Florida Senate - 2011 COMMITTEE AMENDMENT Bill No. SB 942 Barcode 263742 LEGISLATIVE ACTION Senate . House . . . . . ————————————————————————————————————————————————————————————————— ————————————————————————————————————————————————————————————————— The Committee on Budget Subcommittee on Finance and Tax (Bogdanoff) recommended the following: 1 Senate Amendment (with title amendment) 2 3 Delete everything after the enacting clause 4 and insert: 5 Section 1. Paragraph (a) of subsection (1) of section 6 220.13, Florida Statutes, is amended to read: 7 220.13 “Adjusted federal income” defined.— 8 (1) The term “adjusted federal income” means an amount 9 equal to the taxpayer’s taxable income as defined in subsection 10 (2), or such taxable income of more than one taxpayer as 11 provided in s. 220.131, for the taxable year, adjusted as 12 follows: 13 (a) Additions.—There shall be added to such taxable income: 14 1. The amount of any tax upon or measured by income, 15 excluding taxes based on gross receipts or revenues, paid or 16 accrued as a liability to the District of Columbia or any state 17 of the United States which is deductible from gross income in 18 the computation of taxable income for the taxable year. 19 2. The amount of interest which is excluded from taxable 20 income under s. 103(a) of the Internal Revenue Code or any other 21 federal law, less the associated expenses disallowed in the 22 computation of taxable income under s. 265 of the Internal 23 Revenue Code or any other law, excluding 60 percent of any 24 amounts included in alternative minimum taxable income, as 25 defined in s. 55(b)(2) of the Internal Revenue Code, if the 26 taxpayer pays tax under s. 220.11(3). 27 3. In the case of a regulated investment company or real 28 estate investment trust, an amount equal to the excess of the 29 net long-term capital gain for the taxable year over the amount 30 of the capital gain dividends attributable to the taxable year. 31 4. That portion of the wages or salaries paid or incurred 32 for the taxable year which is equal to the amount of the credit 33 allowable for the taxable year under s. 220.181. This 34 subparagraph shall expire on the date specified in s. 290.016 35 for the expiration of the Florida Enterprise Zone Act. 36 5. That portion of the ad valorem school taxes paid or 37 incurred for the taxable year which is equal to the amount of 38 the credit allowable for the taxable year under s. 220.182. This 39 subparagraph shall expire on the date specified in s. 290.016 40 for the expiration of the Florida Enterprise Zone Act. 41 6. The amount of emergency excise tax paid or accrued as a 42 liability to this state under chapter 221 which tax is 43 deductible from gross income in the computation of taxable 44 income for the taxable year. 45 7. That portion of assessments to fund a guaranty 46 association incurred for the taxable year which is equal to the 47 amount of the credit allowable for the taxable year. 48 8. In the case of a nonprofit corporation which holds a 49 pari-mutuel permit and which is exempt from federal income tax 50 as a farmers’ cooperative, an amount equal to the excess of the 51 gross income attributable to the pari-mutuel operations over the 52 attributable expenses for the taxable year. 53 9. The amount taken as a credit for the taxable year under 54 s. 220.1895. 55 10. Up to nine percent of the eligible basis of any 56 designated project which is equal to the credit allowable for 57 the taxable year under s. 220.185. 58 11. The amount taken as a credit for the taxable year under 59 s. 220.1875. The addition in this subparagraph is intended to 60 ensure that the same amount is not allowed for the tax purposes 61 of this state as both a deduction from income and a credit 62 against the tax. This addition is not intended to result in 63 adding the same expense back to income more than once. 64 12. The amount taken as a credit for the taxable year under 65 s. 220.192. 66 13. The amount taken as a credit for the taxable year under 67 s. 220.193. 68 14. Any portion of a qualified investment, as defined in s. 69 288.9913, which is claimed as a deduction by the taxpayer and 70 taken as a credit against income tax pursuant to s. 288.9916. 71 15. The costs to acquire a tax credit pursuant to s. 72 288.1254(5) that are deducted from or otherwise reduce federal 73 taxable income for the taxable year. 74 16. The amount taken as a credit for the taxable year under 75 s. 220.194. 76 Section 2. Section 220.194, Florida Statutes, is created to 77 read: 78 220.194 Research and development tax credit.— 79 (1) DEFINITIONS.—As used in this section, the term: 80 (a) “Base amount” means the average of the business 81 enterprise’s qualified research expenses in this state allowed 82 under 26 U.S.C. s. 41 for the 4 taxable years preceding the 83 taxable year for which the credit is determined. The qualified 84 research expenses taken into account in computing the base 85 amount shall be determined on a basis consistent with the 86 determination of qualified research expenses for the taxable 87 year. 88 (b) “Business enterprise” means any corporation as defined 89 in s. 220.03 which meets the definition of a target industry 90 business as defined in s. 288.106. 91 (c) “Qualified research expenses” mean research expenses 92 qualifying for the credit under 26 U.S.C. s. 41 for in-house 93 research expenses incurred in this state or contract research 94 expenses incurred in this state. The term does not include 95 research conducted outside this state or research expenses that 96 do not qualify for a credit under 26 U.S.C. s. 41. 97 (2) TAX CREDIT.—Subject to the limitations contained in 98 paragraph (e), a business enterprise is eligible for a credit 99 against the tax imposed by this chapter if the business 100 enterprise has qualified research expenses in this state in the 101 taxable year exceeding the base amount and, for the same taxable 102 year, claims and is allowed a research credit for such qualified 103 research expenses under 26 U.S.C. s. 41. 104 (a) The tax credit shall be 10 percent of the excess 105 qualified research expenses over the base amount. However, the 106 maximum tax credit for a business enterprise that has not been 107 in existence for at least 4 taxable years immediately preceding 108 the taxable year is reduced by 25 percent for each taxable year 109 for which the business enterprise, or a predecessor corporation 110 that was a business enterprise, did not exist. 111 (b) The credit taken in any taxable year may not exceed 50 112 percent of the business enterprise’s remaining net income tax 113 liability under this chapter after all other credits have been 114 applied under s. 220.02(8). 115 (c) Any unused credit authorized under this section may be 116 carried forward and claimed by the taxpayer for up to 5 years 117 following the close of the taxable year in which the qualified 118 research expenses are incurred. 119 (d) The combined total amount of tax credits which may be 120 granted to all business enterprises under this section during 121 any calendar year is $15 million. Applications may be filed with 122 the department on or after March 20 for qualified research 123 expenses incurred within the preceding calendar year, and 124 credits shall be granted in the order in which completed 125 applications are received. 126 (3) RECALCULATION OF CREDIT AMOUNT.—If the amount of 127 qualified research expenses is reduced as a result of a federal 128 audit or examination, the credit granted pursuant to this 129 section must be recalculated. The taxpayer must file amended 130 returns for all affected years pursuant to s. 220.23(2), and the 131 taxpayer must pay to the department the difference between the 132 initial credit amount taken and the recalculated credit amount. 133 (4) RULES.—The department may adopt rules to administer 134 this section, including, but not limited to, rules prescribing 135 forms and application procedures and dates, and may establish 136 guidelines for making an affirmative showing of qualification 137 for a credit and any evidence needed to substantiate a claim for 138 credit under this section. 139 Section 3. Subsection (8) of section 220.02, Florida 140 Statutes, is amended to read: 141 220.02 Legislative intent.— 142 (8) It is the intent of the Legislature that credits 143 against either the corporate income tax or the franchise tax be 144 applied in the following order: those enumerated in s. 631.828, 145 those enumerated in s. 220.191, those enumerated in s. 220.181, 146 those enumerated in s. 220.183, those enumerated in s. 220.182, 147 those enumerated in s. 220.1895, those enumerated in s. 221.02, 148 those enumerated in s. 220.184, those enumerated in s. 220.186, 149 those enumerated in s. 220.1845, those enumerated in s. 220.19, 150 those enumerated in s. 220.185, those enumerated in s. 220.1875, 151 those enumerated in s. 220.192, those enumerated in s. 220.193, 152 those enumerated in s. 288.9916, those enumerated in s. 153 220.1899,andthose enumerated in s. 220.1896, and those 154 enumerated in s. 220.194. 155 Section 4. This act shall take effect July 1, 2011, and 156 applies for taxable years beginning on or after January 1, 2012. 157 158 ================= T I T L E A M E N D M E N T ================ 159 And the title is amended as follows: 160 Delete everything before the enacting clause 161 and insert: 162 A bill to be entitled 163 An act relating to tax credits for research and 164 development; amending s. 220.13, F.S.; redefining the 165 term “adjusted federal income” to include the amount 166 of a certain research and development tax credit; 167 creating s. 220.194, F.S.; providing definitions; 168 providing a tax credit for certain research and 169 development expenses; providing eligibility 170 requirements for research and development tax credits; 171 providing limitations regarding eligibility; providing 172 an amount for such credit; providing a maximum amount 173 of credit that may be taken during a taxable year by a 174 business enterprise; providing that any unused credit 175 may be carried forward for a specified period; 176 limiting the total amount of tax credits which may be 177 approved by the department in a calendar year; 178 providing that applications for credits may be filed 179 on or after a specified date; requiring that the 180 credits be granted in the order in which applications 181 are received; requiring the recalculation of a credit 182 under certain circumstances; authorizing the 183 department to adopt rules; amending s. 220.02, F.S.; 184 revising legislative intent to include the research 185 and development tax credit in the ordered list 186 according to which credits against corporate income 187 tax or franchise tax are applied; providing for 188 application; providing an effective date.