Manufacturing serves as a major driver of economic growth and employment in Southeast Volusia. Our coalition aims to support local manufacturing companies and help create a thriving business climate. One key way we can assist manufacturers is to raise awareness of federal and state tax incentives available to them.
Florida provides attractive tax incentives to help new and expanding manufacturers set up or grow operations in the state. These exemptions are designed to contribute to a healthy climate for business and industry.
One of the biggest expenses for any manufacturing company is investing in machinery and equipment. Florida offers a number of purchase exemptions to lower this cost burden:
Manufacturers can save on the sales and use tax (6%) when purchasing equipment used to produce goods for resale. This applies to a range of machinery and equipment, from 3D printers to CNC machines to robotics.
Another 6% can be exempted from the sale and use tax on electricity consumed in the manufacturing process. This helps lower a significant recurring overhead cost.
No sales tax is due on certain boiler fuels like natural gas that are used in manufacturing activities.
These exemptions allow manufacturers to redirect savings to other critical areas like hiring employees, expanding facilities, upgrading technology and more.
Innovation is key for manufacturers to keep pace with customer needs and emerging technologies. Florida supports this through R&D tax exemptions:
Manufacturing equipment and machinery used predominantly for research and development is exempt from almost all sales tax. This helps companies on the cutting edge invest in technologies that may not have an immediate commercial application.
There is also a sales tax exemption on the labor portion of research and development expenditures. This applies to wages for employees engaged in R&D.
Aircraft maintenance, repair, and overhaul (MRO) is a major industry in Florida. The state offers sales tax exemptions on:
Parts and labor used in repairing and maintaining qualified aircraft
Services and leases related to aircraft repair and maintenance
Sale or lease of qualified aircraft predominantly used in air commerce
These incentives make Florida an attractive hub for aviation and aerospace companies.
In addition to state tax breaks, federal programs provide incentives for investments in new equipment and employee development.
Section 179 allows manufacturers to fully deduct the purchase price of eligible equipment in the current tax year rather than depreciating it over many years. This applies to new and used equipment up to $1 million. As manufacturers look to implement automation and smart manufacturing practices, the 179 deduction enables them to offset these large capital expenditures.
The WOTC provides a federal tax credit of up to $9,600 per employee hired from eligible target groups like veterans, long-term unemployed, ex-felons, and those on government assistance. For manufacturers looking to expand their workforce with diversity and inclusiveness initiatives, WOTC helps offset costs after hiring.
Every dollar saved on machinery purchases, R&D programs, utility bills, and hiring employees allows manufacturers to instead redeploy those funds to drive growth through new hires, facilities, technologies, and more.
As the Southeast Volusia Manufacturing and Technology Coalition, we strive to educate local manufacturers on federal and state programs available to them. With the right incentives and business climate, Volusia County can foster the next generation of manufacturing leaders and become a hub for technology, innovation, and production.