Florida Senate - 2014 PROPOSED COMMITTEE SUBSTITUTE
Bill No. CS for SB 596
Ì870296DÎ870296
576-03653-14
Proposed Committee Substitute by the Committee on Appropriations
(Appropriations Subcommittee on Finance and Tax)
1 A bill to be entitled
2 An act relating to defense contracting; creating s.
3 288.1046, F.S.; defining terms; authorizing certain
4 prime contractors to apply to the Department of
5 Economic Opportunity to certify that such contractors
6 may reduce their computation of adjusted federal
7 income by a certain amount when awarded a prime
8 contract; providing requirements to apply for a
9 reduction in computation of income; requiring a prime
10 contractor to apply separately for each qualified
11 subcontract award and to provide documentation;
12 providing guidelines for the department to certify an
13 award; authorizing the department and the Department
14 of Revenue to adopt rules; amending s. 220.13, F.S.;
15 revising the definition of the term “adjusted federal
16 income” for corporate income tax purposes; providing
17 for certain reduction in computation of income, to
18 conform; providing an effective date.
19
20 Be It Enacted by the Legislature of the State of Florida:
21
22 Section 1. Section 288.1046, Florida Statutes, is created
23 to read:
24 288.1046 Defense Works in Florida Incentive.—
25 (1) As used in this section, the term:
26 (a) “Florida prime contractor” means a business entity
27 operating in this state that is awarded a prime contract.
28 (b) “Florida small business subcontractor” means a business
29 entity that:
30 1. Maintains its primary place of business in the state;
31 2. Has 250 or fewer employees at the time a qualified
32 subcontract award is made;
33 3. Is awarded a subcontract from a Florida prime
34 contractor; and
35 4. Has no subsidiary or affiliate business relationship to
36 the prime contractor making the award.
37 (c) “Prime contract” means a contract that is awarded
38 directly from the Federal Government.
39 (d) “Qualified defense work” means a prime contract awarded
40 for manufacturing, engineering, construction, distribution,
41 research, development, or other activities related to equipment,
42 supplies, technology, or other goods or services that directly
43 or indirectly support the United States Armed Forces or that can
44 be reasonably determined to support national security, including
45 space related activities.
46 (e) “Qualified subcontract award” means qualified defense
47 work, in part or in whole, subcontracted from a Florida prime
48 contractor to a Florida small business subcontractor, which is
49 executed in the state and valued at more than $250,000. The term
50 does not include subcontracts executed before July 1, 2014.
51 (2) A Florida prime contractor may apply to the department
52 to certify that it may reduce its computation of adjusted
53 federal income under s. 220.13 by an amount equal to 4 percent
54 of the qualified subcontract award if such prime contractor:
55 (a) Is subject to chapter 220;
56 (b) Is awarded qualified defense work; and
57 (c) Awards a qualified subcontract award.
58 (3) A Florida prime contractor may reduce its adjusted
59 federal income under subsection (2) only for taxable years
60 beginning on or after January 1, 2014, and must apply separately
61 to the department for each qualified subcontract award and
62 provide the department required documentation, including, but
63 not limited to, the application for the award and copies of
64 contracts, tax records, or employment records.
65 (4) The department may establish application, approval,
66 appeal, and accountability processes as necessary. The
67 department may consult with Enterprise Florida, Inc., and the
68 Florida Defense Support Task Force as necessary to administer
69 this section.
70 (a) Within 10 days after certifying a qualified subcontract
71 award, the department shall provide:
72 1. A letter certifying the award to the applicant; and
73 2. A copy of the letter certifying the award to the
74 Department of Revenue.
75 (b) The department may certify, for each Florida prime
76 contractor applicant per calendar year, up to $250 million in
77 aggregate qualified subcontract awards.
78 (c) The department may certify in total, per calendar year,
79 up to $2.5 billion in aggregate qualified subcontract awards.
80 (d) For a multiyear qualified subcontract award, the
81 department shall certify the full amount of the award under
82 paragraphs (b) and (c) in the calendar year it was awarded.
83 (e) The Florida prime contractor may reduce its adjusted
84 federal income under subsection (2) in the taxable years in
85 which payments are made to the Florida small business
86 subcontractor.
87 (5) The department and the Department of Revenue may adopt
88 rules to administer this section.
89 Section 2. Paragraph (b) of subsection (1) of 220.13,
90 Florida Statutes, is amended to read:
91 220.13 “Adjusted federal income” defined.—
92 (1) The term “adjusted federal income” means an amount
93 equal to the taxpayer’s taxable income as defined in subsection
94 (2), or such taxable income of more than one taxpayer as
95 provided in s. 220.131, for the taxable year, adjusted as
96 follows:
97 (b) Subtractions.—
98 1. There shall be subtracted from such taxable income:
99 a. The net operating loss deduction allowable for federal
100 income tax purposes under s. 172 of the Internal Revenue Code
101 for the taxable year, except that any net operating loss that is
102 transferred pursuant to s. 220.194(6) may not be deducted by the
103 seller;,
104 b. The net capital loss allowable for federal income tax
105 purposes under s. 1212 of the Internal Revenue Code for the
106 taxable year;,
107 c. The excess charitable contribution deduction allowable
108 for federal income tax purposes under s. 170(d)(2) of the
109 Internal Revenue Code for the taxable year;, and
110 d. The excess contributions deductions allowable for
111 federal income tax purposes under s. 404 of the Internal Revenue
112 Code for the taxable year.
113
114 However, a net operating loss and a capital loss shall never be
115 carried back as a deduction to a prior taxable year, but all
116 deductions attributable to such losses shall be deemed net
117 operating loss carryovers and capital loss carryovers,
118 respectively, and treated in the same manner, to the same
119 extent, and for the same time periods as are prescribed for such
120 carryovers in ss. 172 and 1212, respectively, of the Internal
121 Revenue Code.
122 2. There shall be subtracted from such taxable income any
123 amount to the extent included therein the following:
124 a. Dividends treated as received from sources without the
125 United States, as determined under s. 862 of the Internal
126 Revenue Code.
127 b. All amounts included in taxable income under s. 78 or s.
128 951 of the Internal Revenue Code.
129
130 However, as to any amount subtracted under this subparagraph,
131 there shall be added to such taxable income all expenses
132 deducted on the taxpayer’s return for the taxable year which are
133 attributable, directly or indirectly, to such subtracted amount.
134 Further, no amount shall be subtracted with respect to dividends
135 paid or deemed paid by a Domestic International Sales
136 Corporation.
137 3. In computing “adjusted federal income” for taxable years
138 beginning after December 31, 1976, there shall be allowed as a
139 deduction the amount of wages and salaries paid or incurred
140 within this state for the taxable year for which no deduction is
141 allowed pursuant to s. 280C(a) of the Internal Revenue Code
142 (relating to credit for employment of certain new employees).
143 4. There shall be subtracted from such taxable income any
144 amount of nonbusiness income included therein.
145 5. There shall be subtracted any amount of taxes of foreign
146 countries allowable as credits for taxable years beginning on or
147 after September 1, 1985, under s. 901 of the Internal Revenue
148 Code to any corporation which derived less than 20 percent of
149 its gross income or loss for its taxable year ended in 1984 from
150 sources within the United States, as described in s.
151 861(a)(2)(A) of the Internal Revenue Code, not including credits
152 allowed under ss. 902 and 960 of the Internal Revenue Code,
153 withholding taxes on dividends within the meaning of sub
154 subparagraph 2.a., and withholding taxes on royalties, interest,
155 technical service fees, and capital gains.
156 6. There shall be subtracted from such taxable income 4
157 percent of the amount of the qualified subcontract award
158 certified by the Department of Economic Opportunity and paid to
159 the subcontractor pursuant to s. 288.1046.
160 7. Notwithstanding any other provision of this code, except
161 with respect to amounts subtracted pursuant to subparagraphs 1.
162 and 3., any increment of any apportionment factor which is
163 directly related to an increment of gross receipts or income
164 which is deducted, subtracted, or otherwise excluded in
165 determining adjusted federal income shall be excluded from both
166 the numerator and denominator of such apportionment factor.
167 Further, all valuations made for apportionment factor purposes
168 shall be made on a basis consistent with the taxpayer’s method
169 of accounting for federal income tax purposes.
170 Section 3. This act shall take effect July 1, 2014.