Florida Senate - 2009                                    SB 2270
       
       
       
       By Senator Gelber
       
       
       
       
       35-00912-09                                           20092270__
    1                        A bill to be entitled                      
    2         An act relating to the corporate income tax; providing
    3         legislative findings and intent; amending s. 220.03,
    4         F.S.; revising a definition; defining the terms “tax
    5         haven” and “water's edge group”; amending s. 220.13,
    6         F.S.; conforming a cross-reference; redefining the
    7         term “adjusted federal income” to limit the
    8         subtraction of certain deductions and certain
    9         carryovers; requiring the subtraction of certain
   10         dividends from taxable income; creating s. 220.136,
   11         F.S.; providing rules and criteria to determine if a
   12         corporation is a member of a water's edge group;
   13         creating s. 220.1363, F.S.; providing a reporting
   14         method for a water's edge group; providing for the
   15         apportionment of income to the state; requiring a
   16         member of a water's edge group having nexus with this
   17         state to file a single return for the water's edge
   18         group; providing for the determination of income for a
   19         member of a water's edge group having a different tax
   20         year than the water's edge group; requiring a water's
   21         edge group return to include a computational schedule;
   22         requiring a water's edge group to file a domestic
   23         disclosure spreadsheet along with its return;
   24         authorizing the Department of Revenue to adopt rules;
   25         amending s. 220.14, F.S.; providing for the proration
   26         of an exemption during a leap year; limiting a water's
   27         edge group to a single claim of a specified exemption;
   28         amending s. 220.15, F.S.; deleting provisions relating
   29         to affiliated groups with respect to certain sales of
   30         a financial institution; amending s. 220.183, F.S.;
   31         deleting provisions relating to affiliated groups with
   32         respect to community contribution tax credits;
   33         amending s. 220.1845, F.S.; deleting provisions
   34         relating to affiliated groups with respect to the
   35         contaminated site rehabilitation tax credit; amending
   36         s. 220.187, F.S.; deleting provisions relating to
   37         affiliated groups with respect to the tax credit for
   38         contributions to nonprofit scholarship funding
   39         organizations; amending s. 220.191, F.S.; deleting
   40         provisions relating to affiliated groups with respect
   41         to the capital investment tax credit; amending s.
   42         220.192, F.S.; deleting provisions relating to
   43         affiliated groups with respect to the renewable energy
   44         technologies investment tax credit; amending s.
   45         220.193, F.S.; deleting provisions relating to
   46         affiliated groups with respect to the Florida
   47         renewable energy production tax credit; amending s.
   48         220.51, F.S.; deleting provisions relating to the
   49         rulemaking authority of the Department of Revenue with
   50         respect to consolidated reporting for affiliated
   51         groups; amending s. 220.64, F.S.; conforming cross
   52         references; providing transitional rules for corporate
   53         income tax returns filed by water's edge groups and
   54         affiliated groups of corporations; specifying the
   55         allocation of funds that are recaptured under the act;
   56         repealing s. 220.131, F.S., relating to adjusted
   57         federal income for affiliated groups; providing an
   58         effective date.
   59  
   60  Be It Enacted by the Legislature of the State of Florida:
   61  
   62         Section 1. Legislative findings and intent.—The Legislature
   63  finds that the separate accounting system used to measure the
   64  income of multistate and multinational corporations for tax
   65  purposes often places Florida corporations at a competitive
   66  disadvantage. Moreover, corporate business is increasingly
   67  conducted through groups of commonly owned corporations.
   68  Therefore, the Legislature intends to more accurately measure
   69  the business activities of corporations by adopting a combined
   70  system of income tax reporting.
   71         Section 2. Paragraph (z) of subsection (1) of section
   72  220.03, Florida Statutes, is amended and paragraphs (gg) and
   73  (hh) are added to that subsection to read:
   74         220.03 Definitions.—
   75         (1) SPECIFIC TERMS.—When used in this code, and when not
   76  otherwise distinctly expressed or manifestly incompatible with
   77  the intent thereof, the following terms shall have the following
   78  meanings:
   79         (z) “Taxpayer” means any corporation subject to the tax
   80  imposed by this code, and includes all corporations that are
   81  members of a water's edge group for which a consolidated return
   82  is filed under s. 220.131. However, “taxpayer” does not include
   83  a corporation having no individuals (including individuals
   84  employed by an affiliate) receiving compensation in this state
   85  as defined in s. 220.15 when the only property owned or leased
   86  by said corporation (including an affiliate) in this state is
   87  located at the premises of a printer with which it has
   88  contracted for printing, if such property consists of the final
   89  printed product, property which becomes a part of the final
   90  printed product, or property from which the printed product is
   91  produced.
   92         (gg)“Tax haven” means a jurisdiction that, for a
   93  particular tax year:
   94         1.Is identified by the Organization for Economic Co
   95  operation and Development as a tax haven or as having a harmful
   96  preferential tax regime; or
   97         2.a.Is a jurisdiction that does not impose or imposes only
   98  a nominal, effective tax on relevant income;
   99         b.Has laws or practices that prevent the effective
  100  exchange of information for tax purposes with other governments
  101  regarding taxpayers who are subject to, or benefiting from, the
  102  tax regime;
  103         c.Lacks transparency;
  104         d.Facilitates the establishment of foreign-owned entities
  105  without the need for a local substantive presence or prohibits
  106  these entities from having any commercial impact on the local
  107  economy;
  108         e.Explicitly or implicitly excludes the jurisdiction's
  109  resident taxpayers from taking advantage of the tax regime's
  110  benefits or prohibits enterprises that benefit from the regime
  111  from operating in the jurisdiction's domestic market; or
  112         f.Has created a tax regime that is favorable for tax
  113  avoidance, based upon an overall assessment of relevant factors,
  114  including whether the jurisdiction has a significant untaxed
  115  offshore financial or other services sector relative to its
  116  overall economy.
  117  
  118  For purposes of this paragraph, a tax regime lacks transparency
  119  if the details of legislative, legal, or administrative
  120  requirements are not open to public scrutiny and apparent, or
  121  are not consistently applied among similarly situated taxpayers.
  122  As used in this paragraph, the term “tax regime” means a set or
  123  system of rules, laws, regulations, or practices by which taxes
  124  are imposed on any person, corporation, or entity, or on any
  125  income, property, incident, indicia, or activity pursuant to
  126  government authority.
  127         (hh)“Water’s edge group” means a group of corporations
  128  related through common ownership whose business activities are
  129  integrated with, dependent upon, or contribute to a flow of
  130  value among members of the group.
  131         Section 3. Subsection (1) of section 220.13, Florida
  132  Statutes, is amended to read:
  133         220.13 “Adjusted federal income” defined.—
  134         (1) The term “adjusted federal income” means an amount
  135  equal to the taxpayer's taxable income as defined in subsection
  136  (2), or such taxable income of more than one taxpayer as
  137  provided in s. 220.1363 s. 220.131, for the taxable year,
  138  adjusted as follows:
  139         (a) Additions.—There shall be added to such taxable income:
  140         1. The amount of any tax upon or measured by income,
  141  excluding taxes based on gross receipts or revenues, paid or
  142  accrued as a liability to the District of Columbia or any state
  143  of the United States which is deductible from gross income in
  144  the computation of taxable income for the taxable year.
  145         2. The amount of interest which is excluded from taxable
  146  income under s. 103(a) of the Internal Revenue Code or any other
  147  federal law, less the associated expenses disallowed in the
  148  computation of taxable income under s. 265 of the Internal
  149  Revenue Code or any other law, excluding 60 percent of any
  150  amounts included in alternative minimum taxable income, as
  151  defined in s. 55(b)(2) of the Internal Revenue Code, if the
  152  taxpayer pays tax under s. 220.11(3).
  153         3. In the case of a regulated investment company or real
  154  estate investment trust, an amount equal to the excess of the
  155  net long-term capital gain for the taxable year over the amount
  156  of the capital gain dividends attributable to the taxable year.
  157         4. That portion of the wages or salaries paid or incurred
  158  for the taxable year which is equal to the amount of the credit
  159  allowable for the taxable year under s. 220.181. This
  160  subparagraph shall expire on the date specified in s. 290.016
  161  for the expiration of the Florida Enterprise Zone Act.
  162         5. That portion of the ad valorem school taxes paid or
  163  incurred for the taxable year which is equal to the amount of
  164  the credit allowable for the taxable year under s. 220.182. This
  165  subparagraph shall expire on the date specified in s. 290.016
  166  for the expiration of the Florida Enterprise Zone Act.
  167         6. The amount of emergency excise tax paid or accrued as a
  168  liability to this state under chapter 221 which tax is
  169  deductible from gross income in the computation of taxable
  170  income for the taxable year.
  171         7. That portion of assessments to fund a guaranty
  172  association incurred for the taxable year which is equal to the
  173  amount of the credit allowable for the taxable year.
  174         8. In the case of a nonprofit corporation which holds a
  175  pari-mutuel permit and which is exempt from federal income tax
  176  as a farmers' cooperative, an amount equal to the excess of the
  177  gross income attributable to the pari-mutuel operations over the
  178  attributable expenses for the taxable year.
  179         9. The amount taken as a credit for the taxable year under
  180  s. 220.1895.
  181         10. Up to nine percent of the eligible basis of any
  182  designated project which is equal to the credit allowable for
  183  the taxable year under s. 220.185.
  184         11. The amount taken as a credit for the taxable year under
  185  s. 220.187.
  186         12. The amount taken as a credit for the taxable year under
  187  s. 220.192.
  188         13. The amount taken as a credit for the taxable year under
  189  s. 220.193.
  190         14. Any amount in excess of $25,000 allowable as a
  191  deduction for federal income tax purposes under s. 179 of the
  192  Internal Revenue Code of 1986, as amended, for the taxable year.
  193         15. Any amount allowable as a deduction for federal income
  194  tax purposes under s. 167 or s. 168 of the Internal Revenue Code
  195  of 1986, as amended, for the taxable year to the extent that
  196  such amount includes bonus depreciation allowable as deduction
  197  under s. 168(k).
  198         (b) Subtractions.—
  199         1. There shall be subtracted from such taxable income:
  200         a. The net operating loss deduction allowable for federal
  201  income tax purposes under s. 172 of the Internal Revenue Code
  202  for the taxable year,
  203         b. The net capital loss allowable for federal income tax
  204  purposes under s. 1212 of the Internal Revenue Code for the
  205  taxable year,
  206         c. The excess charitable contribution deduction allowable
  207  for federal income tax purposes under s. 170(d)(2) of the
  208  Internal Revenue Code for the taxable year, and
  209         d. The excess contributions deductions allowable for
  210  federal income tax purposes under s. 404 of the Internal Revenue
  211  Code for the taxable year.
  212  
  213  However, a net operating loss and a capital loss shall never be
  214  carried back as a deduction to a prior taxable year, but all
  215  deductions attributable to such losses shall be deemed net
  216  operating loss carryovers and capital loss carryovers,
  217  respectively, and treated in the same manner, to the same
  218  extent, and for the same time periods as are prescribed for such
  219  carryovers in ss. 172 and 1212, respectively, of the Internal
  220  Revenue Code. A deduction is not allowed for net operating
  221  losses, net capital losses, or excess contribution deductions
  222  under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404 for a member
  223  of a water's edge group that is not a United States member.
  224  Carryovers of net operating losses, net capital losses, or
  225  excess contribution deductions under 26 U.S.C. ss. 170(d)(2),
  226  172, 1212, and 404 may be subtracted only by the member of the
  227  water’s edge group that generates a carryover.
  228         2. There shall be subtracted from such taxable income any
  229  amount to the extent included therein the following:
  230         a. Dividends treated as received from sources without the
  231  United States, as determined under s. 862 of the Internal
  232  Revenue Code.
  233         b. All amounts included in taxable income under s. 78 or s.
  234  951 of the Internal Revenue Code.
  235  
  236  However, as to any amount subtracted under this subparagraph,
  237  there shall be added to such taxable income all expenses
  238  deducted on the taxpayer's return for the taxable year which are
  239  attributable, directly or indirectly, to such subtracted amount.
  240  Further, no amount shall be subtracted with respect to dividends
  241  paid or deemed paid by a Domestic International Sales
  242  Corporation.
  243         3.Amounts received by a member of a water's edge group as
  244  dividends paid by another member of the water's edge group shall
  245  be subtracted from the taxable income to the extent that the
  246  dividends are included in the taxable income.
  247         4.3. In computing “adjusted federal income” for taxable
  248  years beginning after December 31, 1976, there shall be allowed
  249  as a deduction the amount of wages and salaries paid or incurred
  250  within this state for the taxable year for which no deduction is
  251  allowed pursuant to s. 280C(a) of the Internal Revenue Code
  252  (relating to credit for employment of certain new employees).
  253         5.4. There shall be subtracted from such taxable income any
  254  amount of nonbusiness income included therein.
  255         6.5. There shall be subtracted any amount of taxes of
  256  foreign countries allowable as credits for taxable years
  257  beginning on or after September 1, 1985, under s. 901 of the
  258  Internal Revenue Code to any corporation which derived less than
  259  20 percent of its gross income or loss for its taxable year
  260  ended in 1984 from sources within the United States, as
  261  described in s. 861(a)(2)(A) of the Internal Revenue Code, not
  262  including credits allowed under ss. 902 and 960 of the Internal
  263  Revenue Code, withholding taxes on dividends within the meaning
  264  of sub-subparagraph 2.a., and withholding taxes on royalties,
  265  interest, technical service fees, and capital gains.
  266         7.6. Notwithstanding any other provision of this code,
  267  except with respect to amounts subtracted pursuant to
  268  subparagraphs 1. and 4. 3., any increment of any apportionment
  269  factor which is directly related to an increment of gross
  270  receipts or income which is deducted, subtracted, or otherwise
  271  excluded in determining adjusted federal income shall be
  272  excluded from both the numerator and denominator of such
  273  apportionment factor. Further, all valuations made for
  274  apportionment factor purposes shall be made on a basis
  275  consistent with the taxpayer's method of accounting for federal
  276  income tax purposes.
  277         (c) Installment sales occurring after October 19, 1980.—
  278         1. In the case of any disposition made after October 19,
  279  1980, the income from an installment sale shall be taken into
  280  account for the purposes of this code in the same manner that
  281  such income is taken into account for federal income tax
  282  purposes.
  283         2. Any taxpayer who regularly sells or otherwise disposes
  284  of personal property on the installment plan and reports the
  285  income therefrom on the installment method for federal income
  286  tax purposes under s. 453(a) of the Internal Revenue Code shall
  287  report such income in the same manner under this code.
  288         (d) Nonallowable deductions.—A deduction for net operating
  289  losses, net capital losses, or excess contributions deductions
  290  under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
  291  Code which has been allowed in a prior taxable year for Florida
  292  tax purposes shall not be allowed for Florida tax purposes,
  293  notwithstanding the fact that such deduction has not been fully
  294  utilized for federal tax purposes.
  295         Section 4. Section 220.136, Florida Statutes, is created to
  296  read:
  297         220.136Determination of the members of a water's edge
  298  group.—
  299         (1)MEMBERSHIP RULES.—
  300         (a)A corporation having 50 percent or more of its
  301  outstanding voting stock directly or indirectly owned or
  302  controlled by a water's edge group is presumed to be a member of
  303  the group. A corporation having less than 50 percent of its
  304  outstanding voting stock directly or indirectly controlled by a
  305  water's edge group is a member of the group if the businesses
  306  activities of the corporation show that the corporation is a
  307  member of the group. All of the income of a corporation that is
  308  a member of a water's edge group is presumed to be unitary.
  309         (b)A corporation that conducts business outside the United
  310  States is not a member of a water's edge group if 80 percent or
  311  more of the corporation’s property and payroll, as determined by
  312  the apportionment factors described in ss. 220.15 and 220.1363,
  313  may be assigned to locations outside the United States. However,
  314  such corporations that are incorporated in a tax haven may be a
  315  member of a water's edge group pursuant to paragraph (a). This
  316  paragraph does not exempt a corporation that is not a member of
  317  a water's edge group from the provisions of this chapter.
  318         (2)MEMBERSHIP EVALUATION CRITERIA.—
  319         (a)The attribution rules of 26 U.S.C. 318 shall be used to
  320  determine whether voting stock is owned indirectly.
  321         (b)As used in this paragraph, the term “United States”
  322  means the 50 states, the District of Columbia, and Puerto Rico.
  323         (c)The apportionment factors described in ss. 220.15 and
  324  220.1363 shall be used to determine whether a special industry
  325  corporation has engaged in a sufficient amount of activities
  326  outside the United States to exclude it from treatment as a
  327  member of a water's edge group.
  328         Section 5. Section 220.1363, Florida Statutes, is created
  329  to read:
  330         220.1363Water’s edge groups; special requirements.—
  331         (1)All members of a water’s edge group must use the
  332  water’s edge reporting method. Under the water’s edge reporting
  333  method:
  334         (a)Adjusted federal income for purposes of s. 220.12 means
  335  the sum of adjusted federal income for all members of the group
  336  as determined for a concurrent tax year.
  337         (b)The numerators and denominators of the apportionment
  338  factors shall be calculated for all members of the group
  339  combined.
  340         (c)Intercompany sales transactions between members of the
  341  group are not included in the numerator or denominator of the
  342  sales factor pursuant to ss. 220.15 and 220.151, regardless of
  343  whether indicia of a sale exist. As used in this subsection, the
  344  term “sale” includes, but is not limited to, loans, payments for
  345  the use of intangibles, dividends, and management fees.
  346         (d)For sales of intangibles, including, but not limited
  347  to, accounts receivable, notes, bonds, and stock, which are made
  348  to entities outside of the group, only the net proceeds are
  349  included in the numerator and denominator of the sales factor.
  350         (e)Sales that are not allocated or apportioned to any
  351  taxing jurisdiction, otherwise known as "nowhere sales," may not
  352  be included in the numerator or denominator of the sales factor.
  353         (f)The income attributable to the Florida activities of a
  354  corporation that is exempt from taxation under Pub. L. No. 86
  355  272 is excluded from the apportionment factor numerators in the
  356  calculation of corporate income tax even if another member of
  357  the water’s edge group has nexus with Florida and is subject to
  358  tax.
  359         (g)For purposes of this section, the term “water’s edge
  360  reporting method” is a method to determine the taxable business
  361  profits of a group of entities conducting a unitary business.
  362  Under this method, the net income of the entities must be added
  363  together along with the additions and subtractions under s.
  364  220.13 and apportioned to this state as a single taxpayer under
  365  s. 220.15 and 220.151. However, each special industry member
  366  included in a water's edge group return, which would otherwise
  367  be permitted to use a special method of apportionment under s.
  368  220.151, shall convert its single-factor apportionment to a
  369  three-factor apportionment of property, payroll, and sales. The
  370  special industry member shall calculate the denominator of its
  371  property, payroll, and sales factors in the same manner as those
  372  denominators are calculated by members that are not a special
  373  industry member. The numerator of its sales, property, and
  374  payroll factors is the product of the denominator of each factor
  375  multiplied by the premiums or revenue-miles-factor ratio
  376  otherwise applicable under s. 220.151.
  377         (2)(a)A single water’s edge group return must be filed in
  378  the name and federal employer identification number of the
  379  parent corporation if the parent is a member of the group and
  380  has nexus with Florida. If the group does not have a parent
  381  corporation, if the parent corporation is not a member of the
  382  group, or if the parent corporation does not have nexus with
  383  Florida, the members of the group must choose a member subject
  384  to the Florida corporate income tax to file the return. The
  385  members of the group may not choose another member to file a
  386  corporate income tax return in subsequent years unless the
  387  filing member does not maintain nexus with Florida or remain a
  388  member of that group. The return must be signed by an authorized
  389  officer of the filing member as the agent for the group.
  390         (b)If members of a water's edge group have different tax
  391  years, the tax year of a majority of the members of the group is
  392  the tax year of the group. If the tax years of a majority of the
  393  members of a group do not correspond, the tax year of the member
  394  that must file the return for the group is the tax year of the
  395  group.
  396         (c)1.A member of a water's edge group having a tax year
  397  that does not correspond to the tax year of the group shall
  398  determine its income for inclusion on the tax return for the
  399  group. The member shall use:
  400         a.The precise amount of taxable income received during the
  401  months corresponding to the tax year of the group, if the
  402  precise amount can be readily determined from the member's books
  403  and records.
  404         b.The taxable income of the member converted to conform to
  405  the tax year of the group on the basis of the number of months
  406  falling within the tax year of the group. For example, if the
  407  tax year of the water's edge group is a calendar year and a
  408  member operates on a fiscal year ending on April 30, the income
  409  of the member shall include 8/12 of the income from the current
  410  tax year and 4/12 of the income from the preceding tax year.
  411  This method to determine the income of a member may be used only
  412  if the return can be timely filed after the end of the tax year
  413  of the group.
  414         c.The taxable income of the member during its tax year
  415  that ends within the tax year of the group.
  416         2.The method of determining the income of a member of a
  417  group whose tax year does not correspond to the tax year of the
  418  group may not change as long as the member remains a member of
  419  the group. The apportionment factors for the member must be
  420  applied to the income of the member for the tax year of the
  421  group.
  422         (3)(a)A water’s edge group return shall include a
  423  computational schedule that:
  424         1.Combines the federal income of all members of the
  425  water’s edge group;
  426         2.Shows all intercompany eliminations;
  427         3.Shows Florida additions and subtractions under s.
  428  220.13; and
  429         4.Shows the calculation of the combined apportionment
  430  factors.
  431         (b)A water’s edge group shall also file a domestic
  432  disclosure spreadsheet in addition to its return. The
  433  spreadsheet shall fully disclose:
  434         1.The income reported to each state;
  435         2.The state tax liability;
  436         3.The method used for apportioning or allocating income to
  437  the various states; and
  438         4.Other information required by the department by rule in
  439  order to determine the proper amount of tax due to each state
  440  and to identify the water’s edge group.
  441         (4)The department may adopt rules and forms to administer
  442  this section. The Legislature intends to grant the department
  443  extensive authority to adopt rules and forms describing and
  444  defining principles for determining the existence of a water’s
  445  edge business, definitions of common control, methods of
  446  reporting, and related forms, principles, and other definitions.
  447         Section 6. Section 220.14, Florida Statutes, is amended to
  448  read:
  449         220.14 Exemption.—
  450         (1) In computing a taxpayer's liability for tax under this
  451  code, there shall be exempt from the tax $5,000 of net income as
  452  defined in s. 220.12 or such lesser amount as will, without
  453  increasing the taxpayer's federal income tax liability, provide
  454  the state with an amount under this code which is equal to the
  455  maximum federal income tax credit which may be available from
  456  time to time under federal law.
  457         (2) In the case of a taxable year for a period of less than
  458  12 months, the exemption allowed by this section shall be
  459  prorated on the basis of the number of days in such year to 365,
  460  or in the case of a leap year, to 366.
  461         (3) Only one exemption shall be allowed to taxpayers filing
  462  a water's edge group a consolidated return under this code.
  463         (4) Notwithstanding any other provision of this code, not
  464  more than one exemption under this section may be allowed to the
  465  Florida members of a controlled group of corporations, as
  466  defined in s. 1563 of the Internal Revenue Code with respect to
  467  taxable years ending on or after December 31, 1970, filing
  468  separate returns under this code. The exemption described in
  469  this section shall be divided equally among such Florida members
  470  of the group, unless all of such members consent, at such time
  471  and in such manner as the department shall by regulation
  472  prescribe, to an apportionment plan providing for an unequal
  473  allocation of such exemption.
  474         Section 7. Subsection (5) of section 220.15, Florida
  475  Statutes, is amended to read:
  476         220.15 Apportionment of adjusted federal income.—
  477         (5) The sales factor is a fraction the numerator of which
  478  is the total sales of the taxpayer in this state during the
  479  taxable year or period and the denominator of which is the total
  480  sales of the taxpayer everywhere during the taxable year or
  481  period.
  482         (a) As used in this subsection, the term “sales” means all
  483  gross receipts of the taxpayer except interest, dividends,
  484  rents, royalties, and gross receipts from the sale, exchange,
  485  maturity, redemption, or other disposition of securities.
  486  However:
  487         1. Rental income is included in the term if a significant
  488  portion of the taxpayer's business consists of leasing or
  489  renting real or tangible personal property; and
  490         2. Royalty income is included in the term if a significant
  491  portion of the taxpayer's business consists of dealing in or
  492  with the production, exploration, or development of minerals.
  493         (b)1. Sales of tangible personal property occur in this
  494  state if the property is delivered or shipped to a purchaser
  495  within this state, regardless of the f.o.b. point, other
  496  conditions of the sale, or ultimate destination of the property,
  497  unless shipment is made via a common or contract carrier.
  498  However, for industries in SIC Industry Number 2037, if the
  499  ultimate destination of the product is to a location outside
  500  this state, regardless of the method of shipment or f.o.b.
  501  point, the sale shall not be deemed to occur in this state.
  502         2. When citrus fruit is delivered by a cooperative for a
  503  grower-member, by a grower-member to a cooperative, or by a
  504  grower-participant to a Florida processor, the sales factor for
  505  the growers for such citrus fruit delivered to such processor
  506  shall be the same as the sales factor for the most recent
  507  taxable year of that processor. That sales factor, expressed
  508  only as a percentage and not in terms of the dollar volume of
  509  sales, so as to protect the confidentiality of the sales of the
  510  processor, shall be furnished on the request of such a grower
  511  promptly after it has been determined for that taxable year.
  512         3. Reimbursement of expenses under an agency contract
  513  between a cooperative, a grower-member of a cooperative, or a
  514  grower and a processor is not a sale within this state.
  515         (c) Sales of a financial organization, including, but not
  516  limited to, banking and savings institutions, investment
  517  companies, real estate investment trusts, and brokerage
  518  companies, occur in this state if derived from:
  519         1. Fees, commissions, or other compensation for financial
  520  services rendered within this state;
  521         2. Gross profits from trading in stocks, bonds, or other
  522  securities managed within this state;
  523         3. Interest received within this state, other than interest
  524  from loans secured by mortgages, deeds of trust, or other liens
  525  upon real or tangible personal property located without this
  526  state, and dividends received within this state;
  527         4. Interest charged to customers at places of business
  528  maintained within this state for carrying debit balances of
  529  margin accounts, without deduction of any costs incurred in
  530  carrying such accounts;
  531         5. Interest, fees, commissions, or other charges or gains
  532  from loans secured by mortgages, deeds of trust, or other liens
  533  upon real or tangible personal property located in this state or
  534  from installment sale agreements originally executed by a
  535  taxpayer or the taxpayer's agent to sell real or tangible
  536  personal property located in this state;
  537         6. Rents from real or tangible personal property located in
  538  this state; or
  539         7. Any other gross income, including other interest,
  540  resulting from the operation as a financial organization within
  541  this state.
  542  
  543  In computing the amounts under this paragraph, any amount
  544  received by a member of an affiliated group (determined under s.
  545  1504(a) of the Internal Revenue Code, but without reference to
  546  whether any such corporation is an “includable corporation”
  547  under s. 1504(b) of the Internal Revenue Code) from another
  548  member of such group shall be included only to the extent such
  549  amount exceeds expenses of the recipient directly related
  550  thereto.
  551         Section 8. Subsection (1) of section 220.183, Florida
  552  Statutes, is amended to read:
  553         220.183 Community contribution tax credit.—
  554         (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
  555  CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
  556  SPENDING.—
  557         (a) There shall be allowed a credit of 50 percent of a
  558  community contribution against any tax due for a taxable year
  559  under this chapter.
  560         (b) No business firm shall receive more than $200,000 in
  561  annual tax credits for all approved community contributions made
  562  in any one year.
  563         (c) The total amount of tax credit which may be granted for
  564  all programs approved under this section, s. 212.08(5)(p), and
  565  s. 624.5105 is $10.5 million annually for projects that provide
  566  homeownership opportunities for low-income or very-low-income
  567  households as defined in s. 420.9071(19) and (28) and $3.5
  568  million annually for all other projects.
  569         (d) All proposals for the granting of the tax credit shall
  570  require the prior approval of the Office of Tourism, Trade, and
  571  Economic Development.
  572         (e) If the credit granted pursuant to this section is not
  573  fully used in any one year because of insufficient tax liability
  574  on the part of the business firm, the unused amount may be
  575  carried forward for a period not to exceed 5 years. The
  576  carryover credit may be used in a subsequent year when the tax
  577  imposed by this chapter for such year exceeds the credit for
  578  such year under this section after applying the other credits
  579  and unused credit carryovers in the order provided in s.
  580  220.02(8).
  581         (f)A taxpayer who files a Florida consolidated return as a
  582  member of an affiliated group pursuant to s. 220.131(1) may be
  583  allowed the credit on a consolidated return basis.
  584         (f)(g) A taxpayer who is eligible to receive the credit
  585  provided for in s. 624.5105 is not eligible to receive the
  586  credit provided by this section.
  587         (g)(h) Notwithstanding paragraph (c), and for the 2008-2009
  588  fiscal year only, the total amount of tax credit which may be
  589  granted for all programs approved under this section, s.
  590  212.08(5)(p), and s. 624.5105 is $13 million annually for
  591  projects that provide homeownership opportunities for low-income
  592  or very-low-income households as defined in s. 420.9071(19) and
  593  (28) and $3.5 million annually for all other projects. This
  594  paragraph expires June 30, 2009.
  595         Section 9. Subsection (1) of section 220.1845, Florida
  596  Statutes, is amended to read:
  597         220.1845 Contaminated site rehabilitation tax credit.—
  598         (1) AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.—
  599         (a) A credit in the amount of 50 percent of the costs of
  600  voluntary cleanup activity that is integral to site
  601  rehabilitation at the following sites is available against any
  602  tax due for a taxable year under this chapter:
  603         1. A drycleaning-solvent-contaminated site eligible for
  604  state-funded site rehabilitation under s. 376.3078(3);
  605         2. A drycleaning-solvent-contaminated site at which site
  606  rehabilitation is undertaken by the real property owner pursuant
  607  to s. 376.3078(11), if the real property owner is not also, and
  608  has never been, the owner or operator of the drycleaning
  609  facility where the contamination exists; or
  610         3. A brownfield site in a designated brownfield area under
  611  s. 376.80.
  612         (b) A tax credit applicant, or multiple tax credit
  613  applicants working jointly to clean up a single site, may not be
  614  granted more than $500,000 per year in tax credits for each site
  615  voluntarily rehabilitated. Multiple tax credit applicants shall
  616  be granted tax credits in the same proportion as their
  617  contribution to payment of cleanup costs. Subject to the same
  618  conditions and limitations as provided in this section, a
  619  municipality, county, or other tax credit applicant which
  620  voluntarily rehabilitates a site may receive not more than
  621  $500,000 per year in tax credits which it can subsequently
  622  transfer subject to the provisions in paragraph (f) (g).
  623         (c) If the credit granted under this section is not fully
  624  used in any one year because of insufficient tax liability on
  625  the part of the corporation, the unused amount may be carried
  626  forward for up to 5 years. The carryover credit may be used in a
  627  subsequent year if the tax imposed by this chapter for that year
  628  exceeds the credit for which the corporation is eligible in that
  629  year after applying the other credits and unused carryovers in
  630  the order provided by s. 220.02(8). If during the 5-year period
  631  the credit is transferred, in whole or in part, pursuant to
  632  paragraph (g), each transferee has 5 years after the date of
  633  transfer to use its credit.
  634         (d)A taxpayer that files a consolidated return in this
  635  state as a member of an affiliated group under s. 220.131(1) may
  636  be allowed the credit on a consolidated return basis up to the
  637  amount of tax imposed upon the consolidated group.
  638         (d)(e) A tax credit applicant that receives state-funded
  639  site rehabilitation under s. 376.3078(3) for rehabilitation of a
  640  drycleaning-solvent-contaminated site is ineligible to receive
  641  credit under this section for costs incurred by the tax credit
  642  applicant in conjunction with the rehabilitation of that site
  643  during the same time period that state-administered site
  644  rehabilitation was underway.
  645         (e)(f) The total amount of the tax credits which may be
  646  granted under this section is $2 million annually.
  647         (f)(g)1. Tax credits that may be available under this
  648  section to an entity eligible under s. 376.30781 may be
  649  transferred after a merger or acquisition to the surviving or
  650  acquiring entity and used in the same manner and with the same
  651  limitations.
  652         2. The entity or its surviving or acquiring entity as
  653  described in subparagraph 1., may transfer any unused credit in
  654  whole or in units of at least 25 percent of the remaining
  655  credit. The entity acquiring such credit may use it in the same
  656  manner and with the same limitation as described in this
  657  section. Such transferred credits may not be transferred again
  658  although they may succeed to a surviving or acquiring entity
  659  subject to the same conditions and limitations as described in
  660  this section.
  661         3. If the credit is reduced due to a determination by the
  662  Department of Environmental Protection or an examination or
  663  audit by the Department of Revenue, the tax deficiency shall be
  664  recovered from the first entity, or the surviving or acquiring
  665  entity that claimed the credit up to the amount of credit taken.
  666  Any subsequent deficiencies shall be assessed against the entity
  667  acquiring and claiming the credit, or in the case of multiple
  668  succeeding entities in the order of credit succession.
  669         (g)(h) In order to encourage completion of site
  670  rehabilitation at contaminated sites being voluntarily cleaned
  671  up and eligible for a tax credit under this section, the tax
  672  credit applicant may claim an additional 25 percent of the total
  673  cleanup costs, not to exceed $500,000, in the final year of
  674  cleanup as evidenced by the Department of Environmental
  675  Protection issuing a “No Further Action” order for that site.
  676         (h)(i) In order to encourage the construction of housing
  677  that meets the definition of affordable provided in s. 420.0004,
  678  an applicant for the tax credit may claim an additional 25
  679  percent of the total site rehabilitation costs that are eligible
  680  for tax credits under this section, not to exceed $500,000. In
  681  order to receive this additional tax credit, the applicant must
  682  provide a certification letter from the Florida Housing Finance
  683  Corporation, the local housing authority, or other governmental
  684  agency that is a party to the use agreement indicating that the
  685  construction on the brownfield site has received a certificate
  686  of occupancy and the brownfield site has a properly recorded
  687  instrument that limits the use of the property to housing that
  688  meets the definition of affordable provided in s. 420.0004.
  689         (i)(j) In order to encourage the redevelopment of a
  690  brownfield site, as defined in the brownfield site
  691  rehabilitation agreement, that is hindered by the presence of
  692  solid waste, as defined in s. 403.703, a tax credit applicant,
  693  or multiple tax credit applicants working jointly to clean up a
  694  single brownfield site, may also claim costs required to address
  695  solid waste removal as defined in this paragraph in accordance
  696  with rules of the Department of Environmental Protection.
  697  Multiple tax credit applicants shall be granted tax credits in
  698  the same proportion as each applicant's contribution to payment
  699  of solid waste removal costs. These costs are eligible for a tax
  700  credit provided the applicant submits an affidavit stating that,
  701  after consultation with appropriate local government officials
  702  and the Department of Environmental Protection, to the best of
  703  the applicant's knowledge according to such consultation and
  704  available historical records, the brownfield site was never
  705  operated as a permitted solid waste disposal area or was never
  706  operated for monetary compensation and the applicant submits all
  707  other documentation and certifications required by this section.
  708  Under this section, wherever reference is made to “site
  709  rehabilitation,” the Department of Environmental Protection
  710  shall instead consider whether or not the costs claimed are for
  711  solid waste removal. Tax credit applications claiming costs
  712  pursuant to this paragraph shall not be subject to the calendar
  713  year limitation and January 31 annual application deadline, and
  714  the Department of Environmental Protection shall accept a one
  715  time application filed subsequent to the completion by the tax
  716  credit applicant of the applicable requirements listed in this
  717  section. A tax credit applicant may claim 50 percent of the cost
  718  for solid waste removal, not to exceed $500,000, after the
  719  applicant has determined solid waste removal is completed for
  720  the brownfield site. A solid waste removal tax credit
  721  application may be filed only once per brownfield site. For the
  722  purposes of this section, the term:
  723         1. “Solid waste disposal area” means a landfill, dump, or
  724  other area where solid waste has been disposed of.
  725         2. “Monetary compensation” means the fees that were charged
  726  or the assessments that were levied for the disposal of solid
  727  waste at a solid waste disposal area.
  728         3. “Solid waste removal” means removal of solid waste from
  729  the land surface or excavation of solid waste from below the
  730  land surface and removal of the solid waste from the brownfield
  731  site. The term also includes:
  732         a. Transportation of solid waste to a licensed or exempt
  733  solid waste management facility or to a temporary storage area.
  734         b. Sorting or screening of solid waste prior to removal
  735  from the site.
  736         c. Deposition of solid waste at a permitted or exempt solid
  737  waste management facility, whether the solid waste is disposed
  738  of or recycled.
  739         (j)(k) In order to encourage the construction and operation
  740  of a new health care facility as defined in s. 408.032 or s.
  741  408.07, or a health care provider as defined in s. 408.07 or s.
  742  408.7056, on a brownfield site, an applicant for a tax credit
  743  may claim an additional 25 percent of the total site
  744  rehabilitation costs, not to exceed $500,000, if the applicant
  745  meets the requirements of this paragraph. In order to receive
  746  this additional tax credit, the applicant must provide
  747  documentation indicating that the construction of the health
  748  care facility or health care provider by the applicant on the
  749  brownfield site has received a certificate of occupancy or a
  750  license or certificate has been issued for the operation of the
  751  health care facility or health care provider.
  752         Section 10. Subsection (5) of section 220.187, Florida
  753  Statutes, is amended to read:
  754         220.187 Credits for contributions to nonprofit scholarship
  755  funding organizations.—
  756         (5) AUTHORIZATION TO GRANT SCHOLARSHIP FUNDING TAX CREDITS;
  757  LIMITATIONS ON INDIVIDUAL AND TOTAL CREDITS.—
  758         (a) There is allowed a credit of 100 percent of an eligible
  759  contribution against any tax due for a taxable year under this
  760  chapter. However, such a credit may not exceed 75 percent of the
  761  tax due under this chapter for the taxable year, after the
  762  application of any other allowable credits by the taxpayer. The
  763  credit granted by this section shall be reduced by the
  764  difference between the amount of federal corporate income tax
  765  taking into account the credit granted by this section and the
  766  amount of federal corporate income tax without application of
  767  the credit granted by this section.
  768         (b) The total amount of tax credits and carryforward of tax
  769  credits which may be granted each state fiscal year under this
  770  section is:
  771         1. Through June 30, 2008, $88 million.
  772         2. Beginning July 1, 2008, and thereafter, $118 million.
  773         (c)A taxpayer who files a Florida consolidated return as a
  774  member of an affiliated group pursuant to s. 220.131(1) may be
  775  allowed the credit on a consolidated return basis; however, the
  776  total credit taken by the affiliated group is subject to the
  777  limitation established under paragraph (a).
  778         (c)(d) Effective for tax years beginning January 1, 2006, a
  779  taxpayer may rescind all or part of its allocated tax credit
  780  under this section. The amount rescinded shall become available
  781  for purposes of the cap for that state fiscal year under this
  782  section to an eligible taxpayer as approved by the department if
  783  the taxpayer receives notice from the department that the
  784  rescindment has been accepted by the department and the taxpayer
  785  has not previously rescinded any or all of its tax credit
  786  allocation under this section more than once in the previous 3
  787  tax years. Any amount rescinded under this paragraph shall
  788  become available to an eligible taxpayer on a first-come, first
  789  served basis based on tax credit applications received after the
  790  date the rescindment is accepted by the department.
  791         Section 11. Subsection (3) of section 220.191, Florida
  792  Statutes, is amended to read:
  793         220.191 Capital investment tax credit.—
  794         (3)(a) Notwithstanding subsection (2), an annual credit
  795  against the tax imposed by this chapter shall be granted to a
  796  qualifying business which establishes a qualifying project
  797  pursuant to subparagraph (1)(h)3., in an amount equal to the
  798  lesser of $15 million or 5 percent of the eligible capital costs
  799  made in connection with a qualifying project, for a period not
  800  to exceed 20 years beginning with the commencement of operations
  801  of the project. The tax credit shall be granted against the
  802  corporate income tax liability of the qualifying business and as
  803  further provided in paragraph (c). The total tax credit provided
  804  pursuant to this subsection shall be equal to no more than 100
  805  percent of the eligible capital costs of the qualifying project.
  806         (b) If the credit granted under this subsection is not
  807  fully used in any one year because of insufficient tax liability
  808  on the part of the qualifying business, the unused amount may be
  809  carried forward for a period not to exceed 20 years after the
  810  commencement of operations of the project. The carryover credit
  811  may be used in a subsequent year when the tax imposed by this
  812  chapter for that year exceeds the credit for which the
  813  qualifying business is eligible in that year under this
  814  subsection after applying the other credits and unused
  815  carryovers in the order provided by s. 220.02(8).
  816         (c) The credit granted under this subsection may be used in
  817  whole or in part by the qualifying business or any corporation
  818  that is either a member of that qualifying business's affiliated
  819  group of corporations, is a related entity taxable as a
  820  cooperative under subchapter T of the Internal Revenue Code, or,
  821  if the qualifying business is an entity taxable as a cooperative
  822  under subchapter T of the Internal Revenue Code, is related to
  823  the qualifying business. Any entity related to the qualifying
  824  business may continue to file as a member of a Florida-nexus
  825  consolidated group pursuant to a prior election made under s.
  826  220.131(1), Florida Statutes (1985), even if the parent of the
  827  group changes due to a direct or indirect acquisition of the
  828  former common parent of the group. Any credit can be used by any
  829  of the affiliated companies or related entities referenced in
  830  this paragraph to the same extent as it could have been used by
  831  the qualifying business. However, any such use shall not operate
  832  to increase the amount of the credit or extend the period within
  833  which the credit must be used.
  834         Section 12. Subsection (2) of section 220.192, Florida
  835  Statutes, is amended to read:
  836         220.192 Renewable energy technologies investment tax
  837  credit.—
  838         (2) TAX CREDIT.—For tax years beginning on or after January
  839  1, 2007, a credit against the tax imposed by this chapter shall
  840  be granted in an amount equal to the eligible costs. Credits may
  841  be used in tax years beginning January 1, 2007, and ending
  842  December 31, 2010, after which the credit shall expire. If the
  843  credit is not fully used in any one tax year because of
  844  insufficient tax liability on the part of the corporation, the
  845  unused amount may be carried forward and used in tax years
  846  beginning January 1, 2007, and ending December 31, 2012, after
  847  which the credit carryover expires and may not be used. A
  848  taxpayer that files a consolidated return in this state as a
  849  member of an affiliated group under s. 220.131(1) may be allowed
  850  the credit on a consolidated return basis up to the amount of
  851  tax imposed upon the consolidated group. Any eligible cost for
  852  which a credit is claimed and which is deducted or otherwise
  853  reduces federal taxable income shall be added back in computing
  854  adjusted federal income under s. 220.13.
  855         Section 13. Subsection (3) of section 220.193, Florida
  856  Statutes, is amended to read:
  857         220.193 Florida renewable energy production credit.—
  858         (3) An annual credit against the tax imposed by this
  859  section shall be allowed to a taxpayer, based on the taxpayer's
  860  production and sale of electricity from a new or expanded
  861  Florida renewable energy facility. For a new facility, the
  862  credit shall be based on the taxpayer's sale of the facility's
  863  entire electrical production. For an expanded facility, the
  864  credit shall be based on the increases in the facility's
  865  electrical production that are achieved after May 1, 2006.
  866         (a) The credit shall be $0.01 for each kilowatt-hour of
  867  electricity produced and sold by the taxpayer to an unrelated
  868  party during a given tax year.
  869         (b) The credit may be claimed for electricity produced and
  870  sold on or after January 1, 2007. Beginning in 2008 and
  871  continuing until 2011, each taxpayer claiming a credit under
  872  this section must first apply to the department by February 1 of
  873  each year for an allocation of available credit. The department,
  874  in consultation with the commission, shall develop an
  875  application form. The application form shall, at a minimum,
  876  require a sworn affidavit from each taxpayer certifying the
  877  increase in production and sales that form the basis of the
  878  application and certifying that all information contained in the
  879  application is true and correct.
  880         (c) If the amount of credits applied for each year exceeds
  881  $5 million, the department shall award to each applicant a
  882  prorated amount based on each applicant's increased production
  883  and sales and the increased production and sales of all
  884  applicants.
  885         (d) If the credit granted pursuant to this section is not
  886  fully used in one year because of insufficient tax liability on
  887  the part of the taxpayer, the unused amount may be carried
  888  forward for a period not to exceed 5 years. The carryover credit
  889  may be used in a subsequent year when the tax imposed by this
  890  chapter for such year exceeds the credit for such year, after
  891  applying the other credits and unused credit carryovers in the
  892  order provided in s. 220.02(8).
  893         (e)A taxpayer that files a consolidated return in this
  894  state as a member of an affiliated group under s. 220.131(1) may
  895  be allowed the credit on a consolidated return basis up to the
  896  amount of tax imposed upon the consolidated group.
  897         (e)(f)1. Tax credits that may be available under this
  898  section to an entity eligible under this section may be
  899  transferred after a merger or acquisition to the surviving or
  900  acquiring entity and used in the same manner with the same
  901  limitations.
  902         2. The entity or its surviving or acquiring entity as
  903  described in subparagraph 1. may transfer any unused credit in
  904  whole or in units of no less than 25 percent of the remaining
  905  credit. The entity acquiring such credit may use it in the same
  906  manner and with the same limitations under this section. Such
  907  transferred credits may not be transferred again although they
  908  may succeed to a surviving or acquiring entity subject to the
  909  same conditions and limitations as described in this section.
  910         3. In the event the credit provided for under this section
  911  is reduced as a result of an examination or audit by the
  912  department, such tax deficiency shall be recovered from the
  913  first entity or the surviving or acquiring entity to have
  914  claimed such credit up to the amount of credit taken. Any
  915  subsequent deficiencies shall be assessed against any entity
  916  acquiring and claiming such credit, or in the case of multiple
  917  succeeding entities in the order of credit succession.
  918         (f)(g) Notwithstanding any other provision of this section,
  919  credits for the production and sale of electricity from a new or
  920  expanded Florida renewable energy facility may be earned between
  921  January 1, 2007, and June 30, 2010. The combined total amount of
  922  tax credits which may be granted for all taxpayers under this
  923  section is limited to $5 million per state fiscal year.
  924         (g)(h) A taxpayer claiming a credit under this section
  925  shall be required to add back to net income that portion of its
  926  business deductions claimed on its federal return paid or
  927  incurred for the taxable year which is equal to the amount of
  928  the credit allowable for the taxable year under this section.
  929         (h)(i) A taxpayer claiming credit under this section may
  930  not claim a credit under s. 220.192. A taxpayer claiming credit
  931  under s. 220.192 may not claim a credit under this section.
  932         (i)(j) When an entity treated as a partnership or a
  933  disregarded entity under this chapter produces and sells
  934  electricity from a new or expanded renewable energy facility,
  935  the credit earned by such entity shall pass through in the same
  936  manner as items of income and expense pass through for federal
  937  income tax purposes. When an entity applies for the credit and
  938  the entity has received the credit by a pass-through, the
  939  application must identify the taxpayer that passed the credit
  940  through, all taxpayers that received the credit, and the
  941  percentage of the credit that passes through to each recipient
  942  and must provide other information that the department requires.
  943         (j)(k) A taxpayer's use of the credit granted pursuant to
  944  this section does not reduce the amount of any credit available
  945  to such taxpayer under s. 220.186.
  946         Section 14. Section 220.51, Florida Statutes, is amended to
  947  read:
  948         220.51 Promulgation of rules and regulations.—In accordance
  949  with the Administrative Procedure Act, chapter 120, the
  950  department is authorized to make, promulgate, and enforce such
  951  reasonable rules and regulations, and to prescribe such forms
  952  relating to the administration and enforcement of the provisions
  953  of this code, as it may deem appropriate, including:
  954         (1) Rules for initial implementation of this code and for
  955  taxpayers' transitional taxable years commencing before and
  956  ending after January 1, 1972; and
  957         (2) Rules or regulations to clarify whether certain groups,
  958  organizations, or associations formed under the laws of this
  959  state or any other state, country, or jurisdiction shall be
  960  deemed “taxpayers” for the purposes of this code, in accordance
  961  with the legislative declarations of intent in s. 220.02.; and
  962         (3)Regulations relating to consolidated reporting for
  963  affiliated groups of corporations, in order to provide for an
  964  equitable and just administration of this code with respect to
  965  multicorporate taxpayers.
  966         Section 15. Section 220.64, Florida Statutes, is amended to
  967  read:
  968         220.64 Other provisions applicable to franchise tax.—To the
  969  extent that they are not manifestly incompatible with the
  970  provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
  971  X of this code and ss. 220.12, 220.13, 220.136, 220.1363,
  972  220.15, and 220.16 ss. 220.12, 220.13, 220.15, and 220.16 apply
  973  to the franchise tax imposed by this part. Under rules
  974  prescribed in s. 220.131, a consolidated return may be filed by
  975  any affiliated group of corporations composed of one or more
  976  banks or savings associations, its or their Florida parent
  977  corporation, and any nonbank or nonsavings subsidiaries of such
  978  parent corporation.
  979         Section 16. Transitional rules.—
  980         (1)For the first tax year beginning on or after January 1,
  981  2010, a taxpayer that filed a Florida corporate income tax
  982  return in the preceding tax year and is a member of a water’s
  983  edge group shall compute its income together with all members of
  984  its water’s edge group and file a combined Florida corporate
  985  income tax return with all members of its water’s edge group.
  986         (2)An affiliated group of corporations that filed a
  987  Florida consolidated corporate income tax return pursuant to an
  988  election provided in s. 220.131, Florida Statutes, shall cease
  989  filing a Florida consolidated return for tax years beginning on
  990  or after January 1, 2010, and shall file a combined Florida
  991  corporate income tax return with all members of its water’s edge
  992  group.
  993         (3)An affiliated group of corporations that filed a
  994  Florida consolidated corporate income tax return pursuant to the
  995  election in s. 220.131(1), Florida Statutes (1985), which
  996  allowed the affiliated group to make an election within 90 days
  997  after December 20, 1984, or upon filing the taxpayer’s first
  998  return after December 20, 1984, whichever is later, shall cease
  999  filing a Florida consolidated corporate income tax return using
 1000  that method for tax years beginning on or after January 1, 2010,
 1001  and shall file a combined Florida corporate income tax return
 1002  with all members of its water’s edge group.
 1003         (4)Taxpayers that are not members of a water's edge group
 1004  remain subject to chapter 220, Florida Statutes, and shall file
 1005  a separate Florida corporate income tax return as previously
 1006  required.
 1007         (5)For the tax years beginning on or after January 1,
 1008  2010, a tax return for a member of a water's edge group must be
 1009  a combined Florida corporate income tax return that includes tax
 1010  information for all members of the water's edge group. The tax
 1011  return must be filed by a member that has a nexus with Florida.
 1012         Section 17. Of the funds recaptured pursuant to this act,
 1013  the sum of $50 million is appropriated from the General Revenue
 1014  Fund to the State University System for workforce education, to
 1015  be allocated by the Board of Governors; the sum of $50 million
 1016  is appropriated from the General Revenue Fund to community
 1017  colleges for workforce education, to be allocated by the State
 1018  Board of Education; and the remainder of such funds, as
 1019  determined by the Revenue Estimating Conference, shall be
 1020  appropriated from the General Revenue Fund and allocated as
 1021  provided in the General Appropriations Act to the various school
 1022  districts to reduce the required local effort millage.
 1023         Section 18. Section 220.131, Florida Statutes, is repealed.
 1024         Section 19. This act shall take effect July 1, 2009.