General Information
Ad Valorem property tax exemptions can be granted to new and expanding businesses only after the voters of a city and/or county vote in a referendum to allow
that city or county to grant exemptions . Section 196.1995, Florida Statutes, requires that a referendum be held if: (1) The Board of County Commissioners or
governing authority of a municipality (city or county commission) votes to hold such a referendum, or (2) if the county or city commission receives a petition
signed by ten percent of the registered voters of the county or city. This referendum question can then be placed before the voters of a city or county at any
regular election or special election called for voting on the tax incentive referendum or for any other purpose.
If the voters authorize exemptions, a company must first meet the definitions of a new or expanding business as stated in s. 196.012 (15) and (16), F.S.
The expansion must be on the same or a colocated site of the business current operations.
If a business meets one of the above definitions as a new or expanding business, it must then file this application with the county or city commission or both.
After the city or county commission receives this application, it must submit the application to the county property appraiser for review. After the property
appraiser makes the report as to the fiscal impact of granting the exemption, the county or city commission shall then adopt an ordinance in the usual manner-
granting the exemption, if it chooses to do so.
A business cannot receive exemption from school taxes or water management district taxes. Also a business must pay taxes that were voted by the voters of a
city or county to pay for bond issues and other special tax levies authorized by the voters of a city or county.
The exemption can only be for the improvements to the real property and for tangible personal property. The land on which the new or expanding business is to
be located will still be taxed and taxes must be paid on it.
The action taken by a city or county commission can only exempt the taxes paid to that governmental body. A city can only exempt its taxes; a county can only
exempt its taxes. All other taxes must be paid.
Statutory Definitions
Section 196.011 Annual application required
for exemption .—
(1)(a) Every person or organization who, on
January 1, has the legal title to real or personal
property, except inventory, which is entitled by law
to exemption from taxation as a result of its
ownership and use shall, on or before March 1 of
each year, file an application for exemption with
the county property appraiser, listing and
describing the property for which exemption is
claimed and certifying its ownership and use. The
Department of Revenue shall prescribe the forms
upon which the application is made. Failure to
make application, when required, on or before
March 1 of any year shall constitute a waiver of
the exemption privilege for that year, except as
provided in subsection (7) or subsection (8).
Section 196.012(15) and (16), Florida Statutes
(15) “New business” means:
(a)1. A business establishing 10 or more jobs
to employ 10 or more full-time employees in this
state, which manufactures, processes, compounds,
fabricates, or produces for sale items of tangible
personal property at a fixed location and which
comprises an industrial or manufacturing plant;
2. A business establishing 25 or more jobs to
employ 25 or more full-time employees in this
state, the sales factor of which, as defined by
s.220.15(5), for the facility with respect to which it
requests an economic development ad valorem
tax exemption is less than 0.50 for each year the
exemption is claimed; or
3. An office space in this state owned and
used by a corporation newly domiciled in this state;
provided such office space houses 50 or more
full-time employees of such corporation; provided
that such business or office first begins operation on
a site clearly separate from any other commercial or
industrial operation owned by the same business.
(b) Any business located in an enterprise
zone that first begins operation on a site clearly
separate from any other commercial or industrial
operation owned by the same business.
(c) A new business that is situated on property
annexed into a municipality and that, at the time of
annexation, is receiving an economic
development ad valorem tax exemption from the
county under s. 196.1995.
(16) “Expansion of an existing business” means:
(a)1. A business establishing 10 or more jobs
to employ 10 or more full-time employees in this
state, which manufactures, processes, compounds,
fabricates, or produces for sale items of tangible
2. A business establishing 25 or more jobs to
employ 25 or more full-time employees in this state,
the sales factor of which, as defined by s. 220.15(5),
for the facility with respect to which it requests an
economic development ad valorem tax exemption is
less than 0.50 for each year the exemption is claimed;
provided that such business increases operation on
a site colocated with a commercial or industrial
operation owned by the same business, resulting in
a net increase in employment of not less than 10
percent or an increase
in productive output of not less
than 10 percent.
(b) Any business located in an enterprise zone
that increases operations on a site colocated with a
commercial or industrial operation owned by the
same business.
Section 196.1995 Economic development ad
valorem tax exemption.-
(6) With respect to a new business as defined
by s. 196.012(15)(c), the municipality annexing the
property on which the business is situated may
grant an economic development ad valorem tax
exemption under this section to that business for a
period that will expire upon the expiration of the
exemption granted by the county. If the county renews
the exemption under subsection (7), the municipality
may also extend its exemption. A municipal
economic development ad valorem tax exemption
granted under this subsection may not extend
beyond the duration of the county exemption.
Section 220.15(5), Florida Statutes.
(5) The sales factor is a fraction the numerator
of which is the total sales of the taxpayer in this state
during the taxable year or period and the denom-
inator of which is the total sales of the taxpayer
everywhere during the taxable year or period.
(a) As used in this subsection, the term “sales”
means all gross receipts of the taxpayer except
interest, dividends, rents, royalties, and gross
receipts from the sale, exchange, maturity, redemp-
tion, or other disposition of securities. However:
1. Rental income is included in the term if a
significant portion of the taxpayer’s business consists of
leasing or renting real or tangible personal property; and
2. Royalty income is included in the term if a
significant portion of the taxpayer’s business consists of
dealing in or with the production, exploration, or
development of minerals.
(b)1. Sales of tangible personal property occur
in this state if the property is delivered or shipped to
a purchaser within this state, regardless of the f.o.b.
point, other conditions of the sale, or ultimate
destination of the property, unless shipment is made
via a common or contract carrier.
2. When citrus fruit is delivered by a
cooperative for a grower-member, by a grower-
member to a cooperative, or by a grower-
participant to a Florida processor, the sales factor
for the growers for such citrus fruit delivered to
such processor shall be the same as the sales
factor for the most recent taxable year of that
processor. That sales factor, expressed only as a
percentage and not in terms of the dollar volume
of sales, so as to protect the confidentiality of the
sales of the processor, shall be furnished on the
request of such a grower promptly after it has
been determined for that taxable year.
3. Reimbursement of expenses under an
agency contract between a cooperative, a grower-
member of a cooperative, or a grower and a
processor is not a sale within this state.
(c) Sales of a financial organization, including,
but not limited to, banking and savings institutions,
investment companies, real estate investment
trust, and brokerage companies, occur in this
state if derived from:
1. Fees, commissions, or other compensation
for financial services rendered within this state;
2. Gross profits from trading in stocks, bonds, or
other securities managed within this state;
3. Interest received within this state, other
than interest from loans secured by mortgages,
deeds of trust, or other liens upon real or tangible
personal property located in this state, and
dividends received within this state;
4. Interest charged to customers at places of
business maintained within this state for carrying
debit balances of margin accounts, without deduction
of any costs incurred in carrying such accounts;
5. Interest, fees, commissions, or other charges
or gains from loans secured by mortgages, deeds of
trust or other liens upon real or tangible personal
property located in this state or from installment sale
agreements originally executed by a taxpayer or the
taxpayer’s agent to sell real or tangible personal
property located in this state;
6. Rents from real or tangible personal
property located in this state; or
7. Any other gross income, including other
interest, resulting from the operation as a financial
organization within this state.
In computing the amounts under this
paragraph, any amount received by a member of
an affiliated group (determined under s. 1504(a) of
the Internal Revenue code, but without reference
to whether any such corporation is an “includable
corporation” under s. 1504(b) of the Internal
Revenue code) from another member of such
group shall be included only to the extent such
amount exceeds expenses of the recipient directly
related thereto.
personal property at a fixed location and which
comprises an industrial or manufacturing plant; or
