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Senate Bill 2362

Senate Bill sb2362

CODING: Words stricken are deletions; words underlined are additions.
    Florida Senate - 2005                                  SB 2362

    By Senator Smith





    14-1171-05

  1                      A bill to be entitled

  2         An act relating to research and development

  3         costs; amending s. 212.052, F.S.; defining the

  4         term "machinery and equipment"; deleting a

  5         limitation on an exemption from the tax on

  6         sales, use, and other transactions for property

  7         used in research or development; providing an

  8         exemption for machinery and equipment used

  9         predominantly for research and development

10         activities; allowing a business that has been

11         certified to receive the exemption to designate

12         one or more state universities or community

13         colleges as recipients of part or all of the

14         amount of the exemption under certain

15         conditions; providing that the business retains

16         the rights to patents, royalties, or real or

17         intellectual property unless an agreement

18         specifies otherwise; providing an effective

19         date.

20  

21  Be It Enacted by the Legislature of the State of Florida:

22  

23         Section 1.  Subsections (1) and (2) of section 212.052,

24  Florida Statutes, are amended, present subsections (3), (4),

25  and (5) of that section are redesignated as subsections (4),

26  (5), and (6), respectively, and a new subsection (3) is added

27  to that section, to read:

28         212.052  Research or development costs; exemption.--

29         (1)  For the purposes of the exemption provided in this

30  section, the term:

31  

                                  1

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2362
    14-1171-05




 1         (a)  "Machinery and equipment" means molds, dies,

 2  machine tooling, other appurtenances or accessories to

 3  machinery and equipment, testing equipment, test beds,

 4  computers, and software, whether purchased or self-fabricated,

 5  and, if self-fabricated, includes materials and labor for

 6  design, fabrication, and assembly.

 7         (b)  "Product" means any item, device, technique,

 8  prototype, invention, or process that is, was, or may be

 9  commercially exploitable.

10         (c)(a)  The term "Research or development" means

11  research which has one of the following as its ultimate goal:

12         1.  Basic research in a scientific field of endeavor.

13         2.  Advancing knowledge or technology in a scientific

14  or technical field of endeavor.

15         3.  The development of a new product, whether or not

16  the new product is offered for sale.

17         4.  The improvement of an existing product, whether or

18  not the improved product is offered for sale.

19         5.  The development of new uses of an existing product,

20  whether or not a new use is offered as a rationale to purchase

21  the product.

22         6.  The design and development of prototypes, whether

23  or not a resulting product is offered for sale.

24  

25  The term "research or development" does not include ordinary

26  testing or inspection of materials or products used for

27  quality control, market research, efficiency surveys, consumer

28  surveys, advertising and promotions, management studies, or

29  research in connection with literary, historical, social

30  science, psychological, or other similar nontechnical

31  activities.

                                  2

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2362
    14-1171-05




 1         (b)  The term "costs" means cost price as defined in s.

 2  212.02(4).

 3         (c)  The term "product" means any item, device,

 4  technique, prototype, invention, or process which is, was, or

 5  may be commercially exploitable.

 6         (2)  Notwithstanding any provision of this chapter to

 7  the contrary, Any person, including an affiliated group as

 8  defined in s. 1504 of the Internal Revenue Code of 1954, as

 9  amended, who manufactures, produces, compounds, processes, or

10  fabricates in any manner tangible personal property for such

11  taxpayer's own use directly and solely in research or

12  development shall not be subject to the tax imposed by this

13  chapter upon the cost of the product so manufactured,

14  produced, compounded, processed, or fabricated. However, the

15  tax imposed by this chapter shall be due on the purchase,

16  rental, or repair of real property or tangible personal

17  property employed in research or development which is subject

18  to the tax imposed by this chapter at the time of purchase or

19  rental.

20         (3)  Machinery and equipment used predominantly for

21  research and development activities are not subject to the tax

22  imposed by this chapter. A business certified to receive this

23  exemption may designate one or more state universities or

24  community colleges as recipients of up to 100 percent of the

25  amount of the exemption for which the business qualifies. To

26  receive these funds, the state university or community college

27  must agree to match the funds so earned with equivalent cash,

28  programs, services, or other in-kind support on a one-to-one

29  basis in the pursuit of research and development projects as

30  requested by the certified business. The rights to any

31  patents, royalties, or real or intellectual property must be

                                  3

CODING: Words stricken are deletions; words underlined are additions.






    Florida Senate - 2005                                  SB 2362
    14-1171-05




 1  vested in the business unless the business and the state

 2  university or community college agree otherwise.

 3         Section 2.  This act shall take effect July 1, 2005.

 4  

 5            *****************************************

 6                          SENATE SUMMARY

 7    Amends provisions relating to research and development
      costs.  Defines the term "machinery and equipment."
 8    Deletes a limitation on an exemption from the tax on
      sales, use, and other transactions for property used in
 9    research or development. Provides an exemption for
      machinery and equipment used predominantly for research
10    and development activities. Allows a business that has
      been certified to receive the exemption to designate one
11    or more state universities or community colleges as
      recipients of part or all of the amount of the exemption
12    under certain conditions. Provides that the business
      retains the rights to patents, royalties, or real or
13    intellectual property unless an agreement specifies
      otherwise.
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                                  4

CODING: Words stricken are deletions; words underlined are additions.

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