Florida Senate - 2018                              CS for SB 502
       
       
        
       By the Committee on Appropriations; and Senator Stargel
       
       
       
       
       
       576-03813-18                                           2018502c1
    1                        A bill to be entitled                      
    2         An act relating to the corporate income tax; amending
    3         s. 220.03, F.S.; adopting the 2018 version of the
    4         Internal Revenue Code; amending s. 220.13, F.S.;
    5         revising the definition of the term “adjusted federal
    6         income” relating to adjustments related to federal
    7         acts; providing legislative findings; requiring the
    8         Department of Revenue to establish a workgroup for
    9         certain purposes; specifying the composition of the
   10         workgroup; requiring the workgroup to consult with the
   11         Revenue Estimating Conference and seek and consider
   12         comments from the private sector; requiring the
   13         workgroup to submit a specified report to the Governor
   14         and Legislature by a specified date; requiring the
   15         workgroup to submit status reports to appropriate
   16         legislative committees on specified dates; providing
   17         for retroactive operation; providing an effective
   18         date.
   19          
   20  Be It Enacted by the Legislature of the State of Florida:
   21  
   22         Section 1. Paragraph (n) of subsection (1) and paragraph
   23  (c) of subsection (2) of section 220.03, Florida Statutes, are
   24  amended to read:
   25         220.03 Definitions.—
   26         (1) SPECIFIC TERMS.—When used in this code, and when not
   27  otherwise distinctly expressed or manifestly incompatible with
   28  the intent thereof, the following terms shall have the following
   29  meanings:
   30         (n) “Internal Revenue Code” means the United States
   31  Internal Revenue Code of 1986, as amended and in effect on
   32  January 1, 2018 2017, except as provided in subsection (3).
   33         (2) DEFINITIONAL RULES.—When used in this code and neither
   34  otherwise distinctly expressed nor manifestly incompatible with
   35  the intent thereof:
   36         (c) Any term used in this code has the same meaning as when
   37  used in a comparable context in the Internal Revenue Code and
   38  other statutes of the United States relating to federal income
   39  taxes, as such code and statutes are in effect on January 1,
   40  2018 2017. However, if subsection (3) is implemented, the
   41  meaning of a term shall be taken at the time the term is applied
   42  under this code.
   43         Section 2. Paragraph (e) of subsection (1) of section
   44  220.13, Florida Statutes, is amended to read:
   45         220.13 “Adjusted federal income” defined.—
   46         (1) The term “adjusted federal income” means an amount
   47  equal to the taxpayer’s taxable income as defined in subsection
   48  (2), or such taxable income of more than one taxpayer as
   49  provided in s. 220.131, for the taxable year, adjusted as
   50  follows:
   51         (e) Adjustments related to federal acts.—Taxpayers shall be
   52  required to make the adjustments prescribed in this paragraph
   53  for Florida tax purposes with respect to certain tax benefits
   54  received pursuant to the Economic Stimulus Act of 2008, the
   55  American Recovery and Reinvestment Act of 2009, the Small
   56  Business Jobs Act of 2010, the Tax Relief, Unemployment
   57  Insurance Reauthorization, and Job Creation Act of 2010, the
   58  American Taxpayer Relief Act of 2012, the Tax Increase
   59  Prevention Act of 2014, and the Consolidated Appropriations Act,
   60  2016, and the Tax Cuts and Jobs Act of 2017.
   61         1. There shall be added to such taxable income an amount
   62  equal to 100 percent of any amount deducted for federal income
   63  tax purposes as bonus depreciation for the taxable year pursuant
   64  to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as
   65  amended by s. 103 of Pub. L. No. 110-185, s. 1201 of Pub. L. No.
   66  111-5, s. 2022 of Pub. L. No. 111-240, s. 401 of Pub. L. No.
   67  111-312, s. 331 of Pub. L. No. 112-240, s. 125 of Pub. L. No.
   68  113-295, and s. 143 of Division Q of Pub. L. No. 114-113, and s.
   69  13201 of Pub. L. No. 115-97, for property placed in service
   70  after December 31, 2007, and before January 1, 2027 2021. For
   71  the taxable year and for each of the 6 subsequent taxable years,
   72  there shall be subtracted from such taxable income an amount
   73  equal to one-seventh of the amount by which taxable income was
   74  increased pursuant to this subparagraph, notwithstanding any
   75  sale or other disposition of the property that is the subject of
   76  the adjustments and regardless of whether such property remains
   77  in service in the hands of the taxpayer.
   78         2. There shall be added to such taxable income an amount
   79  equal to 100 percent of any amount in excess of $128,000
   80  deducted for federal income tax purposes for the taxable year
   81  pursuant to s. 179 of the Internal Revenue Code of 1986, as
   82  amended by s. 102 of Pub. L. No. 110-185, s. 1202 of Pub. L. No.
   83  111-5, s. 2021 of Pub. L. No. 111-240, s. 402 of Pub. L. No.
   84  111-312, s. 315 of Pub. L. No. 112-240, and s. 127 of Pub. L.
   85  No. 113-295, for taxable years beginning after December 31,
   86  2007, and before January 1, 2015. For the taxable year and for
   87  each of the 6 subsequent taxable years, there shall be
   88  subtracted from such taxable income one-seventh of the amount by
   89  which taxable income was increased pursuant to this
   90  subparagraph, notwithstanding any sale or other disposition of
   91  the property that is the subject of the adjustments and
   92  regardless of whether such property remains in service in the
   93  hands of the taxpayer.
   94         3. There shall be added to such taxable income an amount
   95  equal to the amount of deferred income not included in such
   96  taxable income pursuant to s. 108(i)(1) of the Internal Revenue
   97  Code of 1986, as amended by s. 1231 of Pub. L. No. 111-5. There
   98  shall be subtracted from such taxable income an amount equal to
   99  the amount of deferred income included in such taxable income
  100  pursuant to s. 108(i)(1) of the Internal Revenue Code of 1986,
  101  as amended by s. 1231 of Pub. L. No. 111-5.
  102         4. Subtractions available under this paragraph may be
  103  transferred to the surviving or acquiring entity following a
  104  merger or acquisition and used in the same manner and with the
  105  same limitations as specified by this paragraph.
  106         5. The additions and subtractions specified in this
  107  paragraph are intended to adjust taxable income for Florida tax
  108  purposes, and, notwithstanding any other provision of this code,
  109  such additions and subtractions shall be permitted to change a
  110  taxpayer’s net operating loss for Florida tax purposes.
  111         Section 3. The Legislature recognizes that the Tax Cuts and
  112  Jobs Act of 2017 will have significant effects on the state
  113  corporate income tax and on corporate taxpayers when it is fully
  114  implemented. To better understand these effects, the Legislature
  115  finds the following actions are necessary:
  116         (1) The Department of Revenue shall establish a workgroup
  117  to examine how the implementation of the Tax Cuts and Jobs Act
  118  of 2017 will affect the state corporate income tax.
  119         (2) The workgroup must consist of employees of the
  120  department who have expertise in state and federal corporate
  121  income tax and other employees who may assist the workgroup. In
  122  performing its duties, the workgroup shall consult with the
  123  Revenue Estimating Conference. The workgroup must seek and
  124  consider comments from the private sector.
  125         (3) By February 1, 2019, the workgroup shall submit a
  126  report to the Governor, the President of the Senate, the Speaker
  127  of the House, and the chairs of appropriate legislative
  128  committees. At a minimum, the report must address the following:
  129         (a) A comprehensive discussion of any issues the workgroup
  130  determines will have an effect on the state corporate tax
  131  structure and on corporate tax revenues.
  132         (b) Options for changes to state tax law which may be
  133  needed to integrate state law with federal law.
  134         (c) The potential fiscal impact of each option on the state
  135  and on taxpayers.
  136         (d) Whether the workgroup should be extended.
  137         (e) Any other information the workgroup determines will
  138  assist the Legislature.
  139         (4) The workgroup shall submit status reports to the chairs
  140  of appropriate legislative committees on May 15, 2018, July 15,
  141  2018, September 15, 2018, and November 15, 2018. At a minimum,
  142  the status reports must include a brief description of the
  143  workgroup’s activities and any guidance issued by the Internal
  144  Revenue Service relevant to the workgroups duties.
  145         Section 4. This act shall take effect upon becoming a law
  146  and operate retroactively to January 1, 2018.