FLORIDA SAID SALES TAXES DO NOT HAVE TO BE PAID on equipment for a gas-fired power plant.

A private contractor is building the plant for a municipal utility. The state exempts from sales taxes equipment used to produce electricity or steam, but there are two conditions. First, the boiler fuel must not be a residual oil. Second, the electricity or steam must be “primarily used in manufacturing . . . tangible personal property for sale.” The state appears to have decided in this case that steam will be used to manufacture electricity — an item of “tangible personal property.” The Department of Revenue said, “It is the established position of the Department that the electrical energy is the tangible personal property that is produced for sale.” The advice is in a technical assistance advisement issued in December