exempt from sales tax, because such electricity or steam will be used at a fixed location to operate machinery and equipment that is used to manufacture, process, compound, produce, or prepare for shipment items of tangible personal property for sale, or to operate pollution control equipment, recycling equipment, maintenance equipment, or monitoring or control equipment used in such operations.

_______________________________ (Purchaser's Name) further certifies that: a) its four-digit SIC Industry Number is listed below, and this number is classified under SIC Industry Major Group Number 10, 12, 13, 14, 20, 22, 23, 24, 25, 26, 27, 28, 29, 30, 31, 32, 33, 34, 35, 36, 37, 38, or 39, or Industry Group Number 212, as contained in the Standard Industrial Classification Manual, 1987, as published by the Office of Management and Budget, Executive Office of the President; b) it has registered effective ______________ with the Florida Department of Labor and Employment Security, Division of Jobs and Benefits, to participate in the WAGES Program; and either c) at least 75% of the total plant usage of electricity or steam used at the fixed location is used to operate qualified machinery and equipment as described above, and the location qualifies for the 100% exemption, or d) at least 50% but less than 75% of the total plant usage of electricity or steam used at the fixed location is used to operate qualified machinery and equipment as described above, and the location qualifies for the 50% exemption.

SIC INDUSTRY NUMBER _________________

Address of Exempt
Locations
Electric or Steam
Account Number
Amount of Exemption
Claimed (Circle One)
______________________________________________100% / 50%
______________________________________________100% / 50%
______________________________________________100% / 50%

The undersigned understands that if such purchases of electricity or steam do not qualify for exemption, the undersigned will be subject to sales and use tax, interest, and penalties. Purchaser further understands that when any person shall fraudulently, for the purpose of evading tax, issue to a vendor or to any agent of the state a certificate or statement in writing in which he or she claims exemption from the sales tax, such person, in addition to being liable for payment of the tax plus a mandatory penalty of 200% of the tax, shall be liable for fine and punishment provided by law for conviction of a felony of the third degree, as provided in s. 775.082, s. 775.083, or s. 775.084.

________________________________________________________________
Purchaser's Name
(Print or Type)
Date
________________________________________________________________
Signature and TitleFlorida Sales Tax Number
________________________________________________________________
Federal Employer Identification
Number (F.E.I.) or Social Security Number
Telephone Number

Effective Date of Registration with the Florida Department of Labor and Employment Security, WAGES Program Business Registry: _________________________

Submit this certificate to your electricity or steam provider. DO NOT send it to the Department of Revenue.

INDUSTRIES ELIGIBLE FOR SALES TAX EXEMPTION
FOR USE OF ELECTRICITY OR STEAM

SIC Industrial
Major Group Numbers
Short Titles of
Major Group Numbers
10Metal Mining
12Coal Mining
13Oil & Gas Extraction
14Mining & Quarrying of Nonmetallic Minerals, Except Fuels
20Food & Kindred Products
22Textile Mill Products
23Apparel and Other Finished Products Made from Fabrics and Similar Materials
24Lumber & Wood Products
25Furniture & Fixtures
26Paper & Allied Products
27Printing, Publishing, and Allied Industries
28Chemicals and Allied Products
29Petroleum Refining and Related Industries
30Rubber and Miscellaneous Plastics Products
31Leather and Leather Products
32Stone, Clay, Glass, and Concrete Products
33Primary Metal Industries
34Fabricated Metal Products, Except Machinery and
Transportation Equipment
35Industrial and Commercial Machinery and Computer Equipment
36Electronic and Other Electrical Equipment and
Components, Except Computer Equipment
37Transportation Equipment
38Measuring, Analyzing, and Controlling Instruments;
Photographic, Medical and Optical Goods; Watches and
Clocks
39Miscellaneous Manufacturing Industries
SIC Industry
Group Number
Short Title
212Cigars

"SIC" means those classifications contained in Standard Industrial Classification Manual, 1987, as published by the Office of Management and Budget, Executive Office of the President.