REVENUE ESTIMATING CONFERENCE

Transcription

1 Tax: Aviation Fuel Tax Issue: Capital City Refund Bill Number(s): Proposed Language Sponsor(s): N/A Month/Year Collection Impact Begins: July 1, 2016 Date of Analysis: 3/01/15 Entire Bill Partial Bill: REVENUE ESTIMATING CONFERENCE Section 1: Narrative a. Current Law: Currently, Part III of Chapter 206, F.S., requires an aviation fuel tax of 6.9 cents per gallon is applied to all aviation fuel purchased in the state, except for aviation fuel placed in bond under the control of the Department of Treasury, U.S. Customs Service, or aviation fuel sold for use in aircraft owned by the Federal Government. All tax revenue collected from the sale of aviation fuel is deposited in the Fuel tax Collection Trust Fund and then transferred to the State Transportation Trust Fund monthly after deducting the service charges imposed by s , F.S., the refunds granted pursuant to s and s , F.S., and the administrative costs incurred by DOR. Under s , F.S., a carrier transporting persons or property for compensation or hire by air is entitled to receive a refund of the taxes imposed by this part of aviation fuel purchased by such carrier. The refund may not exceed 0.6 percent of the wages paid by the carrier to employees located or based within this state and who are covered by the provisions of chapter 443, F.S. Under s , F.S., any licensed wholesaler or terminal supplier delivering aviation fuel to an air carrier offering transcontinental jet service and, after January 1, 1996, increasing the air carrier s Florida workforce by more than 1000 percent and by 250 or more fulltime equivalent employee positions, may receive a credit or refund as the ultimate vendor of the aviation fuel for the 6.9 cents excise tax previously paid, provided the air carrier has not facility for fueling highway vehicles from the tank in which the aviation fuel is stored. b. Proposed Change: Adds subsection (7), F.S., to grant a quarterly refund of the aviation fuel excise tax on gallons of aviation fuel placed into an aircraft owned by a commercial airline while the aircraft is in Tallahassee, the state capital. To qualify the commercial airline must: Have a ticket counter presence in Tallahassee Have aircraft refueled in Tallahassee in connection with a flight that embarks or disembarks passengers, and lands in and takes off from Tallahassee. Section 2: Description of Data and Sources From January 1, 2015 to December 31, 2015, there are about 4 to 6 commercial airlines and aircrafts with total gallons of 1,848,933 pumped at the Tallahassee Airport * 1,848,933= 127,576 Section 3: Methodology (Include assumptions and attach details) We took the information that we received from the FBO and grew at the growth rate of passengers. We also excluded freight carriers from the gallon amount. Section 4: Proposed Fiscal Impact High Middle Low Cash Recurring Cash Recurring Cash Recurring ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) ( 0.1M) List of affected Trust Funds: Aviation Fuel Tax Group 705

2 REVENUE ESTIMATING CONFERENCE Tax: Aviation Fuel Tax Issue: Capital City Refund Bill Number(s): Proposed Language Sponsor(s): N/A Month/Year Collection Impact Begins: July 1, 2016 Date of Analysis: 3/01/15 Section 5: Consensus Estimate (Adopted: 03/02/2016): The Conference adopted the proposed estimate. GR Trust Local/Other Total Cash Recurring Cash Recurring Cash Recurring Cash Recurring (Insignificant) (Insignificant) (0.1) (0.1) (0.1) (0.1) (Insignificant) (Insignificant) (0.1) (0.1) (0.1) (0.1) (Insignificant) (Insignificant) (0.1) (0.1) (0.1) (0.1) (Insignificant) (Insignificant) (0.1) (0.1) (0.1) (0.1) (Insignificant) (Insignificant) (0.1) (0.1) (0.1) (0.1) 706

3 Aviation Fuel Capital City Refund Total A B C D E F G Capital City Aviation Year Number of Passengers Growth Rate Year Gallons Fuel Consumption CY ,445 FY ,848, , CY , FY ,762, , CY , FY ,679, , CY , FY ,601, , CY , FY ,526, , CY , FY ,454, , CY , FY ,386,734 95, CY , CY , Avg High Middle Low Cash Recurring Cash Recurring Cash Recurring (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) March 2, 2016 Impact Conference 707

4 Tax: Sales Tax Issue: Plug in Electric Cars Bill Number(s): HB1123 REVENUE ESTIMATING CONFERENCE Entire Bill Partial Bill: Sponsor(s): Rep. Dudley Month/Year Impact Begins: Effective July 1, 2016, one month lag for Impact. Date of Analysis: March 1, 2016 Section 1: Narrative a. Current Law: Currently no sales tax exemption for Plugin electric vehicles or Plugin Hybrid Vehicles. Such vehicles are currently subject to the state 6% sales tax and any applicable local option. b. Proposed Change: (19) EXEMPTIONS; PLUGIN ELECTRIC VEHICLES. (a) The sale of a new plugin electric vehicle is exempt from the tax imposed by this chapter if the purchaser is a resident of the state as defined in s (4) and the vehicle is purchased from a licensed motor vehicle dealer in the state. (b) The sales tax exemption applies to that portion of the sales price less than 40,000, not to exceed an exemption of 2,400 for each plugin electric vehicle. The exemption provided under this paragraph does not apply to the lease or rental of a plugin electric vehicle. (c) The exemption provided in this subsection does not amend or repeal subsection (10), which provides a partial exemption for certain motor vehicles sold to a resident of another state. (d) For the purpose of the exemption provided in this subsection, the term "plugin electric vehicle" means a motor vehicle that is fully or partially powered by batteries that can be recharged from an external source of electricity; is made by a manufacturer primarily for use on public streets, roads, and highways; is acquired for use by the purchaser and not for resale; is rated at no more than 8,500 pounds unloaded gross vehicle weight; has a maximum speed of at least 55 miles per hour; and has a battery capacity of at least 4 kilowatt hours. (e) This subsection expires June 30, Section 2: Description of Data and Sources Hybridcars.com; Plugincars.com/cars; CPI data from National Economic Estimating Conference held December 2015; Florida New Hybrid Vehicle registration data from National Economic Estimating Conference held December 2015; Section 3: Methodology (Include Assumptions and Attach Details) The base of the analysis is founded on the Hybrid Exemption Analysis performed in October, After updating the National Hybrid Vehicles Sold and the CPI data, the national ratios of Plugin Hybrid Electric Vehicles (PHEV) and PlugIn Electric Vehicles (PEV) were found to be 8.2% and 13.8%. This percentage in comparison to previous years shows a drop in the PHEV and an increase in the PEV consistent with sources found which relate a boom in the number of PlugIn Electric Vehicles to the overall population of PlugIn Hybrid Electric Vehicles. Once these National ratios were found, they were applied to the Florida portion of the National Light Vehicles Sold to obtain a Florida portion of PlugIn Hybrid Electric and PlugIn Electric Vehicles. From there, a population of New PHEV & PEV was obtained and their associated prices to determine if the 40,000 cap would be reached by each individual vehicle. Vehicles that would exceed the 40,000 cap were placed in a High End group while the rest remained in a Low End group. Averages for each group were then found including the average Sales Taxes paid on average for both groups. Low Estimate Analysis: The growth rate from the Hybrid analysis is used. New vehicle prices are equal to the average price of the Low End group and grown by CPI. The tradein impact is used to adjust the purchase price of both New and Used Vehicles. The Used Vehicle price is based on the new vehicle price adjusted for depreciation. 708

5 Tax: Sales Tax Issue: Plug in Electric Cars Bill Number(s): HB1123 REVENUE ESTIMATING CONFERENCE Middle Estimate Analysis: The growth rate from the market research of the current state of the PHEV & PEV sales is used. Average Prices in the High and Low End categories are grown by CPI. The tradein impact is used to adjust the purchase price of both New and Used Vehicles in High and Low End categories. The Used Vehicle price of High and Low Categories is based on the new vehicle price adjusted for depreciation. High Estimate Analysis: The growth rate from the market research of the current state of the PHEV & PEV sales is used targeting 3000 new PEV per year. Average Prices in the High and Low End categories are grown by CPI. The tradein impact is used to adjust the purchase price of both New and Used Vehicles in High and Low End categories. The Used Vehicle price of High and Low Categories is based on the new vehicle price adjusted for depreciation. Section 4: Proposed Fiscal Impact High Middle Low Cash Recurring Cash Recurring Cash Recurring (32.3 M) (35.2 M) (22.8 M) (24.9 M) (7.9 M) (8.7 M) (42.8 M) (42.8 M) (30.6 M) (30.6 M) (9.0 M) (9.0 M) (50.3 M) (50.3 M) (36.4 M) (36.4 M) (9.2 M) (9.2 M) (57.9 M) (57.9 M) (42.3 M) (42.3 M) (9.3 M) (9.3 M) (65.4 M) (65.4 M) (48.5 M) (48.5 M) (9.5 M) (9.5 M) List of affected Trust Funds: Sales and Use Tax Group Section 5: Consensus Estimate (Adopted: 03/02/2016): The Conference adopted the middle impact with an adjustment to the number of used cars from 5% to 0%. GR Trust Revenue Sharing Local Half Cent Cash Recurring Cash Recurring Cash Recurring Cash Recurring (19.3) (21.1) (Insignificant) (Insignificant) (0.6) (0.7) (1.9) (2.0) (25.8) (25.8) (Insignificant) (Insignificant) (0.9) (0.9) (2.5) (2.5) (30.8) (30.8) (Insignificant) (Insignificant) (1.0) (1.0) (3.0) (3.0) (35.9) (35.9) (Insignificant) (Insignificant) (1.2) (1.2) (3.4) (3.4) (41.0) (41.0) (Insignificant) (Insignificant) (1.4) (1.4) (3.9) (3.9) Local Option Total Local Total Cash Recurring Cash Recurring Cash Recurring (0.6) (0.6) (3.1) (3.3) (22.4) (24.4) (0.8) (0.8) (4.2) (4.2) (30.0) (30.0) (0.9) (0.9) (4.9) (4.9) (35.7) (35.7) (1.1) (1.1) (5.7) (5.7) (41.6) (41.6) (1.2) (1.2) (6.5) (6.5) (47.5) (47.5) 709

6 Issue: Sales Tax Plug In Electric Vehicle Exemption A B C D E F G H I J Low Estimate Average Price of a Low End Plugin type vehicle 31,627 Growth Rate of Florida Hybrid Sales 5.8% Highend PHEV proportion of Plug in Vehicles Sold 13.5% Low End PHEV Vehicles sold 86.5% Highend PEV proportion of Plug in Vehicles Sold 54.7% Low end PEV Vehicles Sold 45.3% National Hybrids Sold Plug in Hybrids Sold Plug electric vehicles Sold PHEV/Hybrid PEV/Hybrid ,178 1, % 0.5% ,383 4, % 0.6% ,097 48, % 8.7% ,272 55, % 12.5% ,647 42, % 13.8% National Hybrid Vehicles sold Proportion that is High 0% 100% Portion of PHEV/Hybrid Sold in Florida Portion of PEV/Hybrid Sold in Florida High End Portion Low End Portion Propotion of Hybrid Vehicles sold in Florida ,217 30, , ,317 30, , ,650 30, , ,816 30, , ,500 29, , ,270 29, , Assumed Percentage of New Vehicles sold become Used Car Population 0% Assumed percentage of Original Price is used car Value 85% "Tradein" Vehicle Impact 35% Low End Vehicles Used Low End CPI CPI Adjusted Price TradeIn Adjustment Taxable Sales Price TradeIn Adjustment Taxable Sales ,627 20, ,745, ,883 17, ,398 21, ,498, ,538 17, ,209 21, ,505, ,227 18, ,059 22, ,046, ,950 18, ,952 22, ,520, ,709 19, ,891 23, ,876, ,508 19,830 Sales Tax 6% New Used Total Exemption Impact ,144,732 (8,144,732) ,489,881 (8,489,881) ,790,345 (8,790,345) ,882,787 (8,882,787) ,971,247 (8,971,247) ,172,566 (9,172,566) CYtoFY Cash (8,317,306) (8,640,113) (8,836,566) (8,927,017) (9,071,906) March 2,

7 Issue: Sales Tax Plug In Electric Vehicle Exemption A B C D E F G H I J Middle Estimate Yr Growth Rates PHEV/Hybrid PEV/Hybrid % 8.2% 13.8% % 8.2% 13.8% % 8.2% 13.8% % 8.2% 13.8% % 8.2% 13.8% % 8.2% 13.8% High End PHEV 13.5% High End PEV 54.7% Low End PHEV 86.5% Low End PEV 45.3% National Hybrid Sales Florida Hybrids Sales PHEV PEV ,423 56,755 4,647 7, ,553 70,410 5,765 9, ,687 84,065 6,883 11, ,850 97,721 8,002 13, , ,376 9,120 15, , ,031 10,238 17,231 High End PHEV High End PEV Low End PHEV Low End PEV Total High Total Low , , , ,083 7, ,234 8, ,386 9, Low End Average Sales Price 31,627 Used Rate 0% High End Average Sales Price 72,764 Used Price Adjustment 85% Trade in Vehicle Impact on loss 35% State Sales Tax 6% March 2,

8 Issue: Sales Tax Plug In Electric Vehicle Exemption A B C D E F G H I J Low End Vehicle CPI CPI Adjusted Price Trade In Adjustmen Taxable Sales Exemption Impact Total Low End Exemption ,627 20, ,466,043 (9,327,963) (9,327,963) ,398 21, ,575,535 (11,854,532) (11,854,532) ,209 21, ,796,295 (14,507,778) (14,507,778) ,059 22, ,268,515 (17,296,111) (17,296,111) ,952 22, ,165,131 (20,229,908) (20,229,908) ,891 23, ,675,093 (23,320,506) (23,320,506) Used Adjusted Price Trade In AdjustmenTaxable Sales Exemption Impact ,883 17, ,538 17, ,227 18, ,950 18, ,709 19, ,508 19,830 High End Vehicles CPI CPI Adjusted Price TradeIn Adjustmen Taxable Sales Sales Tax Exemption cap Exemption Impact Total High End Exemption Impact ,764 47, ,043,522 2,400 (11,774,784) (11,774,784) ,538 48, ,894,771 2,400 (14,607,821) (14,607,821) ,404 49, ,897,228 2,400 (17,440,859) (17,440,859) ,360 50, ,260,140 2,400 (20,273,897) (20,273,897) ,414 52, ,241,627 2,400 (23,106,935) (23,106,935) ,575 53, ,123,709 2,400 (25,939,973) (25,939,973) Used Adjusted Price TradeIn AdjustmenTaxable Sales Sales Tax Exemption Cap Exemption Impact ,849 40,202 2, ,358 41,182 2, ,943 42,213 2, ,606 43,294 2, ,352 44,429 2, ,189 45,623 2,400 Middle Estimate Exemption Impact Total CYtoFY 2016 (21,102,746) 2017 (26,462,354) (23,782,550) 2018 (31,948,637) (29,205,495) 2019 (37,570,008) (34,759,322) 2020 (43,336,843) (40,453,425) 2021 (49,260,478) (46,298,660) March 2,

9 Issue: Sales Tax Plug In Electric Vehicle Exemption A B C D E F G H I J High Estimate Florida Hybrid Sales Growth rate Average Price of a Low End Plugin type vehicle 31, % Growth Rate of Florida Hybrid Sales 5.80% 13.00% 15.35% Highend PHEV proportion of Plug in Vehicles Sold 13.5% 18.14% Low End PHEV Vehicles sold 86.5% 21.16% 24.26% Highend PEV proportion of Plug in Vehicles Sold 54.7% Low end PEV Vehicles Sold 45.3% National Hybrids Sold Plug in Hybrids Sold Plug electric vehicles Sold PHEV/Hybrid PEV/Hybrid ,178 1, % 0.5% ,383 4, % 0.6% ,097 48, % 8.7% ,272 55, % 12.5% ,647 42, % 13.8% Adjust to Proportion High And Low Purchases: 100% 0% National Hybrid Sales Hybrids Sold in Florida PHEV PEV High End Low End Total ,423 56,755 4,647 7,822 12, ,553 70,410 5,765 9,703 15, ,687 84,065 6,883 11,585 18, ,850 97,721 8,002 13,467 21, , ,376 9,120 15,349 24, , ,031 10,238 17,231 27,469 Low End Average Sales Price 31,627 Used Rate 0% High End Average Sales Price 72,764 Used Price Adjustment 85% Trade In impact 35% Sales Tax 6% High End Vehicles New CPI CPI Adjusted Price Net of Tradein Taxable Sales w/o Exemption Sales Tax Exemption cap Exemption Impact ,764 47, ,725,054 2,400 (29,924,925) ,538 48, ,457,832 2,400 (37,124,925) ,404 49, ,199,220 2,400 (44,324,925) ,360 50,934 1,093,481,009 2,400 (51,524,925) ,414 52,269 1,278,959,195 2,400 (58,724,925) ,575 53,674 1,474,350,517 2,400 (65,924,925) March 2,

10 Issue: Sales Tax Plug In Electric Vehicle Exemption A B C D E F G H I J 207 Total High End Taxable Sales w/o Sales Tax Exemption Vehicle Sales 208 Used Adjusted Used Price Taxable Sales Net of Tradein Exemption Exemption Cap Impact Tax ,849 63,358 64,943 66,606 68,352 70,189 40,202 41,182 42,213 43,294 44,429 45, ,266, ,039, ,619, ,458,858 1,087,115,316 1,253,197,939 2,400 2,400 2,400 2,400 2,400 2,400 (29,924,925) (37,124,925) (44,324,925) (51,524,925) (58,724,925) (65,924,925) 218 Low End Vehicles CPI CPI Adjusted Price Taxable Sales Used PHEV/PEV Taxable Sales , , , , , , , , , , , ,508 Combined Lowend 6% Taxable Sales Exemption Impact Total Sales Tax Collected CYtoFY 2016 (29,924,925) 2017 (37,124,925) (33,524,925) 2018 (44,324,925) (40,724,925) 2019 (51,524,925) (47,924,925) 2020 (58,724,925) (55,124,925) 2021 (65,924,925) (62,324,925) High Middle Low Cash Recurring Cash Recurring Cash Recurring (30.7 M) (33.5 M) (21.8 M) (23.8 M) (7.6 M) (8.3 M) (40.7 M) (40.7 M) (29.2 M) (29.2 M) (8.6 M) (8.6 M) (47.9 M) (47.9 M) (34.8 M) (34.8 M) (8.8 M) (8.8 M) (55.1 M) (55.1 M) (40.5 M) (40.5 M) (8.9 M) (8.9 M) (62.3 M) (62.3 M) (46.3 M) (46.3 M) (9.1 M) (9.1 M) March 2,

11 Tax: Insurance Premium Tax Issue: Workers Comp Policy Dividends Bill Number(s): Proposed Language REVENUE ESTIMATING CONFERENCE X Entire Bill Partial Bill: Sponsor(s): Month/Year Impact Begins: January 2017 Date of Analysis: 2/25/2016 Section 1: Narrative a. Current Law: Premium tax; rate and computation. (1) In addition to the license taxes provided for in this chapter, each insurer shall also annually, and on or before March 1 in each year, except as to wet marine and transportation insurance taxed under s , pay to the Department of Revenue a tax on insurance premiums, premiums for title insurance, or assessments, including membership fees and policy fees and gross deposits received from subscribers to reciprocal or interinsurance agreements, and on annuity premiums or considerations, received during the preceding calendar year, the amounts thereof to be determined as set forth in this section, to wit: (a) An amount equal to 1.75 percent of the gross amount of such receipts on account of life and health insurance policies covering persons resident in this state and on account of all other types of policies and contracts, except annuity policies or contracts taxable under paragraph (b) and bail bond policies or contracts taxable under paragraph (c), covering property, subjects, or risks located, resident, or to be performed in this state, omitting premiums on reinsurance accepted, and less return premiums or assessments, but without deductions: 1. For reinsurance ceded to other insurers; 2. For moneys paid upon surrender of policies or certificates for cash surrender value; 3. For discounts or refunds for direct or prompt payment of premiums or assessments; and 4. On account of dividends of any nature or amount paid and credited or allowed to holders of insurance policies; certificates; or surety, indemnity, reciprocal, or interinsurance contracts or agreements; b. Proposed Change: (a) An amount equal to 1.75 percent of the gross amount of such receipts on account of life and health insurance policies covering persons resident in this state and on account of all other types of policies and contracts, except annuity policies or contracts taxable under paragraph (b) and bail bond policies or contracts taxable under paragraph (c), and workers compensation insurance policies taxable under paragraph (d), covering property, subjects, or risks located, resident, or to be performed in this state, omitting premiums on reinsurance accepted, and less return premiums or assessments, but without deductions: (d) An amount equal to 1.75 percent of the direct written premiums on workers compensation insurance policies covering property, subjects, or risks located, resident, or to be performed in this state, omitting premiums on reinsurance accepted, and less dividends paid and credited or allowed to holders of insurance policies, certificates, or agreements, and less return premiums or assessments. Section 2: Description of Data and Sources CY 2013,2014 Office of Insurance Regulation (OIR) Financial Annual Statement CY 2014 Premium Tax Returns Section 3: Methodology (Include Assumptions and Attach Details) Workers compensation direct written premiums as well as dividends paid and credited to policy holders from the OIR 2013 and 2014 annual financial statement are used. The direct written premium volume is grown at the 3 year average workers compensation growth rate. Dividends are estimated as a percentage of direct written premiums, using a two year average and then the tax rate of 1.75% is applied. The low estimate assumes those insurers at the 65% cit/salary credit cap max would be impacted disproportionately due to reduced taxable premiums (example provided at bottom of spreadsheet). The high estimate assumes those estimated dividend amounts would no longer be taxable. The middle estimate averages the high and low, assuming some mix of insurers would be impacted by the 65% cit/salary credit cap. 715

12 Tax: Insurance Premium Tax Issue: Workers Comp Policy Dividends Bill Number(s): Proposed Language REVENUE ESTIMATING CONFERENCE Section 4: Proposed Fiscal Impact High Middle Low Cash Recurring Cash Recurring Cash Recurring (1.6m) (1.2m) (0.9m) (1.7m) (1.4m) (1.0m) (2.0m) (1.5m) (1.1m) (2.2m) (1.7m) (1.3m) (2.5m) (2.0m) (1.4m) List of affected Trust Funds: Insurance Premium Tax Grouping Section 5: Consensus Estimate (Adopted: 03/02/2016): The Conference adopted the low estimate. The first year cash impact is zero, the rest of the forecast cash impact is equal to the recurring impact. GR Trust Local/Other Total Cash Recurring Cash Recurring Cash Recurring Cash Recurring (0.9) (0.9) (1.0) (1.0) (1.0) (1.0) (1.1) (1.1) (1.1) (1.1) (1.3) (1.3) (1.3) (1.3) (1.4) (1.4) (1.4) (1.4) 716

13 Proposed Language IPT Workers Comp Policy Dividends 1 A B C D E Direct written premiums Dividends Paid and Credited % of premium ,296,680,613 60,116, % ,536,894,470 65,243, % Tax rate applied to dividends 1,141, % Workers' compensation (WC) direct written premiums ,780,556, ,014,460, % ,296,680, % ,536,894, % 3 year average 12.5% Direct written premiums Dividends Tax on Dividends 3 year average WC premium growth ,536,894,470 65,243,319 1,141, ,854,897,829 74,075,011 1,296, % ,212,763,365 83,360,420 1,458, % ,615,487,860 93,809,768 1,641, % ,068,694, ,568,957 1,847, % ,578,711, ,802,177 2,079, % ,152,659, ,694,200 2,339, % ,798,552, ,452,960 2,632, % 100% 79% 57% FY Conversion HIGH MIDDLE LOW ,550,239 1,218, , ,744,564 1,371, , ,963,247 1,543,540 1,123, ,209,343 1,737,025 1,264, ,486,288 1,954,764 1,423,240 Assumptions: Low assumes those insurers at the 65% cit/salary cap max would be impacted disproportionately due to reduced taxable premiums Hypothetical example of an insurer at the 65% CIT/Salary cap Tax Due CIT/Salary Credits Limitation Current Law % Proposed Change % Change in tax due 350 Change in CIT/Salary credit % 717

14 REVENUE ESTIMATING CONFERENCE Tax: Sales And Use Tax Issue: Proposed Language Business Shared Space Bill Number(s): Proposed Language Entire Bill x Partial Bill: Sponsor(s): N/A Month/Year Impact Begins: July 1, 2016 with a one month lag to collections Date of Analysis: March 2, 2016 Section 1: Narrative Current Law: a. Section (7) (kkk) F.S., Provides an exemption for certain manufacturing businesses from sales and use tax on purchases of manufacturing machinery and equipment when the equipment is used at facilities whose primary business activity falls into the manufacturing NAICS codes 31, 32, or 33. The exemption covers parts and accessories when the parts and accessories are purchased prior to the date the machinery and equipment are placed in service. The exemption also covers cement mixing drums and the labor to install the mixing drums. The exemption states that if the purchaser provides the seller with a certificate certifying the purchaser s eligibility for this exemption, then the seller is relieved of the responsibility of collecting the tax on the sale of the equipment. The current exemption expires on April 30, b. Proposed Change: The proposed language modifies the definition of an Eligible Manufacturing Business in Section (7) (kkk) 2 a F.S. to include: The term also includes any business whose primary business activity at the location where the industrial machinery and equipment is located is to provide common space, support personnel and industrial machinery and equipment to a business or businesses whose primary business activity at the location where the industrial machinery and equipment is located is within the industries classified under NAICS codes 31, 32, and 33. Section 2: Description of Data and Sources Industry Research Section 3: Methodology (Include Assumptions and Attach Details) Using industry research we were able to determine a reasonable expense amount for initial purchases made by a representative business incubator. All estimates assume that incumbent incubators spend an additional 25% of the acquisition cost of their current qualified equipment as an expansion of the qualified business. It is assumed that in the high estimate two new business incubators enter in and The Middle estimate assumes 1 new business incubator in and The low estimate assumes no new entrants. The first year cash impact is equal to eleven months of the recurring. Section 4: Proposed Fiscal Impact High Middle Low Cash Recurring Cash Recurring Cash Recurring (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (Insig.) (Insig.) (0.1 M) (0.1 M) (Insig.) (Insig.) (Insig.) (Insig.) (0.2 M) (0.2 M) (0.1 M) (0.1 M) (Insig.) (Insig.) List of affected Trust Funds: Sales and Use Tax Group Section 5: Consensus Estimate (Adopted: 03/02/2016): The Conference adopted a modified high estimate that added a business per year. GR Trust Local/Other Total Cash Recurring Cash Recurring Cash Recurring Cash Recurring (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (0.1) (0.1) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (0.1) (0.1) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (0.1) (0.1) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (0.2) (0.2) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) 718

15 REVENUE ESTIMATING CONFERENCE Tax: Sales And Use Tax Issue: Proposed Language Business Shared Space Bill Number(s): Proposed Language Local Option Total Local Total Cash Recurring Cash Recurring Cash Recurring (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (Insig.) (0.1) (0.1) (Insig.) (Insig.) (Insig.) (Insig.) (0.1) (0.1) (Insig.) (Insig.) (Insig.) (Insig.) (0.1) (0.1) (Insig.) (Insig.) (Insig.) (Insig.) (0.2) (0.2) 719

16 Proposed Language Business Incubators A B C D E F G Representative Business Incubator Spending on Qualifying Machinery and Equipment 829,000 Total Firms Per Year Year High Middle Low Growth Spending per year High Middle Low 25% 25% 25% New Installed base per year Year High Middle Low , , , , , ,000 Expansion Spending Per year Year High Middle Low , , , , , , , , , ,194, , , ,700,907 1,037, ,981 Total Spending Per year Year High Middle Low , , , ,295, , , ,619,141 1,360, , ,023, , , ,529,907 1,866, ,981 High Middle Low Year Cash Recurring Cash Recurring Cash Recurring (0.0 M) (0.0 M) (0.0 M) (0.0 M) (0.0 M) (0.0 M) (0.1 M) (0.1 M) (0.0 M) (0.0 M) (0.0 M) (0.0 M) (0.1 M) (0.1 M) (0.1 M) (0.1 M) (0.0 M) (0.0 M) (0.1 M) (0.1 M) (0.0 M) (0.0 M) (0.0 M) (0.0 M) (0.2 M) (0.2 M) (0.1 M) (0.1 M) (0.0 M) (0.0 M) /02/2016