CODING: Words stricken are deletions; words underlined are additions.
SENATE AMENDMENT
Bill No. CS for SB 1696
Amendment No.
CHAMBER ACTION
Senate House
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11 Senator Klein moved the following amendment:
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13 Senate Amendment (with title amendment)
14 On page 109, between lines 20 and 21,
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16 insert:
17 Section 3. Subsection (1) of section 220.02, Florida
18 Statutes, 1998 Supplement, is amended to read:
19 220.02 Legislative intent.--
20 (1) It is the intent of the Legislature in enacting
21 this code to impose a tax upon all corporations,
22 organizations, associations, and other artificial entities
23 that which derive from this state or from any other
24 jurisdiction permanent and inherent attributes not inherent in
25 or available to natural persons, such as perpetual life,
26 transferable ownership represented by shares or certificates,
27 and limited liability for all owners. It is intended that any
28 limited liability company that is classified as a partnership
29 for federal income tax purposes or is a single-member limited
30 liability company that is disregarded as an entity separate
31 from its owner for federal income tax purposes and that is
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1 formed under chapter 608 or qualified to do business in this
2 state as a foreign limited liability company not be subject to
3 the tax imposed by this code. If a single-member limited
4 liability company is disregarded as an entity separate from
5 its owner for federal income tax purposes, its activities are,
6 for purposes of taxation under chapter 220, treated in the
7 same manner as a sole proprietorship, branch, or division of
8 the owner. It is the intent of the Legislature to subject
9 such corporations and other entities to taxation hereunder for
10 the privilege of conducting business, deriving income, or
11 existing within this state. This code is not intended to tax,
12 and shall not be construed so as to tax, any natural person
13 who engages in a trade, business, or profession in this state
14 under his or her own or any fictitious name, whether
15 individually as a proprietorship or in partnership with
16 others, or as a member or a manager of a limited liability
17 company classified as a partnership for federal income tax
18 purposes; any estate of a decedent or incompetent; or any
19 testamentary trust. However, a corporation or other taxable
20 entity that which is or that which becomes partners with one
21 or more natural persons shall not, merely by reason of being a
22 partner, exclude from its net income subject to tax its
23 respective share of partnership net income. This statement of
24 intent shall be given preeminent consideration in any
25 construction or interpretation of this code in order to avoid
26 any conflict between this code and the mandate in s. 5, Art.
27 VII of the State Constitution that no income tax be levied
28 upon natural persons who are residents and citizens of this
29 state.
30 Section 4. Subsection (2) of section 7 of chapter
31 98-101, Laws of Florida, is amended to read:
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Amendment No.
1 Section 7.
2 (2) This section shall take effect upon this act
3 becoming a law. The provisions of subsection 220.02(11)
4 relating to qualified subchapter S subsidiaries this section
5 are intended to clarify the intent of the Legislature under
6 existing law and are effective with respect to tax years
7 beginning on or after January 1, 1997.
8 Section 5. Paragraph (e) of subsection (1) of section
9 220.03, Florida Statutes, 1998 Supplement, is amended to read:
10 220.03 Definitions.--
11 (1) SPECIFIC TERMS.--When used in this code, and when
12 not otherwise distinctly expressed or manifestly incompatible
13 with the intent thereof, the following terms shall have the
14 following meanings:
15 (e) "Corporation" includes all domestic corporations;
16 foreign corporations qualified to do business in this state or
17 actually doing business in this state; joint-stock companies;
18 limited liability companies, under chapter 608; common-law
19 declarations of trust, under chapter 609; corporations not for
20 profit, under chapter 617; agricultural cooperative marketing
21 associations, under chapter 618; professional service
22 corporations, under chapter 621; foreign unincorporated
23 associations, under chapter 622; private school corporations,
24 under chapter 623; foreign corporations not for profit which
25 are carrying on their activities in this state; and all other
26 organizations, associations, legal entities, and artificial
27 persons which are created by or pursuant to the statutes of
28 this state, the United States, or any other state, territory,
29 possession, or jurisdiction. The term "corporation" does not
30 include a proprietorship proprietorships, even if using a
31 fictitious name; a partnership partnerships of any type, as
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1 such; a limited liability company companies that is are
2 taxable as a partnership partnerships for federal income tax
3 purposes or that has a single member and is disregarded as an
4 entity separate from its owner for federal income tax
5 purposes; a state or public fair fairs or exposition
6 expositions, under chapter 616; an estate estates of a
7 decedent decedents or an incompetent incompetents; a
8 testamentary trust trusts; or a private trust trusts.
9 Section 6. Subsection (2) of section 220.13, Florida
10 Statutes, 1998 Supplement, is amended to read:
11 220.13 "Adjusted federal income" defined.--
12 (2) For purposes of this section, a taxpayer's taxable
13 income for the taxable year means taxable income as defined in
14 s. 63 of the Internal Revenue Code and properly reportable for
15 federal income tax purposes for the taxable year, but subject
16 to the limitations set forth in paragraph (1)(b) with respect
17 to the deductions provided by ss. 172 (relating to net
18 operating losses), 170(d)(2) (relating to excess charitable
19 contributions), 404(a)(1)(D) (relating to excess pension trust
20 contributions), 404(a)(3)(A) and (B) (to the extent relating
21 to excess stock bonus and profit-sharing trust contributions),
22 and 1212 (relating to capital losses) of the Internal Revenue
23 Code, except that, subject to the same limitations, the term:
24 (a) "Taxable income," in the case of a life insurance
25 company subject to the tax imposed by s. 801 of the Internal
26 Revenue Code, means life insurance company taxable income;
27 however, for purposes of this code, the total of any amounts
28 subject to tax under s. 815(a)(2) of the Internal Revenue Code
29 pursuant to s. 801(c) of the Internal Revenue Code shall not
30 exceed, cumulatively, the total of any amounts determined
31 under s. 815(c)(2) of the Internal Revenue Code of 1954, as
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1 amended, from January 1, 1972, to December 31, 1983;
2 (b) "Taxable income," in the case of an insurance
3 company subject to the tax imposed by s. 831(b) of the
4 Internal Revenue Code, means taxable investment income;
5 (c) "Taxable income," in the case of an insurance
6 company subject to the tax imposed by s. 831(a) of the
7 Internal Revenue Code, means insurance company taxable income;
8 (d) "Taxable income," in the case of a regulated
9 investment company subject to the tax imposed by s. 852 of the
10 Internal Revenue Code, means investment company taxable
11 income;
12 (e) "Taxable income," in the case of a real estate
13 investment trust subject to the tax imposed by s. 857 of the
14 Internal Revenue Code, means the income subject to tax,
15 computed as provided in s. 857 of the Internal Revenue Code;
16 (f) "Taxable income," in the case of a corporation
17 which is a member of an affiliated group of corporations
18 filing a consolidated income tax return for the taxable year
19 for federal income tax purposes, means taxable income of such
20 corporation for federal income tax purposes as if such
21 corporation had filed a separate federal income tax return for
22 the taxable year and each preceding taxable year for which it
23 was a member of an affiliated group, unless a consolidated
24 return for the taxpayer and others is required or elected
25 under s. 220.131;
26 (g) "Taxable income," in the case of a cooperative
27 corporation or association, means the taxable income of such
28 organization determined in accordance with the provisions of
29 ss. 1381 through 1388 of the Internal Revenue Code;
30 (h) "Taxable income," in the case of an organization
31 which is exempt from the federal income tax by reason of s.
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1 501(a) of the Internal Revenue Code, means its unrelated
2 business taxable income as determined under s. 512 of the
3 Internal Revenue Code;
4 (i) "Taxable income," in the case of a corporation for
5 which there is in effect for the taxable year an election
6 under s. 1362(a) of the Internal Revenue Code, means the
7 amounts subject to tax under s. 1374 or s. 1375 of the
8 Internal Revenue Code for each taxable year;
9 (j) "Taxable income," in the case of a limited
10 liability company, other than a limited liability company that
11 is classified as a partnership for federal income tax purposes
12 or that has a single member and is disregarded as an entity
13 separate from its owner for federal income tax purposes, as
14 defined in and organized pursuant to chapter 608 or qualified
15 to do business in this state as a foreign limited liability
16 company or other than a similar limited liability company
17 classified as a partnership for federal income tax purposes
18 and created as an artificial entity pursuant to the statutes
19 of the United States or any other state, territory,
20 possession, or jurisdiction, if such limited liability company
21 or similar entity is taxable as a corporation for federal
22 income tax purposes, means taxable income determined as if
23 such limited liability company were required to file or had
24 filed a federal corporate income tax return under the Internal
25 Revenue Code;
26 (k) "Taxable income," in the case of a taxpayer liable
27 for the alternative minimum tax as defined in s. 55 of the
28 Internal Revenue Code, means the alternative minimum taxable
29 income as defined in s. 55(b)(2) of the Internal Revenue Code,
30 less the exemption amount computed under s. 55(d) of the
31 Internal Revenue Code. A taxpayer is not liable for the
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1 alternative minimum tax unless the taxpayer's federal tax
2 return, or related federal consolidated tax return, if
3 included in a consolidated return for federal tax purposes,
4 reflect a liability on the return filed for the alternative
5 minimum tax as defined in s. 55(b)(2) of the Internal Revenue
6 Code;
7 (l) "Taxable income," in the case of a taxpayer whose
8 taxable income is not otherwise defined in this subsection,
9 means the sum of amounts to which a tax rate specified in s.
10 11 of the Internal Revenue Code plus the amount to which a tax
11 rate specified in s. 1201(a)(2) of the Internal Revenue Code
12 are applied for federal income tax purposes.
13 Section 7. Section 608.471, Florida Statutes, 1998
14 Supplement, is amended to read:
15 608.471 Tax exemption on income of certain limited
16 liability companies.--
17 (1) A limited liability company classified as a
18 partnership for federal income tax purposes, or a
19 single-member limited liability company that has a single
20 member and is disregarded as an entity separate from its owner
21 for federal income tax purposes, and organized pursuant to
22 this chapter or qualified to do business in this state as a
23 foreign limited liability company is not an "artificial
24 entity" within the purview of s. 220.02 and is not subject to
25 the tax imposed under chapter 220. If a single-member limited
26 liability company is disregarded as an entity separate from
27 its owner for federal income tax purposes, its activities are,
28 for purposes of taxation under chapter 220, treated in the
29 same manner as a sole proprietorship, branch, or division of
30 the owner.
31 (2) The income of a limited liability company that is
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1 classified as a partnership for federal income tax purposes,
2 or that is a single-member limited liability company that has
3 a single member and is disregarded as an entity separate from
4 its owner for federal income tax purposes, and that is
5 organized pursuant to this chapter or is qualified to do
6 business in this state as a foreign limited liability company
7 shall not be subject to the Florida Income Tax Code and the
8 tax levied pursuant to chapter 220.
9 (3) For purposes of taxation under chapter 220, a
10 limited liability company formed in this state or authorized
11 to transact business in this state as a foreign limited
12 liability company shall be classified as a partnership and any
13 limited liability company that has a single member shall be
14 disregarded as an entity separate from its owner for federal
15 income tax purposes, or, if applicable, unless classified
16 otherwise for federal income tax purposes, in which case the
17 limited liability company shall be classified identically to
18 its classification for federal income tax purposes. For
19 purposes of taxation under chapter 220, a member or an
20 assignee of a member of a limited liability company formed in
21 this state or qualified to do business in this state as a
22 foreign limited liability company shall be treated as a
23 resident or nonresident partner unless classified otherwise
24 for federal income tax purposes, in which case the member or
25 assignee of a member shall have the same status as such member
26 or assignee of a member has for federal income tax purposes.
27 Section 8. Paragraph (d) of subsection (1) of section
28 608.441, Florida Statutes, is amended to read:
29 608.441 Dissolution.--
30 (1) A limited liability company organized under this
31 chapter shall be dissolved upon the occurrence of any of the
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1 following events:
2 (d) When a limited liability company has no fewer than
3 two members.
4 Section 9. Paragraph (a) of subsection (1) of section
5 199.023, Florida Statutes, 1998 Supplement, is amended to
6 read:
7 199.023 Definitions.--As used in this chapter:
8 (1) "Intangible personal property" means all personal
9 property which is not in itself intrinsically valuable, but
10 which derives its chief value from that which it represents,
11 including, but not limited to, the following:
12 (a) All stocks or shares of incorporated or
13 unincorporated companies, business trusts, and mutual funds.
14 Any interest as a member in a limited liability company that
15 is classified as a partnership for federal income tax purposes
16 or that is a single-member limited liability company that is
17 disregarded as an entity separate from its owner for federal
18 income tax purposes.
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20 (Redesignate subsequent sections.)
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23 ================ T I T L E A M E N D M E N T ===============
24 And the title is amended as follows:
25 On page 2, line 16, after the semicolon
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27 insert:
28 amending s. 220.02, F.S.; declaring legislative
29 intent that certain companies are exempt from
30 the corporate income tax; providing for the tax
31 treatment of activities of certain
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1 single-member limited liability companies;
2 revising legislative intent with respect to the
3 amendment of s. 220.02, F.S., by chapter
4 98-101, Laws of Florida; amending s. 220.03,
5 F.S.; redefining the term "corporation" for
6 purposes of the corporate income tax; amending
7 s. 220.13, F.S.; redefining the term "taxable
8 income" of limited liability companies for
9 purposes of determining "adjusted federal
10 income"; amending s. 608.471, F.S.; exempting
11 certain limited liability companies from income
12 taxation; providing for the tax treatment of
13 activities of certain single-member limited
14 liability companies; amending s. 608.441, F.S.;
15 revising conditions under which a limited
16 liability company will be dissolved; amending
17 s. 199.023, F.S.; redefining the term
18 "intangible personal property" for purposes of
19 the taxation thereof;
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