Sales Tax State Activity Update - August 2004

Pollution Control Equipment is Exempt in Florida

The Florida Department of Revenue recently published a technical assistance advisement indicating a manufacturer’s replacement pollution control equipment is properly exempt from sales and use tax.

A Florida taxpayer operates a pulp and paper manufacturing plant under a valid Industrial Wastewater Treatment Facility Permit issued by the Florida Department of Revenue (“DEP”). The permit also serves as the federal National Pollutant Discharge Elimination System (“NPDES”) permit, which requires the plant to operate under the rules and regulations set forth by the federal Environmental Protection Agency (“EPA”) enforceable by the DEP. In order to improve pollution control methods that currently only capture, recycle or destroy pollutants formed in the process, the NPDES established rules to reduce the generation or initial creation of pollutants in the manufacturing process itself. The taxpayer purchased and installed the replacement pollution control equipment pursuant to the permit issued by the DEP as required by the NPDES.

Florida statutes exempt any facility, device, fixture, equipment, machinery, specialty chemical, or bioaugmentation product used primarily for the control or abatement of pollution or contaminants in manufacturing, processing, compounding, or producing for sale items of tangible personal property at a fixed location, or any structure, machinery, or equipment installed in the reconstruction or replacement of such facility, device, fixture, equipment, or machinery. To qualify, such facility, device, fixture, equipment, structure, specialty chemical, or bioaugmentation product must be used, installed, or constructed to meet a law implemented by, or a condition of a permit issued by, the Department of Environmental Protection; however, such exemption shall not be allowed unless the purchaser signs a certificate stating that the facility, device, fixture, equipment, structure, specialty chemical, or bioaugmentation product to be exempted is required to meet such law or condition. In this instance, the taxpayer’s purchase of the pollution control equipment satisfied the requirements set forth in the Florida statutes and is properly exempt from sales tax.

(Florida Department of Revenue, Technical Assistance Advisement 04A-036, 06/09/04) 08/04

The full text may be accessed at: http://taxlaw.state.fl.us/search_out.asp?r=04A036+%7BVIC+%23%5B% 7D&filename=SUT%5FTAA1%2EASK&orireg=%2A04A%2D036&banner= 2000%2DTo+Date+Technical+Assistance+Advisements%0D%0A&files=SUT

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