Could a low-income housing project in a designated brownfield area receive a refund of sales tax paid on building materials?

Plain-English summary

The Florida Department of Revenue concluded that a developer's low-income housing project in a designated brownfield area could qualify for a refund of sales tax paid on building materials.

Eligibility was conditional. All housing units had to be designated for people in the income or eligibility categories named in sections 420.0004 and 159.603. The owner also had to submit a refund application within six months after the local building-code inspector deemed the project substantially complete.

The application had to include the project and permit information, substantial-completion certification, sworn cost and tax details from the contractor or owner, and invoices proving sales tax paid on materials used in the project.

What this means for you

Affordable-housing developers

A brownfield location alone was not enough; every unit had to satisfy the stated affordable-housing designation condition.

Contractors and accountants

Maintain invoices and the sworn building-material schedule needed for the refund application.

Common questions

Q: Did the project qualify automatically?
A: No. The ruling made eligibility dependent on the unit designations, timely filing, and required documentation.

Q: When was the refund application due?
A: Within six months after substantial completion was certified by the local building-code inspector.

Q: Was the exemption received at purchase?
A: No. The statute described it as a refund to the owner of tax previously paid.

Citations and references

• Fla. Stat. §§ 212.08(5)(o), 420.0004(9), (11), (12), and (17), 159.603(7), and 213.22

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 15A-002

Original ruling text

Executive
Director
Marshall Stranburg

QUESTION: DOES THE PROJECT ADDRESSED IN THE TAA MEET THE REFUND
ELIGIBILITY REQUIREMENTS OF PARAGRAPH 212.08(5)(O), F.S.?
ANSWER: BASED ON THE INFORMATION PROVIDED IN THE TAA REQUEST, THE
PROJECT ADDRESSED IN THE TAA MEETS THE REFUND ELIGIBILITY
REQUIREMENTS IF ALL UNITS IN THE CONSTRUCTION PROJECT MEET THE
DESIGNATION REQUIREMENTS AND THE TAXPAYER FILES A TIMELY REFUND
APPLICATION AND PROVIDES THE REQUIRED DOCUMENTATION.

January 28, 2015

Re:

Technical Assistance Advisement 15A-002
Sales and Use Tax
Building Materials in Redevelopment Projects
Sections: 212.08(5)(o), F.S.
XXXX(hereinafter “Taxpayer”)
XXXX (hereinafter “Project”)

Dear XXXX:
This is in response to your request dated XXXX, for a Technical Assistance Advisement (TAA)
pursuant to section 213.22, Florida Statutes (F.S.), and Rule Chapter 12-11, Florida
Administrative Code (F.A.C.), regarding the Building Materials in Redevelopment Projects sales
and use tax refund. An examination of your letter has established that you have complied with
the statutory and regulatory requirements for issuance of a TAA. Therefore, the Florida
Department of Revenue (hereinafter “the Department”) is hereby granting your request for a
TAA.
ISSUE
Whether the Project is construction in a designated brownfield area of affordable housing for
persons described in subsections 420.0004(9), (11), (12), or (17) or in s. 159.603(7), F.S., which
is eligible for the sales tax refund under section 212.08(5)(o), F.S.?

Child Support Enforcement – Ann Coffin, Director  General Tax Administration – Maria Johnson, Director
Property Tax Oversight – Howard Moyes, Interim Director  Information Services – Damu Kuttikrishnan, Director

www.myflorida.com/dor
Tallahassee, Florida 32399-0100

Technical Assistance Advisement
Page 2

FACTS PROVIDED BY THE TAXPAYER
The Taxpayer develops real property in Florida. The Taxpayer is the owner of property on
which it intends to construct the Project. The Project is in a designated brownfield area on which
Taxpayer is in the process of constructing low-income housing. Taxpayer received building
permits for the Project on XXXX. Taxpayer will apply for a refund of sales tax paid on the
building materials used in the construction project under the provisions of section 212.08(5)(o),
F.S.
LEGAL AUTHORITY
Section 212.08(5)(o), F.S., states:
Building materials in redevelopment projects.—

1. As used in this paragraph, the term:
   a. “Building materials” means tangible personal property that becomes a component
   part of a housing project or a mixed-use project.
   b. “Housing project” means the conversion of an existing manufacturing or industrial
   building to a housing unit which is in an urban high-crime area, an enterprise zone, an
   empowerment zone, a Front Porch Community, a designated brownfield site for which a
   rehabilitation agreement with the Department of Environmental Protection or a local
   government delegated by the Department of Environmental Protection has been executed
   under s. 376.80 and any abutting real property parcel within a brownfield area, or an
   urban infill area; and in which the developer agrees to set aside at least 20 percent of the
   housing units in the project for low-income and moderate-income persons or the
   construction in a designated brownfield area of affordable housing for persons
   described in s. 420.0004(9), (11), (12), or (17) or in s. 159.603(7).
   c. “Mixed-use project” means the conversion of an existing manufacturing or industrial
   building to mixed-use units that include artists’ studios, art and entertainment services, or
   other compatible uses. A mixed-use project must be located in an urban high-crime area,
   an enterprise zone, an empowerment zone, a Front Porch Community, a designated
   brownfield site for which a rehabilitation agreement with the Department of
   Environmental Protection or a local government delegated by the Department of
   Environmental Protection has been executed under s. 376.80 and any abutting real
   property parcel within a brownfield area, or an urban infill area; and the developer must
   agree to set aside at least 20 percent of the square footage of the project for low-income
   and moderate-income housing.
   d. “Substantially completed” has the same meaning as provided in s. 192.042(1).
2. Building materials used in the construction of a housing project or mixed-use
   project are exempt from the tax imposed by this chapter upon an affirmative
   showing to the satisfaction of the department that the requirements of this
   paragraph have been met. This exemption inures to the owner through a refund of
   previously paid taxes. To receive this refund, the owner must file an application
   under oath with the department which includes:

Technical Assistance Advisement
Page 3

a. The name and address of the owner.
b. The address and assessment roll parcel number of the project for which a
refund is sought.
c. A copy of the building permit issued for the project.
d. A certification by the local building code inspector that the project is
substantially completed.
e. A sworn statement, under penalty of perjury, from the general contractor
licensed in this state with whom the owner contracted to construct the project,
which statement lists the building materials used in the construction of the project
and the actual cost thereof, and the amount of sales tax paid on these materials. If a
general contractor was not used, the owner shall provide this information in a sworn
statement, under penalty of perjury. Copies of invoices evidencing payment of sales
tax must be attached to the sworn statement.

3. An application for a refund under this paragraph must be submitted to the
   department within 6 months after the date the project is deemed to be substantially
   completed by the local building code inspector. Within 30 working days after receipt
   of the application, the department shall determine if it meets the requirements of this
   paragraph. A refund approved pursuant to this paragraph shall be made within 30 days
   after formal approval of the application by the department.
4. The department shall establish by rule an application form and criteria for
   establishing eligibility for exemption under this paragraph.
5. The exemption shall apply to purchases of materials on or after July 1, 2000.
   (Emphasis Supplied)
   DISCUSSION AND ANALYSIS
   Section 212.08(5)(o), F.S., provides several requirements and a few different situations under
   which a refund of sales tax may be made. One of the alternatives provided in the definition of a
   housing project is for the construction in a designated brownfield area of affordable housing for
   extremely-low-income persons, low-income persons, moderate-income persons, and very-lowincome persons, as defined in section 420.0004, F.S., or eligible persons, as defined in section
   159.603, F.S. 1
   The Taxpayer states that its Project is in a designated brownfield area. The Taxpayer also states
   that the Project is construction of low income housing. If all of the housing units are designated
   for persons described in s. 420.0004(9), (11), (12), or (17) or in s. 159.603(7), F.S., the Project
   will meet the definition of a “housing project” and be eligible for the sales tax refund under
   section 212.08(5)(o), F.S.

1

Please note that even though the definition of a housing project was amended in 2013, the portion of the definition
relating to the refund for new construction in a designated brownfield area of affordable housing for persons described in s.
420.0004(9), (11), (12), or (17) or in s. 159.603(7), F.S., was not changed.

Technical Assistance Advisement
Page 4

CONCLUSION
Based on the discussion above, assuming all of the housing units are designated for persons
described in s. 420.0004(9), (11), (12), or (17) or in s. 159.603(7), F.S., and a timely application
for refund is made with paperwork documenting the building materials purchased, and that the
building materials were used in the Project, the Project is eligible for the sales tax refund under
section 212.08(5)(o), F.S.
This response constitutes a Technical Assistance Advisement under s. 213.22, F.S., which is
binding on the Department only under the facts and circumstances described in the request for
this advice as specified in s. 213.22, F.S. Our response is predicated on those facts and the
specific situation summarized above. You are advised that subsequent statutory or
administrative rule changes, or judicial interpretations of the statutes or rules, upon which this
advice is based, may subject similar future transactions to a different treatment than expressed in
this response.
You are further advised that this response, your request and related documents are public records
under chapter 119, F.S., which are subject to disclosure to the public under the conditions of s.
213.22, F.S. Your name, address, and any other details, which might lead to identification of the
taxpayer, must be deleted before disclosure. In an effort to protect the confidentiality of such
information, we request you provide the undersigned with an edited copy of your request for
Technical Assistance Advisement, backup material and response within fifteen days of the date
of this advisement.
Sincerely,

Suzanne C. Paul
Tax Law Specialist
Technical Assistance and Dispute Resolution
(850) 717-6794
Record ID: 183907