Extending the Manufacturing Machinery & Equipment Sales Tax Exemption
Florida’s manufacturing sector is vital to the state’s economy, delivering high wages, a stable income stream, and production diversity that is crucial to the stability and growth of Florida’s economy.
Given the diverse economic benefits provided by manufacturing, it is in the state’s best interest to continue to foster growth in this sector, and Florida lags behind compared to other Southern states. But while most Southern states provide broad tax exemptions for manufacturing equipment, Florida’s most important exemption to encourage capital investment in manufacturing will sunset in April 2017. The analysis in this report demonstrates that extending the exemption could provide a significant economic benefit to the state, and its manufacturing industry.
The Florida manufacturing sector is modest in size but generates significant positive impacts on the state economy. Manufacturing provides production diversification, high wages, stable personal incomes, and strong multiplier effects throughout the Florida economy, and is one of the state’s Qualified Target Industries, a collection of industries that the state offers targeted incentives to in an effort to grow its economy. Additionally, advanced manufacturing, an emerging subset of the industry, has the potential to make Florida a national high-tech hub.