Florida Senate - 2008 SB 2766
By Senator Deutch
30-03819A-08 20082766__
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A bill to be entitled
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An act relating to the corporate income tax; providing
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legislative findings and intent; amending s. 220.03, F.S.;
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revising definitions; providing additional definitions;
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amending s. 220.13, F.S.; revising the definition of the
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term "adjusted federal income"; prohibiting certain
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deductibles for certain water's edge group members;
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providing an additional subtraction from adjusted federal
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income; creating s. 220.136, F.S.; defining the term
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"water's edge group reporting method"; requiring water's
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edge group members to use a certain group income reporting
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method; providing methodology requirements; providing
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return filing requirements; requiring domestic disclosure
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spreadsheet filing requirements; providing a definition;
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authorizing the Department of Revenue to adopt rules and
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220.64, F.S.; replacing or deleting provisions relating to
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consolidated returns for affiliated groups to conform to
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water's edge group requirements; amending s. 376.30781,
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F.S.; conforming a cross-reference; providing for
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transitional rules; repealing s. 220.131, F.S., relating
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to consolidated returns for affiliated groups; providing
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appropriations; providing an effective date.
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Be It Enacted by the Legislature of the State of Florida:
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Section 1. Legislative finding; intent.--The Legislature
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finds that a separate accounting system for corporations is
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sometimes inadequate to accurately measure the income of
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multinational and multistate corporations doing business in this
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state and this may create tax disadvantages for corporations in
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this state in competition with those multinational and multistate
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corporations. Corporate business is increasingly conducted
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through groups of commonly owned corporations, it is the intent
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of the Legislature to adopt a combined system of income tax
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reporting for corporations to more accurately measure the
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business activities of corporations.
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Section 2. Paragraphs (y) and (z) of subsection (1) of
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section 220.03, Florida Statutes, are amended, and paragraphs
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(gg) and (hh) are added to that subsection, to read:
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220.03 Definitions.--
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(1) SPECIFIC TERMS.--When used in this code, and when not
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otherwise distinctly expressed or manifestly incompatible with
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the intent thereof, the following terms shall have the following
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meanings:
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(y) "Taxable year" or "tax year" means the calendar or
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fiscal year upon the basis of which net income is computed under
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this code, including, in the case of a return made for a
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fractional part of a year, the period for which such return is
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made.
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(z) "Taxpayer" means any corporation subject to the tax
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imposed by this code, and includes all corporations that are
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members of a water's edge group for which a consolidated return
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is filed under s. 220.131. However, "taxpayer" does not include a
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corporation having no individuals (including individuals employed
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by an affiliate) receiving compensation in this state as defined
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in s. 220.15 when the only property owned or leased by said
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corporation (including an affiliate) in this state is located at
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the premises of a printer with which it has contracted for
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printing, if such property consists of the final printed product,
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property which becomes a part of the final printed product, or
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property from which the printed product is produced.
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(gg) "Tax haven" means a jurisdiction that, for a
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particular tax year in question, is identified by the
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Organization for Economic Co-operation and Development as a tax
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haven or as having a harmful preferential tax regime or a
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jurisdiction that has no, or a nominal, effective tax on relevant
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income and:
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1. Has laws or practices that prevent effective exchange of
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information for tax purposes with other governments regarding
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taxpayers subject to, or benefiting from, the tax regime;
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2. Lacks transparency. For purposes of this subparagraph, a
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tax regime lacks transparency if the details of legislative,
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legal, or administrative provisions are not open to public
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scrutiny and apparent, or are not consistently applied among
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similarly situated taxpayers;
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3. Facilitates the establishment of foreign-owned entities
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without the need for a local substantive presence or prohibits
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these entities from having any commercial impact on the local
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economy;
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4. Explicitly or implicitly excludes the jurisdiction's
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resident taxpayers from taking advantage of the tax regime's
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benefits or prohibits enterprises that benefit from the regime
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from operating in the jurisdiction's domestic market; or
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5. Has created a tax regime which is favorable for tax
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avoidance, based upon an overall assessment of relevant factors,
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including, but not limited to, whether the jurisdiction has a
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significant untaxed offshore financial or other services sector
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relative to its overall economy.
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For purposes of this paragraph, the term "tax regime" means a set
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or system of rules, laws, regulations, or practices by which
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taxes are imposed on any person, corporation, or entity or on any
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income, property, incident, indicia, or activity pursuant to
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governmental authority.
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(hh) "Water's edge group" means a group of corporations
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related through common ownership the business activities of which
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are integrated with, dependent upon, or contribute to a flow of
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value among members of the group. When 50 percent or more of the
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outstanding voting stock of a corporation is under direct or
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indirect ownership or control of such a group, the corporation
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shall be considered to be part of a water's edge group. A
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corporation shall be considered unitary unless clearly shown by
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the facts and circumstances of the individual case to not be a
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member of a water's edge group. When direct or indirect ownership
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or control is less than 50 percent of the outstanding voting
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stock, all elements of the business activities shall be
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considered in determining whether a corporation qualifies as a
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member of a water's edge group. A water's edge group shall not
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include the income of any corporation which conducts business
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outside the United States if 80 percent or more of the
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corporation's property and payroll, as determined by the
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assignable to locations outside the United States. In determining
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whether voting stock is owned indirectly, the attribution rules
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of s. 318 of the Internal Revenue Code of 1986, as amended, shall
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be used. For purposes of this paragraph, the term "United States"
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is restricted to the states of the United States, the District of
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Columbia, and the Commonwealth of Puerto Rico. All income of a
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water's edge group is presumed to be apportionable business
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income. A taxpayer has the burden of proof regarding the issue of
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whether or not a corporation is a member of a water's edge group
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and whether or not such income is apportionable business income.
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Section 3. Subsection (1) of section 220.13, Florida
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Statutes, is amended to read:
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220.13 "Adjusted federal income" defined.--
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(1) The term "adjusted federal income" means an amount
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equal to the taxpayer's taxable income as defined in subsection
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(2), or such taxable income of more than one taxpayer as provided
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(a) Additions.--There shall be added to such taxable
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income:
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1. The amount of any tax upon or measured by income,
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excluding taxes based on gross receipts or revenues, paid or
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accrued as a liability to the District of Columbia or any state
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of the United States which is deductible from gross income in the
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computation of taxable income for the taxable year.
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2. The amount of interest which is excluded from taxable
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income under s. 103(a) of the Internal Revenue Code or any other
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federal law, less the associated expenses disallowed in the
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computation of taxable income under s. 265 of the Internal
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Revenue Code or any other law, excluding 60 percent of any
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amounts included in alternative minimum taxable income, as
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defined in s. 55(b)(2) of the Internal Revenue Code, if the
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taxpayer pays tax under s. 220.11(3).
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3. In the case of a regulated investment company or real
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estate investment trust, an amount equal to the excess of the net
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long-term capital gain for the taxable year over the amount of
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the capital gain dividends attributable to the taxable year.
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4. That portion of the wages or salaries paid or incurred
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for the taxable year which is equal to the amount of the credit
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allowable for the taxable year under s. 220.181. This
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subparagraph shall expire on the date specified in s. 290.016 for
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the expiration of the Florida Enterprise Zone Act.
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5. That portion of the ad valorem school taxes paid or
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incurred for the taxable year which is equal to the amount of the
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credit allowable for the taxable year under s. 220.182. This
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subparagraph shall expire on the date specified in s. 290.016 for
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the expiration of the Florida Enterprise Zone Act.
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6. The amount of emergency excise tax paid or accrued as a
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liability to this state under chapter 221 which tax is deductible
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from gross income in the computation of taxable income for the
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taxable year.
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7. That portion of assessments to fund a guaranty
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association incurred for the taxable year which is equal to the
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amount of the credit allowable for the taxable year.
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8. In the case of a nonprofit corporation which holds a
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pari-mutuel permit and which is exempt from federal income tax as
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a farmers' cooperative, an amount equal to the excess of the
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gross income attributable to the pari-mutuel operations over the
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attributable expenses for the taxable year.
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9. The amount taken as a credit for the taxable year under
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s. 220.1895.
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10. Up to nine percent of the eligible basis of any
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designated project which is equal to the credit allowable for the
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taxable year under s. 220.185.
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11. The amount taken as a credit for the taxable year under
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s. 220.187.
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12. The amount taken as a credit for the taxable year under
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s. 220.192.
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13. The amount taken as a credit for the taxable year under
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s. 220.193.
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(b) Subtractions.--
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1. There shall be subtracted from such taxable income:
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a. The net operating loss deduction allowable for federal
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income tax purposes under s. 172 of the Internal Revenue Code for
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the taxable year,
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b. The net capital loss allowable for federal income tax
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purposes under s. 1212 of the Internal Revenue Code for the
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taxable year,
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c. The excess charitable contribution deduction allowable
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for federal income tax purposes under s. 170(d)(2) of the
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Internal Revenue Code for the taxable year, and
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d. The excess contributions deductions allowable for
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federal income tax purposes under s. 404 of the Internal Revenue
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Code for the taxable year.
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However, a net operating loss and a capital loss shall never be
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carried back as a deduction to a prior taxable year, but all
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deductions attributable to such losses shall be deemed net
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operating loss carryovers and capital loss carryovers,
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respectively, and treated in the same manner, to the same extent,
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and for the same time periods as are prescribed for such
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carryovers in ss. 172 and 1212, respectively, of the Internal
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Revenue Code. A deductible may not be allowed for net operating
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losses, net capital losses, or excess contribution deductions
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under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
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Code of 1986, as amended, for a member of a water's edge group
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that is not a United States member.
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2. There shall be subtracted from such taxable income any
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amount to the extent included therein the following:
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a. Dividends treated as received from sources without the
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United States, as determined under s. 862 of the Internal Revenue
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Code.
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b. All amounts included in taxable income under s. 78 or s.
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951 of the Internal Revenue Code.
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However, as to any amount subtracted under this subparagraph,
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there shall be added to such taxable income all expenses deducted
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on the taxpayer's return for the taxable year which are
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attributable, directly or indirectly, to such subtracted amount.
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Further, no amount shall be subtracted with respect to dividends
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paid or deemed paid by a Domestic International Sales
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Corporation.
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3. In computing "adjusted federal income" for taxable years
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beginning after December 31, 1976, there shall be allowed as a
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deduction the amount of wages and salaries paid or incurred
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within this state for the taxable year for which no deduction is
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allowed pursuant to s. 280C(a) of the Internal Revenue Code
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(relating to credit for employment of certain new employees).
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4. There shall be subtracted from such taxable income any
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amount of nonbusiness income included therein.
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5. There shall be subtracted any amount of taxes of foreign
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countries allowable as credits for taxable years beginning on or
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after September 1, 1985, under s. 901 of the Internal Revenue
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Code to any corporation which derived less than 20 percent of its
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gross income or loss for its taxable year ended in 1984 from
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sources within the United States, as described in s. 861(a)(2)(A)
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of the Internal Revenue Code, not including credits allowed under
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ss. 902 and 960 of the Internal Revenue Code, withholding taxes
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on dividends within the meaning of sub-subparagraph 2.a., and
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withholding taxes on royalties, interest, technical service fees,
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and capital gains.
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6. There shall be subtracted from such taxable income, to
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the extent included in such taxable income, amounts received by a
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member of a water's edge group that was a dividend paid by
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another member of the same water's edge group.
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7.6. Notwithstanding any other provision of this code,
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except with respect to amounts subtracted pursuant to
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subparagraphs 1. and 3., any increment of any apportionment
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factor which is directly related to an increment of gross
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receipts or income which is deducted, subtracted, or otherwise
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excluded in determining adjusted federal income shall be excluded
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from both the numerator and denominator of such apportionment
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factor. Further, all valuations made for apportionment factor
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purposes shall be made on a basis consistent with the taxpayer's
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method of accounting for federal income tax purposes.
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(c) Installment sales occurring after October 19, 1980.--
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1. In the case of any disposition made after October 19,
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1980, the income from an installment sale shall be taken into
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account for the purposes of this code in the same manner that
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such income is taken into account for federal income tax
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purposes.
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2. Any taxpayer who regularly sells or otherwise disposes
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of personal property on the installment plan and reports the
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income therefrom on the installment method for federal income tax
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purposes under s. 453(a) of the Internal Revenue Code shall
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report such income in the same manner under this code.
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(d) Nonallowable deductions.--A deduction for net operating
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losses, net capital losses, or excess contributions deductions
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under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
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Code which has been allowed in a prior taxable year for Florida
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tax purposes shall not be allowed for Florida tax purposes,
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notwithstanding the fact that such deduction has not been fully
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utilized for federal tax purposes.
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Section 4. Section 220.136, Florida Statutes, is created to
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read:
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220.136 Water's edge groups; special reporting
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requirements.--
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(1) For purposes of this section, the term "water's edge
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group reporting method" means the determination of taxable
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business profits for a group of entities conducting a unitary
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business by adding combined net income and the additions and
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deductions provided in s. 220.13 for members of the group and
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(2) All members of a water's edge group shall use the
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water's edge group reporting method. Under the water's edge group
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reporting method:
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(a) Adjusted federal income for purposes of s. 220.12 means
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the sum of adjusted federal income for all members of the group
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determined for a concurrent taxable year.
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(b) The denominators of the apportionment factors shall be
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calculated for all members of the water's edge group combined.
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(c) The statutory apportionment formula shall be used for
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all members of the water's edge group, unless an alternate method
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is determined to be more appropriate by the department.
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(d) Intercompany sales transactions made between members of
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the water's edge group shall be eliminated in the computation of
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this subsection, the term "sales" includes, but is not limited
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to, loans, payments for the use of intangibles, dividends, and
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management fees.
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(e) Each taxpayer shall apportion adjusted federal income
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under s. 220.15 as a member of a water's edge group that files a
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water's edge group return under this section based upon the
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apportionment factors described in s. 220.15. For purposes of
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this subsection, each special industry member included in a
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water's edge group filing a water's edge group return under this
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section, which would otherwise be permitted to use a special
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method of apportionment under s. 220.151, shall construct the
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numerator of its sales, property, and payroll factors,
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respectively, by multiplying the denominator of each such factor
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by the premiums or revenue miles factor ratio otherwise
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applicable pursuant to s. 220.151 in the manner prescribed by the
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department by rule.
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(f) For purposes of this subsection, each special industry
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member included in a water's edge group return, which member
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would otherwise be permitted to use a special method of
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apportionment under s. 220.151, shall construct the numerator of
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its sales, property, and payroll factors, respectively, by
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multiplying the denominator of each such factor by the premiums
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or revenue miles factor ratio otherwise applicable pursuant to s.
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220.151 in the manner prescribed by the department by rule.
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(g) The income attributable to the activities in this state
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of a corporation exempt from taxation because of Pub. L. No. 86-
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272 is excluded from the sales factor numerator on a water's edge
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group filing a combined water's edge group return even though an
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affiliated corporation may have nexus with this state and is
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subject to tax in this state.
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(3)(a) The single water's edge group return must be filed
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in the name and with the federal employer identification number
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of the parent corporation if the parent is a member of a water's
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edge group and has nexus with this state. If there is no parent
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corporation, if the parent is not a water's edge group member, or
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if the parent does not have nexus with this state, the members of
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the water's edge group shall choose a Florida taxpayer member to
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file the return. After such a filing member has been selected,
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such member must remain the same in subsequent years unless an
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ownership change occurs or the filing member no longer has nexus
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with this state. The return must be signed by a responsible
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officer of the filing member as the agent of all members of the
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water's edge group subject to tax by this state.
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(b) If the taxable years of the members of the water's edge
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group differ, the filing member's taxable year must be used to
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determine the net income for this state of the water's edge
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group. If the precise amount of a water's edge group member's
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income can be readily determined from the books for the months
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involved in the filing member's taxable year, those actual
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amounts shall be used. In the absence of such a precise
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determination, the income of a water's edge group member must be
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converted to conform to the taxable year of the filing member on
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the basis of the number of months falling within the applicable
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taxable year. This method may be used only if the return can be
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timely filed after the member's taxable year ends. As an
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alternative, the water's edge group may include in its taxable
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income all of the taxable income of a group member whose taxable
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year ends within the taxable year of the water's edge group. Once
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one of these methods is used for a water's edge group member,
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that member must continue to use that method for succeeding years
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for as long as the corporation remains a member of the water's
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edge group. After the combined taxable income of the water's edge
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group is determined based upon the filing member's taxable year,
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the apportionment factor must be computed on the basis of the
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same taxable year.
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(4) A water's edge group shall file a domestic disclosure
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spreadsheet in the manner and form prescribed by rule by the
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department. The term "domestic disclosure spreadsheet" means a
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spreadsheet that fully discloses the income reported to each
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state, the state tax liability, the method used for apportioning
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or allocating income to the various states, and other information
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provided for by rule as may be necessary to determine the proper
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amount of tax due to each state and to identify the water's edge
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group.
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(5) The department may adopt rules and forms by rule as may
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be necessary or appropriate to administer and implement this
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section. It is the intent of the Legislature, by this section, to
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grant the department extensive authority to adopt rules and forms
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describing and defining principles for determining the existence
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of a water's edge group business, definitions of common control,
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and methods of reporting and related forms, principles, and
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definitions.
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Section 5. Subsection (3) of section 220.14, Florida
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Statutes, is amended to read:
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220.14 Exemption.--
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(3) Only one exemption shall be allowed to taxpayers filing
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a combined water's edge group consolidated return under this
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code.
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Section 6. Paragraph (c) of subsection (5) of section
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220.15, Florida Statutes, is amended to read:
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220.15 Apportionment of adjusted federal income.--
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(5) The sales factor is a fraction the numerator of which
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is the total sales of the taxpayer in this state during the
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taxable year or period and the denominator of which is the total
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sales of the taxpayer everywhere during the taxable year or
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period.
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(c) Sales of a financial organization, including, but not
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limited to, banking and savings institutions, investment
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companies, real estate investment trusts, and brokerage
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companies, occur in this state if derived from:
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1. Fees, commissions, or other compensation for financial
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services rendered within this state;
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2. Gross profits from trading in stocks, bonds, or other
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securities managed within this state;
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3. Interest received within this state, other than interest
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from loans secured by mortgages, deeds of trust, or other liens
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upon real or tangible personal property located without this
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state, and dividends received within this state;
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4. Interest charged to customers at places of business
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maintained within this state for carrying debit balances of
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margin accounts, without deduction of any costs incurred in
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carrying such accounts;
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5. Interest, fees, commissions, or other charges or gains
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from loans secured by mortgages, deeds of trust, or other liens
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upon real or tangible personal property located in this state or
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from installment sale agreements originally executed by a
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taxpayer or the taxpayer's agent to sell real or tangible
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personal property located in this state;
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6. Rents from real or tangible personal property located in
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this state; or
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7. Any other gross income, including other interest,
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resulting from the operation as a financial organization within
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this state.
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In computing the amounts under this paragraph, any amount
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received by a member of an affiliated group (determined under s.
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1504(a) of the Internal Revenue Code, but without reference to
428
whether any such corporation is an "includable corporation" under
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s. 1504(b) of the Internal Revenue Code) from another member of
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such group shall be included only to the extent such amount
431
exceeds expenses of the recipient directly related thereto.
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Section 7. Paragraphs (f) and (g) of subsection (1) of
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section 220.183, Florida Statutes, are amended to read:
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220.183 Community contribution tax credit.--
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(1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
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CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
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SPENDING.--
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(f) A taxpayer who files a Florida consolidated return as a
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member of an affiliated group pursuant to s. 220.131(1) may be
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allowed the credit on a consolidated return basis.
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(f)(g) A taxpayer who is eligible to receive the credit
442
provided for in s. 624.5105 is not eligible to receive the credit
443
provided by this section.
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Section 8. Subsection (1) of section 220.1845, Florida
445
Statutes, is amended to read:
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220.1845 Contaminated site rehabilitation tax credit.--
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(1) AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.--
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(a) A credit in the amount of 50 percent of the costs of
449
voluntary cleanup activity that is integral to site
450
rehabilitation at the following sites is available against any
451
tax due for a taxable year under this chapter:
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1. A drycleaning-solvent-contaminated site eligible for
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state-funded site rehabilitation under s. 376.3078(3);
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2. A drycleaning-solvent-contaminated site at which cleanup
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is undertaken by the real property owner pursuant to s.
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376.3078(11), if the real property owner is not also, and has
457
never been, the owner or operator of the drycleaning facility
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where the contamination exists; or
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3. A brownfield site in a designated brownfield area under
460
s. 376.80.
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(b) A tax credit applicant, or multiple tax credit
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applicants working jointly to clean up a single site, may not be
463
granted more than $500,000 per year in tax credits for each site
464
voluntarily rehabilitated. Multiple tax credit applicants shall
465
be granted tax credits in the same proportion as their
466
contribution to payment of cleanup costs. Subject to the same
467
conditions and limitations as provided in this section, a
468
municipality, county, or other tax credit applicant which
469
voluntarily rehabilitates a site may receive not more than
470
$500,000 per year in tax credits which it can subsequently
471
transfer subject to the provisions in paragraph (f) (g).
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(c) If the credit granted under this section is not fully
473
used in any one year because of insufficient tax liability on the
474
part of the corporation, the unused amount may be carried forward
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for a period not to exceed 5 years. The carryover credit may be
476
used in a subsequent year when the tax imposed by this chapter
477
for that year exceeds the credit for which the corporation is
478
eligible in that year under this section after applying the other
479
credits and unused carryovers in the order provided by s.
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220.02(8). Five years after the date a credit is granted under
481
this section, such credit expires and may not be used. However,
482
if during the 5-year period the credit is transferred, in whole
483
or in part, pursuant to paragraph (f) (g), each transferee has 5
484
years after the date of transfer to use its credit.
485
(d) A taxpayer that files a consolidated return in this
486
state as a member of an affiliated group under s. 220.131(1) may
487
be allowed the credit on a consolidated return basis up to the
488
amount of tax imposed upon the consolidated group.
489
(d)(e) A tax credit applicant that receives state-funded
490
site rehabilitation under s. 376.3078(3) for rehabilitation of a
491
drycleaning-solvent-contaminated site is ineligible to receive
492
credit under this section for costs incurred by the tax credit
493
applicant in conjunction with the rehabilitation of that site
494
during the same time period that state-administered site
495
rehabilitation was underway.
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(e)(f) The total amount of the tax credits which may be
497
granted under this section is $2 million annually.
498
(f)(g)1. Tax credits that may be available under this
499
section to an entity eligible under s. 376.30781 may be
500
transferred after a merger or acquisition to the surviving or
501
acquiring entity and used in the same manner and with the same
502
limitations.
503
2. The entity or its surviving or acquiring entity as
504
described in subparagraph 1., may transfer any unused credit in
505
whole or in units of no less than 25 percent of the remaining
506
credit. The entity acquiring such credit may use it in the same
507
manner and with the same limitation as described in this section.
508
Such transferred credits may not be transferred again although
509
they may succeed to a surviving or acquiring entity subject to
510
the same conditions and limitations as described in this section.
511
3. In the event the credit provided for under this section
512
is reduced either as a result of a determination by the
513
Department of Environmental Protection or an examination or audit
514
by the Department of Revenue, such tax deficiency shall be
515
recovered from the first entity, or the surviving or acquiring
516
entity, to have claimed such credit up to the amount of credit
517
taken. Any subsequent deficiencies shall be assessed against any
518
entity acquiring and claiming such credit, or in the case of
519
multiple succeeding entities in the order of credit succession.
520
(g)(h) In order to encourage completion of site
521
rehabilitation at contaminated sites being voluntarily cleaned up
522
and eligible for a tax credit under this section, the tax credit
523
applicant may claim an additional 25 percent of the total cleanup
524
costs, not to exceed $500,000, in the final year of cleanup as
525
evidenced by the Department of Environmental Protection issuing a
526
"No Further Action" order for that site.
527
Section 9. Paragraphs (c) and (d) of subsection (5) of
528
section 220.187, Florida Statutes, are amended to read:
529
220.187 Credits for contributions to nonprofit scholarship-
530
funding organizations.--
531
(5) AUTHORIZATION TO GRANT SCHOLARSHIP FUNDING TAX CREDITS;
532
LIMITATIONS ON INDIVIDUAL AND TOTAL CREDITS.--
533
(c) A taxpayer who files a Florida consolidated return as a
534
member of an affiliated group pursuant to s. 220.131(1) may be
535
allowed the credit on a consolidated return basis; however, the
536
total credit taken by the affiliated group is subject to the
537
limitation established under paragraph (a).
538
(c)(d) Effective for tax years beginning January 1, 2006, a
539
taxpayer may rescind all or part of its allocated tax credit
540
under this section. The amount rescinded shall become available
541
for purposes of the cap for that state fiscal year under this
542
section to an eligible taxpayer as approved by the department if
543
the taxpayer receives notice from the department that the
544
rescindment has been accepted by the department and the taxpayer
545
has not previously rescinded any or all of its tax credit
546
allocation under this section more than once in the previous 3
547
tax years. Any amount rescinded under this paragraph shall become
548
available to an eligible taxpayer on a first-come, first-served
549
basis based on tax credit applications received after the date
550
the rescindment is accepted by the department.
551
Section 10. Paragraphs (g) and (h) of subsection (1) of
552
section 220.19, Florida Statutes, are amended to read:
553
220.19 Child care tax credits.--
554
(1) AUTHORIZATION TO GRANT TAX CREDITS; LIMITATIONS.--
555
(g) A taxpayer that files a consolidated return in this
556
state as a member of an affiliated group under s. 220.131(1) may
557
be allowed the credit on a consolidated return basis.
558
(g)(h) A taxpayer that is eligible to receive credit under
559
s. 624.5107 is ineligible to receive credit under this section.
560
Section 11. Paragraph (c) of subsection (3) of section
561
220.191, Florida Statutes, is amended to read:
562
220.191 Capital investment tax credit.--
563
(3)
564
(c) The credit granted under this subsection may be used in
565
whole or in part by the qualifying business or any corporation
566
that is either a member of that qualifying business's affiliated
567
group of corporations, is a related entity taxable as a
568
cooperative under subchapter T of the Internal Revenue Code, or,
569
if the qualifying business is an entity taxable as a cooperative
570
under subchapter T of the Internal Revenue Code, is related to
571
the qualifying business. Any entity related to the qualifying
572
business may continue to file as a member of a Florida-nexus
573
consolidated group pursuant to a prior election made under s.
574
220.131(1), Florida Statutes (1985), even if the parent of the
575
group changes due to a direct or indirect acquisition of the
576
former common parent of the group. Any credit can be used by any
577
of the affiliated companies or related entities referenced in
578
this paragraph to the same extent as it could have been used by
579
the qualifying business. However, any such use shall not operate
580
to increase the amount of the credit or extend the period within
581
which the credit must be used.
582
Section 12. Subsection (2) of section 220.192, Florida
583
Statutes, is amended to read:
584
220.192 Renewable energy technologies investment tax
585
credit.--
586
(2) TAX CREDIT.--For tax years beginning on or after
587
January 1, 2007, a credit against the tax imposed by this chapter
588
shall be granted in an amount equal to the eligible costs.
589
Credits may be used in tax years beginning January 1, 2007, and
590
ending December 31, 2010, after which the credit shall expire. If
591
the credit is not fully used in any one tax year because of
592
insufficient tax liability on the part of the corporation, the
593
unused amount may be carried forward and used in tax years
594
beginning January 1, 2007, and ending December 31, 2012, after
595
which the credit carryover expires and may not be used. A
596
taxpayer that files a consolidated return in this state as a
597
member of an affiliated group under s. 220.131(1) may be allowed
598
the credit on a consolidated return basis up to the amount of tax
599
imposed upon the consolidated group. Any eligible cost for which
600
a credit is claimed and which is deducted or otherwise reduces
601
federal taxable income shall be added back in computing adjusted
602
federal income under s. 220.13.
603
Section 13. Paragraphs (e), (f), (g), (h), and (i) of
604
subsection (3) of section 220.193, Florida Statutes, are amended
605
to read:
606
220.193 Florida renewable energy production credit.--
607
(3) An annual credit against the tax imposed by this
608
section shall be allowed to a taxpayer, based on the taxpayer's
609
production and sale of electricity from a new or expanded Florida
610
renewable energy facility. For a new facility, the credit shall
611
be based on the taxpayer's sale of the facility's entire
612
electrical production. For an expanded facility, the credit shall
613
be based on the increases in the facility's electrical production
614
that are achieved after May 1, 2006.
615
(e) A taxpayer that files a consolidated return in this
616
state as a member of an affiliated group under s. 220.131(1) may
617
be allowed the credit on a consolidated return basis up to the
618
amount of tax imposed upon the consolidated group.
619
(e)(f)1. Tax credits that may be available under this
620
section to an entity eligible under this section may be
621
transferred after a merger or acquisition to the surviving or
622
acquiring entity and used in the same manner with the same
623
limitations.
624
2. The entity or its surviving or acquiring entity as
625
described in subparagraph 1. may transfer any unused credit in
626
whole or in units of no less than 25 percent of the remaining
627
credit. The entity acquiring such credit may use it in the same
628
manner and with the same limitations under this section. Such
629
transferred credits may not be transferred again although they
630
may succeed to a surviving or acquiring entity subject to the
631
same conditions and limitations as described in this section.
632
3. In the event the credit provided for under this section
633
is reduced as a result of an examination or audit by the
634
department, such tax deficiency shall be recovered from the first
635
entity or the surviving or acquiring entity to have claimed such
636
credit up to the amount of credit taken. Any subsequent
637
deficiencies shall be assessed against any entity acquiring and
638
claiming such credit, or in the case of multiple succeeding
639
entities in the order of credit succession.
640
(f)(g) Notwithstanding any other provision of this section,
641
credits for the production and sale of electricity from a new or
642
expanded Florida renewable energy facility may be earned between
643
January 1, 2007 and June 30, 2010. The combined total amount of
644
tax credits which may be granted for all taxpayers under this
645
section is limited to $5 million per state fiscal year.
646
(g)(h) A taxpayer claiming a credit under this section
647
shall be required to add back to net income that portion of its
648
business deductions claimed on its federal return paid or
649
incurred for the taxable year which is equal to the amount of the
650
credit allowable for the taxable year under this section.
651
(h)(i) A taxpayer claiming credit under this section may
652
not claim a credit under s. 220.192. A taxpayer claiming credit
653
under s. 220.192 may not claim a credit under this section.
654
Section 14. Section 220.51, Florida Statutes, is amended to
655
read:
656
220.51 Promulgation of rules and regulations.--In
657
accordance with the Administrative Procedure Act, chapter 120,
658
the department is authorized to make, promulgate, and enforce
659
such reasonable rules and regulations, and to prescribe such
660
forms relating to the administration and enforcement of the
661
provisions of this code, as it may deem appropriate, including:
662
(1) Rules for initial implementation of this code and for
663
taxpayers' transitional taxable years commencing before and
664
ending after January 1, 1972.;
665
(2) Rules or regulations to clarify whether certain groups,
666
organizations, or associations formed under the laws of this
667
state or any other state, country, or jurisdiction shall be
668
deemed "taxpayers" for the purposes of this code, in accordance
669
with the legislative declarations of intent in s. 220.02.; and
670
(3) Regulations relating to consolidated reporting for
671
affiliated groups of corporations, in order to provide for an
672
equitable and just administration of this code with respect to
673
multicorporate taxpayers.
674
Section 15. Section 220.64, Florida Statutes, is amended to
675
read:
676
220.64 Other provisions applicable to franchise tax.--To
677
the extent that they are not manifestly incompatible with the
678
provisions of this part, parts I, III, IV, V, VI, VIII, IX, and X
680
apply to the franchise tax imposed by this part. Under rules
681
prescribed in s. 220.131, a consolidated return may be filed by
682
any affiliated group of corporations composed of one or more
683
banks or savings associations, its or their Florida parent
684
corporation, and any nonbank or nonsavings subsidiaries of such
685
parent corporation.
686
Section 16. Subsection (9) of section 376.30781, Florida
687
Statutes, is amended to read:
688
376.30781 Partial tax credits for rehabilitation of
689
drycleaning-solvent-contaminated sites and brownfield sites in
690
designated brownfield areas; application process; rulemaking
691
authority; revocation authority.--
692
(9) On or before March 31, the Department of Environmental
693
Protection shall inform each eligible tax credit applicant of the
694
amount of its partial tax credit and provide each eligible tax
695
credit applicant with a tax credit certificate that must be
696
submitted with its tax return to the Department of Revenue to
697
claim the tax credit or be transferred pursuant to s.
698
220.1845(1)(g)(h). Credits will not result in the payment of
699
refunds if total credits exceed the amount of tax owed.
700
Section 17. Transition rules.--
701
(1) For the first taxable year beginning on or after
702
January 1, 2009, a taxpayer that filed a Florida return for the
703
preceding taxable year and is a member of a water's edge group
704
shall compute its income together with all members of the water's
705
edge group and file a separate corporate income tax return or may
706
elect to combine its tax return with all members of the water's
707
edge group.
708
(2) An affiliated group of corporations that filed a
709
Florida consolidated return pursuant to an election provided in
710
former s. 220.131, Florida Statutes, shall cease filing a Florida
711
consolidated return for taxable years beginning on or after
712
January 1, 2009, and shall file water's edge group returns or may
713
elect to file a combined water's edge group return.
714
(3) An affiliated group of corporations that filed a
715
Florida consolidated return pursuant to the election provided in
716
s. 220.131(1), Florida Statutes (1985), that allowed the
717
affiliated group to make an election with 90 days after December
718
20, 1984, or upon filing the taxpayer's first return after
719
December 20, 1984, whichever occurred later, shall cease filing a
720
Florida consolidated return using that method for taxable years
721
beginning on or after January 1, 2009, and shall file water's
722
edge group returns or may elect to file a combined water's edge
723
group return.
724
Section 18. Section 220.131, Florida Statutes, is repealed.
725
Section 19. Of the funds recaptured by this act, the sum of
726
$50 million is appropriated from the General Revenue Fund to the
727
State University System for workforce education, to be allocated
728
by the Board of Governors; the sum of $50 million is appropriated
729
from the General Revenue Fund to community colleges for workforce
730
education, to be allocated by the State Board of Education; and
731
the remainder of such funds, as determined by the Revenue
732
Estimating Conference, shall be appropriated from the General
733
Revenue Fund to the various school districts to reduce the
734
required local effort, to be allocated as provided in the General
735
Appropriations Act.
736
Section 20. This act shall take effect July 1, 2008.
CODING: Words stricken are deletions; words underlined are additions.