Florida Senate - 2009 SB 2156 By Senator Altman 24-01482C-09 20092156__ 1 A bill to be entitled 2 An act relating to tax credits; amending s. 220.02, 3 F.S.; revising the priority of tax credits that may be 4 taken against the corporate income tax or the 5 franchise tax; amending s. 220.13, F.S.; redefining 6 the term “adjusted federal income” to include the 7 amount of certain tax credits; providing for 8 application; creating s. 220.1811, F.S.; authorizing 9 aerospace sector jobs tax credits and tuition 10 reimbursement tax credits; defining terms; authorizing 11 a tax credit to aerospace businesses based on the 12 salary or tuition reimbursed to certain employees; 13 specifying the maximum annual amount of tax credits 14 for an aerospace business; limiting the annual amount 15 of tax credits available; providing for the Department 16 of Revenue to approve applications for tax credits; 17 prohibiting increases in the amount of unused tax 18 credits carried over in amended tax returns; providing 19 fines and criminal penalties for certain unlawful 20 claims of tax credits; authorizing the Department of 21 Revenue to adopt rules; providing for the expiration 22 of the tax credit program; providing an effective 23 date. 24 25 Be It Enacted by the Legislature of the State of Florida: 26 27 Section 1. Subsection (8) of section 220.02, Florida 28 Statutes, is amended to read: 29 220.02 Legislative intent.— 30 (8)It is the intent of the Legislature thatCredits 31 againsteitherthe corporate income tax or the franchise tax 32 shall be applied in the following order: those enumerated in s. 33 631.828, those enumerated in s. 220.191, those enumerated in s. 34 220.181, those enumerated in s. 220.183, those enumerated in s. 35 220.182, those enumerated in s. 220.1895, those enumerated in s. 36 221.02, those enumerated in s. 220.184, those enumerated in s. 37 220.186, those enumerated in s. 220.1845, those enumerated in s. 38 220.19, those enumerated in s. 220.185, those enumerated in s. 39 220.187, those enumerated in s. 220.192,andthose enumerated in 40 s. 220.193, and those enumerated in s. 220.1811. 41 Section 2. Paragraph (a) of subsection (1) of section 42 220.13, Florida Statutes, is amended to read: 43 220.13 “Adjusted federal income” defined.— 44 (1) The term “adjusted federal income” means an amount 45 equal to the taxpayer's taxable income as defined in subsection 46 (2), or such taxable income of more than one taxpayer as 47 provided in s. 220.131, for the taxable year, adjusted as 48 follows: 49 (a) Additions.—There shall be added to such taxable income: 50 1. The amount of any tax upon or measured by income, 51 excluding taxes based on gross receipts or revenues, paid or 52 accrued as a liability to the District of Columbia or any state 53 of the United States which is deductible from gross income in 54 the computation of taxable income for the taxable year. 55 2. The amount of interest which is excluded from taxable 56 income under s. 103(a) of the Internal Revenue Code or any other 57 federal law, less the associated expenses disallowed in the 58 computation of taxable income under s. 265 of the Internal 59 Revenue Code or any other law, excluding 60 percent of any 60 amounts included in alternative minimum taxable income, as 61 defined in s. 55(b)(2) of the Internal Revenue Code, if the 62 taxpayer pays tax under s. 220.11(3). 63 3. In the case of a regulated investment company or real 64 estate investment trust, an amount equal to the excess of the 65 net long-term capital gain for the taxable year over the amount 66 of the capital gain dividends attributable to the taxable year. 67 4. That portion of the wages or salaries paid or incurred 68 for the taxable year which is equal to the amount of the credit 69 allowable for the taxable year under s. 220.181. This 70 subparagraph shall expire on the date specified in s. 290.016 71 for the expiration of the Florida Enterprise Zone Act. 72 5. That portion of the ad valorem school taxes paid or 73 incurred for the taxable year which is equal to the amount of 74 the credit allowable for the taxable year under s. 220.182. This 75 subparagraph shall expire on the date specified in s. 290.016 76 for the expiration of the Florida Enterprise Zone Act. 77 6. The amount of emergency excise tax paid or accrued as a 78 liability to this state under chapter 221 which tax is 79 deductible from gross income in the computation of taxable 80 income for the taxable year. 81 7. That portion of assessments to fund a guaranty 82 association incurred for the taxable year which is equal to the 83 amount of the credit allowable for the taxable year. 84 8. In the case of a nonprofit corporation which holds a 85 pari-mutuel permit and which is exempt from federal income tax 86 as a farmers' cooperative, an amount equal to the excess of the 87 gross income attributable to the pari-mutuel operations over the 88 attributable expenses for the taxable year. 89 9. The amount taken as a credit for the taxable year under 90 s. 220.1895. 91 10. Up to nine percent of the eligible basis of any 92 designated project which is equal to the credit allowable for 93 the taxable year under s. 220.185. 94 11. The amount taken as a credit for the taxable year under 95 s. 220.187. 96 12. The amount taken as a credit for the taxable year under 97 s. 220.192. 98 13. The amount taken as a credit for the taxable year under 99 s. 220.193. 100 14. Any amount in excess of $25,000 allowable as a 101 deduction for federal income tax purposes under s. 179 of the 102 Internal Revenue Code of 1986, as amended, for the taxable year. 103 15. Any amount allowable as a deduction for federal income 104 tax purposes under s. 167 or s. 168 of the Internal Revenue Code 105 of 1986, as amended, for the taxable year to the extent that 106 such amount includes bonus depreciation allowable as deduction 107 under s. 168(k). 108 16. The amount taken as a credit for the taxable year under 109 s. 220.1811. 110 Section 3. Section 220.1811, Florida Statutes, is created 111 to read: 112 220.1811 Aerospace sector jobs tax credit and tuition 113 reimbursement tax credit.— 114 (1) DEFINITIONS.—As used in this section, the term: 115 (a) “Aerospace business” means a business located in this 116 state which is engaged in the aerospace industry, as defined in 117 s. 331.303. 118 (b) “Qualified employee” means a resident of this state 119 who: 120 1. Is employed by an aerospace business on or after January 121 1, 2010; 122 2. Received an undergraduate or graduate degree in a 123 program accredited by the Engineering Accreditation Commission 124 of the Accreditation Board for Engineering and Technology from a 125 college or university that is accredited by a national 126 accrediting body; 127 3. Was not employed by an aerospace business within 6 128 months preceding his or her employment or contract with the 129 aerospace business requesting a credit under this section; 130 4. Is not an owner, partner, or majority stockholder of an 131 aerospace business; and 132 5. Is employed for at least 3 months. 133 (c) “Tuition reimbursed to a qualified employee” means a 134 lump-sum payment by an aerospace business to a qualified 135 employee, which may not exceed the average annual tuition, as 136 reported by the Board of Governors of the State University 137 System, for a Florida resident who is a full-time undergraduate 138 student enrolled in a public college or university. The term 139 does not include the cost of books, fees, or room and board. 140 (2) AEROSPACE SECTOR JOBS TAX CREDIT.— 141 (a) A credit against the tax imposed under this chapter may 142 be claimed by an aerospace business for compensation paid to a 143 qualified employee. 144 (b) The credit authorized by this subsection shall be in 145 the amount of: 146 1. Ten percent of the compensation paid for the first 147 through fifth years of employment in this state by an aerospace 148 business, if the qualified employee graduated from a college or 149 university located in this state. 150 2. Five percent of the compensation paid for the first 151 through fifth years of employment in this state by an aerospace 152 business, if the qualified employee graduated from a college or 153 university located outside this state. 154 (c) The credit authorized by this subsection may not exceed 155 $12,500 annually for each qualified employee. 156 (d) This credit applies only with respect to wages subject 157 to unemployment tax. 158 (e) If the credit is not fully used in any one year, the 159 unused amount may be carried forward for a period not to exceed 160 5 years. The carryover credit may be used in a subsequent year 161 if the tax imposed by this chapter for such year exceeds the 162 credit for such year after applying the other credits and unused 163 credit carryovers in the order provided in s. 220.02(8). 164 (3) TUITION REIMBURSEMENT TAX CREDIT.— 165 (a) A credit against the tax imposed under this chapter may 166 be claimed by an aerospace business for 50 percent of tuition 167 reimbursed to a qualified employee in a tax year. 168 (b) The credit may be claimed only if the qualified 169 employee was awarded an undergraduate or graduate degree within 170 1 year after commencing employment with the business requesting 171 the credit, and may be claimed within 4 years after employment 172 of a qualified employee. 173 (c) If this credit is not fully used in any one year, the 174 unused amount may be carried forward for a period not to exceed 175 5 years. The carryover credit may be used in a subsequent year 176 if the tax imposed under this chapter for such year exceeds the 177 credit for such year after applying the other credits and unused 178 credit carryovers in the order provided in s. 220.02(8). 179 (4) MAXIMUM CREDITS FOR AN AEROSPACE BUSINESS.—The maximum 180 amount of credits under this section which may be claimed by any 181 single aerospace business in a calendar year is $200,000. 182 (5) ANNUAL LIMIT ON TAX CREDITS.—The total amount of 183 credits that may be granted under this section is $2 million in 184 any calendar year. A credit that is claimed after the $2 million 185 limit is reached shall be disallowed. 186 (6) DUPLICATION OF TAX CREDITS.—A business may not claim an 187 aerospace sector jobs tax credit and a tuition reimbursement tax 188 credit for the same qualified employee. 189 (7) APPLICATION FOR TAX CREDITS.— 190 (a) An aerospace business must apply to the department for 191 authorization to claim an aerospace sector jobs tax credit or a 192 tuition reimbursement tax credit. The application must be filed 193 under oath and include: 194 1. The name and address of the business and documentation 195 that the business is an aerospace business. 196 2. For each employee for which a tax credit is sought: 197 a. The employee's name and documentation that the employee 198 is a qualified employee. 199 b. The salary or hourly wages, including the hourly wages 200 subject to unemployment tax paid to the qualified employee. 201 c. The location of the university from which the qualified 202 employee received his or her degree. 203 d. A statement of whether the applicant is seeking an 204 aerospace sector jobs tax credit or a tuition reimbursement tax 205 credit. 206 (b) The applicant for a tax credit has the burden of 207 demonstrating to the satisfaction of the department that it 208 meets the requirements of this section. 209 (8) LIMITS ON THE CARRY OVER OF TAX CREDITS.—An aerospace 210 business may not carry over more tax credits in an amended 211 return than were claimed on the original return for the taxable 212 year. This subsection does not limit increases in the amount of 213 credit claimed on an amended return due to the use of any credit 214 amount previously carried over pursuant to paragraph (2)(e) or 215 paragraph (3)(c). 216 (9) PENALTIES.— 217 (a) Any person who fraudulently claims this credit is 218 liable for repayment of the credit, plus a mandatory penalty in 219 the amount of 200 percent of the credit, plus interest at the 220 rate provided in s. 220.807, and commits a felony of the third 221 degree, punishable as provided in s. 775.082, s. 775.083, or s. 222 775.084. 223 (b) Any person who makes an underpayment of tax as a result 224 of a grossly overstated claim for this credit commits a felony 225 of the third degree, punishable as provided in s. 775.082, s. 226 775.083, or s. 775.084. As used in this paragraph, the term 227 “grossly overstated claim” means a claim in an amount in excess 228 of 100 percent of the amount of credit allowable under this 229 section. 230 (10) RULEMAKING.—The department may adopt rules to 231 prescribe any necessary forms required to claim a tax credit 232 under this section and to provide guidelines and procedures 233 required to administer this section. 234 (11) EXPIRATION.—This section, except paragraphs (2)(e) and 235 (3)(c) and subsection (9), expires December 31, 2020. An 236 aerospace business may not claim a new tax credit under this 237 section after that date. However, an aerospace business may 238 claim tax credits carried over pursuant to paragraph (2)(e) or 239 paragraph (3)(c). 240 Section 4. This act shall take effect January 1, 2010, and 241 applies to tax years beginning on or after that date.