Friday, May 30, 2014

Sales & Use Tax Exemption available to Industrial Machinery and Equipment

Sales and Use Tax Exemption for
Purchases of Industrial Machinery and Equipment

Effective April 30, 2014, an exemption from sales and use tax is available for purchases of industrial machinery and equipment used at a fixed location in Florida by an eligible manufacturing business that will manufacture, process, compound, or produce for sale items of tangible personal property. The exemption also includes parts and accessories for the industrial machinery and equipment if they are purchased before the date the machinery and equipment are placed in service.
An "eligible manufacturing business" means any business whose primary business activity at the location where the industrial machinery and equipment are located is within the industries classified under manufacturing NAICS (North American Industry Classification System) codes 31, 32, and 33 published in 2007 by the Office of Management and Budget, Executive Office of the President. The primary business activity of an eligible business is that activity which represents more than 50 percent of the activities conducted at the location where the industrial machinery and equipment are located.
Examples of types of manufacturing establishments represented by the applicable NAICS codes include, but are not limited to, food, apparel, wood, paper, printing, chemical, pharmaceutical, plastic, rubber, metal, transportation, and furniture. A search of qualifying establishments by keyword or NAICS code can be conducted via the internet at
The selling dealer (vendor) should obtain a signed certificate from the purchaser certifying the purchaser's entitlement to tax exemption under the exemption statute. The signed certificate will relieve the selling dealer of any potential tax liability on nonqualifying purchases. Below is a suggested certificate the selling dealer can have the purchaser complete to document the exempt nature of the sales transaction.
Qualifying purchases made after the effective date of the exemption are eligible for refund of any tax paid under the refund provisions provided by section 215.26, Florida Statutes (F.S.), Repayment of Funds Paid into State Treasury Through Error, and Rule 12A-1.014, Florida Administrative Code (F.A.C.), Refunds and Credits for Sales Tax Erroneously Paid.
The exemption is scheduled for repeal effective April 30, 2017.
This exemption does not replace the exemption provided for qualifying purchases by a new or expanding business under section 212.08(5)(b) and (d), F.S. Each of these exemptions remains in effect under current statute without change. See also Rule 12A-1.096, F.A.C.
References:  Section 6, Chapter 2013-39, Laws of Florida; and Section 212.08(7)(kkk), Florida Statutes

Thursday, May 22, 2014

S Corp Revocation

Some times the S corp election just doesn't work out!  Here are the steps to end the election:
Shareholder revocation.
The S corporation election may be revoked with the consent of shareholders holding more than 50%  of the shares of stock of the corporation. A revocation made on or before the 15th day of the third month of the taxable year is effective as of the first day of the taxable year (March 15 for a calendar year corporation).
Revocation made after the 15th day of the third month of the tax year is effective for the following taxable year.
Revocation can be made for a prospective date which is on or after the date the revocation is made. [IRC §1362(d)(1)]
Corporation statement. The corporation files a statement of revocation, signed by an officer who is authorized to sign Form 1120S, with the IRS Service Center where the original election was filed.
Include the following information:
• A statement that the corporation is revoking its S corporation election under IRC Section 1362(a).
• The corporation’s name, address, and EIN.
• The number of shares of outstanding stock.
• The effective date of the revocation.
Shareholder statement. A statement signed by the shareholders, under penalty of perjury, which includes:
• The name, address, and EIN of the consenting shareholder.
• The number of shares owned by the shareholder.
• The date the shareholder acquired the stock.
• The shareholder’s tax year end.
From the CFS Tax Corresponder program:   
Statement to Revoke Sub chapter S Election (IRC Section 1362(d))
To:  Internal Revenue Service
Re:  [Client: Taxpayer & Spouse name(s)/Company Name]
[Client: Street address, Apt/Ste/PMB #, plus line 2 (if any)]
    [Client: City, State  Zip]
    ID: [Client: Taxpayer's SSN/Company FEIN]
The above mentioned company hereby revokes its election under IRC Section 1362(a) in accordance with IRC Code Section 1362(d).  As of  , there are shares of issued and outstanding shares of stock in [Client: Taxpayer & Spouse name(s)/Company Name].  Attached are signed consents by all shareholders holding more than one-half of the issued and outstanding stock in [Client: Taxpayer & Spouse name(s)/Company Name].
[Client: Taxpayer & Spouse name(s)/Company Name]
By: ____________________________
Date: _____________________
Attachment of Shareholders to Statement of Consent to Subchapter S Revocation
The undersigned shareholders in accordance with IRC Section 1362(d) hereby consent to the revocation by the [Client: Taxpayer & Spouse name(s)/Company Name], ID# [Client: Taxpayer's SSN/Company FEIN] of its election under IRC Section 1362(a).  Such revocation is effective .
By:  _____________________________________    ___________________
By:  _____________________________________    ___________________
By:  _____________________________________    ___________________
At the time of this revocation, the issued and outstanding shares of the  [Client: Taxpayer & Spouse name(s)/Company Name] are held as follows:

Monday, May 19, 2014

Summer Time Jobs for the kids, and the tax effects of those jobs....

Tax Information for Students Who Take a Summer Job
Many students take a job in the summer after school lets out. If it’s your first job it gives you a chance to learn about the working world. That includes taxes we pay to support the place where we live, our state and our nation. Here are eight things that students who take a summer job should know about taxes:
1. Don’t be surprised when your employer withholds taxes from your paychecks. That’s how you pay your taxes when you’re an employee. If you’re self-employed, you may have to pay estimated taxes directly to the IRS on certain dates during the year. This is how our pay-as-you-go tax system works.
2. As a new employee, you’ll need to fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use it to figure how much federal income tax to withhold from your pay. The IRS Withholding Calculator tool on can help you fill out the form.
3. Keep in mind that all tip income is taxable. If you get tips, you must keep a daily log so you can report them. You must report $20 or more in cash tips in any one month to your employer. And you must report all of your yearly tips on your tax return.
4. Money you earn doing work for others is taxable. Some work you do may count as self-employment. This can include jobs like baby-sitting and lawn mowing. Keep good records of expenses related to your work. You may be able to deduct (subtract) those costs from your income on your tax return. A deduction may help lower your taxes.
5. If you’re in ROTC, your active duty pay, such as pay you get for summer camp, is taxable. A subsistence allowance you get while in advanced training isn’t taxable.
6. You may not earn enough from your summer job to owe income tax. But your employer usually must withhold Social Security and Medicare taxes from your pay. If you’re self-employed, you may have to pay them yourself. They count toward your coverage under the Social Security system.
7. If you’re a newspaper carrier or distributor, special rules apply. If you meet certain conditions, you’re considered self-employed. If you don’t meet those conditions and are under age 18, you are usually exempt from Social Security and Medicare taxes.
8. You may not earn enough money from your summer job to be required to file a tax return. Even if that’s true, you may still want to file. For example, if your employer withheld income tax from your pay, you’ll have to file a return to get your taxes refunded