Florida Senate - 2019                       CS for CS for SB 576
       By the Committees on Appropriations; and Finance and Tax; and
       Senators Perry and Flores
       576-04596-19                                           2019576c2
    1                        A bill to be entitled                      
    2         An act relating to the corporate income tax; amending
    3         s. 220.03, F.S.; adopting the Internal Revenue Code in
    4         effect on January 1, 2019; providing applicability;
    5         amending s. 220.1105, F.S.; revising definitions;
    6         deleting provisions providing for a rate adjustment;
    7         providing for refunds of certain corporate income tax
    8         receipts in a certain fiscal year; revising
    9         requirements for the Department of Revenue in making
   10         certain determinations and in refunding eligible
   11         taxpayers; amending s. 220.13, F.S.; providing for the
   12         subtraction of global intangible low-taxed income from
   13         taxable income for the purpose of determining adjusted
   14         federal income; specifying the extent to which certain
   15         amounts may be subtracted; providing applicability;
   16         creating s. 220.27, F.S.; requiring taxpayers filing
   17         returns during a certain timeframe to submit specified
   18         information to the department by certain means;
   19         defining the term “NAICS”; requiring the department,
   20         by a certain date, to create a secure online
   21         application for submitting such information; requiring
   22         certain persons to certify the information is true and
   23         correct; specifying deadlines for submitting the
   24         information; authorizing the department to perform
   25         certain audits and investigations; providing a penalty
   26         for failure to provide the information; requiring the
   27         penalty to be deposited into the General Revenue Fund;
   28         authorizing the department to settle or compromise the
   29         penalty under certain circumstances; providing for
   30         expiration; authorizing the department to adopt
   31         emergency rules; providing for expiration of the
   32         authorization; providing an appropriation; providing
   33         an effective date.
   35  Be It Enacted by the Legislature of the State of Florida:
   37         Section 1. Paragraph (n) of subsection (1) and paragraph
   38  (c) of subsection (2) of section 220.03, Florida Statutes, are
   39  amended to read:
   40         220.03 Definitions.—
   41         (1) SPECIFIC TERMS.—When used in this code, and when not
   42  otherwise distinctly expressed or manifestly incompatible with
   43  the intent thereof, the following terms shall have the following
   44  meanings:
   45         (n) “Internal Revenue Code” means the United States
   46  Internal Revenue Code of 1986, as amended and in effect on
   47  January 1, 2019 2018, except as provided in subsection (3).
   48         (2) DEFINITIONAL RULES.—When used in this code and neither
   49  otherwise distinctly expressed nor manifestly incompatible with
   50  the intent thereof:
   51         (c) Any term used in this code has the same meaning as when
   52  used in a comparable context in the Internal Revenue Code and
   53  other statutes of the United States relating to federal income
   54  taxes, as such code and statutes are in effect on January 1,
   55  2019 2018. However, if subsection (3) is implemented, the
   56  meaning of a term shall be taken at the time the term is applied
   57  under this code.
   58         Section 2. The amendment made by this act to s. 220.03,
   59  Florida Statutes, applies to taxable years beginning on or after
   60  January 1, 2019.
   61         Section 3. Section 220.1105, Florida Statutes, is amended
   62  to read:
   63         220.1105 Tax imposed; Automatic refunds and downward
   64  adjustments to tax rates.—
   65         (1) As used in this section, the term:
   66         (a) “Net collections” means the total amount of taxes
   67  collected under this chapter by the department in a the 2018
   68  2019 fiscal year, including related interest and penalties,
   69  minus the total amount of refunds of taxes levied under this
   70  chapter and issued by the department in that fiscal year, not
   71  including refunds issued pursuant to paragraph (2)(c). No later
   72  than September 1, 2019, and September 1, 2020, the Office of
   73  Economic and Demographic Research shall determine net
   74  collections for the most recent 2018-2019 fiscal year.
   75         (b) “Forecasted net collections” means the amount of net
   76  collections forecasted for a the 2018-2019 fiscal year by the
   77  Revenue Estimating Conference on February 23, 2018.
   78         (c) “Adjusted forecasted collections” means forecasted net
   79  collections for a the 2018-2019 fiscal year multiplied by 1.07.
   80         (d) “Tax rate imposed” is the tax rate as defined in ss.
   81  220.11(2) and 220.63(2) adjusted as set forth in this section.
   82         (2) The tax rate imposed shall be adjusted based on net
   83  collections in the 2018-2019 fiscal year. If the net collections
   84  exceed the adjusted forecasted collections, the tax rate imposed
   85  for taxable years beginning on or after January 1, 2019, shall
   86  be the tax rate imposed for taxable years beginning on or after
   87  January 1, 2018, multiplied by the quotient of the adjusted
   88  forecasted collections divided by the net collections. The
   89  resulting tax rate shall be rounded to the nearest thousandth
   90  and rounded down if the fourth digit to the right of the decimal
   91  point is the number five.
   92         (3) By October 1, 2019, the Department of Revenue shall
   93  calculate the tax rate imposed, if it is to be adjusted pursuant
   94  to subsection (2), and shall on that same date report the
   95  results of such calculation to the Governor, the President of
   96  the Senate, and the Speaker of the House of Representatives.
   97         (2)(4)For the 2018-2019 and 2019-2020 fiscal years, any
   98  amount by which net collections for the fiscal year exceed
   99  adjusted forecasted collections for the same 2018-2019 fiscal
  100  year shall only be used to provide refunds to corporate income
  101  tax payers as follows:
  102         (a) For purposes of this subsection:
  103         1. “Eligible taxpayer for a fiscal year” means:
  104         a.For the 2018-2019 fiscal year, a taxpayer whose taxable
  105  year begins between April 1, 2017, and March 31, 2018, and whose
  106  final tax liability for such taxable year is greater than zero.
  107         b.For the 2019-2020 fiscal year, a taxpayer whose taxable
  108  year begins between April 1, 2018, and March 31, 2019, and whose
  109  final tax liability for such taxable year is greater than zero.
  110         2. “Excess collections for a fiscal year” means the amount
  111  by which net collections for a fiscal the 2018-2019 year exceed
  112  adjusted forecasted collections for that fiscal year.
  113         3. “Final tax liability” means the taxpayer’s amount of tax
  114  due under this chapter for a taxable year, reported on a return
  115  filed with the department pursuant to s. 220.222, including a
  116  return filed timely pursuant to a valid extension.
  117         4. “Total eligible tax liability for a fiscal year” means
  118  the sum of final tax liabilities of all eligible taxpayers for a
  119  fiscal year, as such liabilities are shown on the latest return
  120  filed with the department as of the February 1 immediately
  121  following that fiscal year.
  122         5. “Taxpayer refund share for a fiscal year” means an
  123  eligible taxpayer’s final tax liability as a percentage of the
  124  total eligible tax liability for that fiscal year.
  125         6. “Taxpayer refund for a fiscal year” means the taxpayer
  126  refund share for a fiscal year multiplied by the excess
  127  collections for that fiscal year.
  128         (b) No later than April 15 following a fiscal year February
  129  15, 2020, the department shall determine total eligible tax
  130  liability for that fiscal year, the taxpayer refund share for
  131  that fiscal year for each eligible taxpayer, and the taxpayer
  132  refund for that fiscal year for each eligible taxpayer.
  133         (c) No later than May 1 following a fiscal year March 1,
  134  2020, the department shall refund a taxpayer refund for that
  135  fiscal year to each eligible taxpayer.
  136         (5) Tax rate adjustments pursuant to this section are
  137  repealed for taxable years beginning on or after January 1,
  138  2020.
  139         Section 4. Paragraph (b) of subsection (1) of section
  140  220.13, Florida Statutes, is amended to read:
  141         220.13 “Adjusted federal income” defined.—
  142         (1) The term “adjusted federal income” means an amount
  143  equal to the taxpayer’s taxable income as defined in subsection
  144  (2), or such taxable income of more than one taxpayer as
  145  provided in s. 220.131, for the taxable year, adjusted as
  146  follows:
  147         (b) Subtractions.—
  148         1. There shall be subtracted from such taxable income:
  149         a. The net operating loss deduction allowable for federal
  150  income tax purposes under s. 172 of the Internal Revenue Code
  151  for the taxable year, except that any net operating loss that is
  152  transferred pursuant to s. 220.194(6) may not be deducted by the
  153  seller,
  154         b. The net capital loss allowable for federal income tax
  155  purposes under s. 1212 of the Internal Revenue Code for the
  156  taxable year,
  157         c. The excess charitable contribution deduction allowable
  158  for federal income tax purposes under s. 170(d)(2) of the
  159  Internal Revenue Code for the taxable year, and
  160         d. The excess contributions deductions allowable for
  161  federal income tax purposes under s. 404 of the Internal Revenue
  162  Code for the taxable year.
  164  However, a net operating loss and a capital loss shall never be
  165  carried back as a deduction to a prior taxable year, but all
  166  deductions attributable to such losses shall be deemed net
  167  operating loss carryovers and capital loss carryovers,
  168  respectively, and treated in the same manner, to the same
  169  extent, and for the same time periods as are prescribed for such
  170  carryovers in ss. 172 and 1212, respectively, of the Internal
  171  Revenue Code.
  172         2. There shall be subtracted from such taxable income any
  173  amount to the extent included therein the following:
  174         a. Dividends treated as received from sources without the
  175  United States, as determined under s. 862 of the Internal
  176  Revenue Code.
  177         b. All amounts included in taxable income under s. 78, or
  178  s. 951, or s. 951A of the Internal Revenue Code.
  180  However, any amount subtracted under this subparagraph shall
  181  only be allowed to the extent that such amount is not deductible
  182  in determining federal taxable income. As to any amount
  183  subtracted under this subparagraph, there shall be added to such
  184  taxable income all expenses deducted on the taxpayer’s return
  185  for the taxable year which are attributable, directly or
  186  indirectly, to such subtracted amount. Further, no amount shall
  187  be subtracted with respect to dividends paid or deemed paid by a
  188  Domestic International Sales Corporation.
  189         3. In computing “adjusted federal income” for taxable years
  190  beginning after December 31, 1976, there shall be allowed as a
  191  deduction the amount of wages and salaries paid or incurred
  192  within this state for the taxable year for which no deduction is
  193  allowed pursuant to s. 280C(a) of the Internal Revenue Code
  194  (relating to credit for employment of certain new employees).
  195         4. There shall be subtracted from such taxable income any
  196  amount of nonbusiness income included therein.
  197         5. There shall be subtracted any amount of taxes of foreign
  198  countries allowable as credits for taxable years beginning on or
  199  after September 1, 1985, under s. 901 of the Internal Revenue
  200  Code to any corporation which derived less than 20 percent of
  201  its gross income or loss for its taxable year ended in 1984 from
  202  sources within the United States, as described in s.
  203  861(a)(2)(A) of the Internal Revenue Code, not including credits
  204  allowed under ss. 902 and 960 of the Internal Revenue Code,
  205  withholding taxes on dividends within the meaning of sub
  206  subparagraph 2.a., and withholding taxes on royalties, interest,
  207  technical service fees, and capital gains.
  208         6. Notwithstanding any other provision of this code, except
  209  with respect to amounts subtracted pursuant to subparagraphs 1.
  210  and 3., any increment of any apportionment factor which is
  211  directly related to an increment of gross receipts or income
  212  which is deducted, subtracted, or otherwise excluded in
  213  determining adjusted federal income shall be excluded from both
  214  the numerator and denominator of such apportionment factor.
  215  Further, all valuations made for apportionment factor purposes
  216  shall be made on a basis consistent with the taxpayer’s method
  217  of accounting for federal income tax purposes.
  218         Section 5. The amendment made by this act to s. 220.13,
  219  Florida Statutes, applies to taxable years beginning on or after
  220  January 1, 2018.
  221         Section 6. Section 220.27, Florida Statutes, is created to
  222  read:
  223         220.27 Additional required information.—
  224         (1)(a)Every taxpayer that is required to file a return
  225  under s. 220.22(1) for a taxable year beginning during the 2018
  226  or 2019 calendar years must submit to the department the
  227  following information for those taxable years using the online
  228  application on the department’s website:
  229         1.The taxpayer’s name, federal taxpayer identification
  230  number, taxable year beginning date, taxable year ending date,
  231  and whether a consolidated return for the taxpayer is required
  232  or elected under s. 220.131.
  233         2.The taxpayer’s NAICS code for business activity that
  234  generates the greatest proportion of gross receipts of the
  235  taxpayer. As used in this subparagraph, the term “NAICS” means
  236  those classifications contained in the North American Industry
  237  Classification System, as published in 2007 by the Office of
  238  Management and Budget, Executive Office of the President.
  239         3.The taxpayer’s taxable income, as that term is defined
  240  in s. 220.13(2), and the taxpayer’s state apportionment fraction
  241  pursuant to s. 220.15 for the taxable year.
  242         4.The amount of global intangible low-taxed income
  243  included in federal taxable income under s. 951A of the Internal
  244  Revenue Code, and the amount of the related deduction under s.
  245  250 of the Internal Revenue Code as it pertains to s. 951A of
  246  the Internal Revenue Code.
  247         5.The amount of foreign-derived intangible income computed
  248  for the federal return for the taxable year and the amount of
  249  the related deduction under s. 250 of the Internal Revenue Code,
  250  as it pertains to foreign-derived intangible income.
  251         6.The amount of business interest expense deducted on the
  252  federal return under s. 163 of the Internal Revenue Code,
  253  including any carryover; the amount of current year business
  254  interest expense, including any carryover, which was not
  255  deducted due to the limitation in s. 163(j) of the Internal
  256  Revenue Code; and the amount of business interest expense
  257  carried over from previous taxable years.
  258         7.The amount of federal net operating loss deduction under
  259  s. 172 of the Internal Revenue Code applied in determining
  260  federal taxable income and the amount of federal net operating
  261  loss carryover that was not applied due to the limitation in s.
  262  172(a)(2) of the Internal Revenue Code.
  263         8.The total amount of state net operating loss carryover
  264  available after the filing of the return for the taxable year.
  265         9.The total amount of the state alternative minimum tax
  266  credit carryover available after the filing of the return for
  267  the taxable year.
  268         (b)By September 3, 2019, the department shall create a
  269  secure online application for use by taxpayers when submitting
  270  the information required under this subsection through the
  271  department’s website.
  272         (c)An officer of the taxpayer or a person duly authorized
  273  to act on the taxpayer’s behalf shall certify that the
  274  information submitted pursuant to this subsection is true and
  275  correct. The required information must be submitted the earlier
  276  of 10 days after the extended due date of the tax return or 10
  277  days after the date such return is filed. For taxpayers that
  278  file returns before September 3, 2019, for taxable years
  279  beginning in calendar year 2018, the required information is
  280  timely if submitted by September 3, 2019.
  281         (d)In addition to its existing audit and investigation
  282  authority, the department may perform any additional financial
  283  and technical audits and investigations, including examining the
  284  accounts, books, and financial records of the taxpayer, which
  285  are necessary to verify the accuracy of the information
  286  submitted pursuant to this subsection.
  287         (e)A taxpayer who fails to provide the required
  288  information by the required submission date is subject to a
  289  penalty of $1,000 or 1 percent of the tax determined to be due
  290  under this chapter for the most recent taxable year reported on
  291  a return filed with the department, whichever is greater. Any
  292  such penalty collected must be deposited into the General
  293  Revenue Fund. The department may settle or compromise such
  294  penalty if the department determines that the noncompliance is
  295  due to reasonable cause and not to willful negligence, willful
  296  neglect, or fraud.
  297         (2)This section expires January 1, 2023.
  298         Section 7. (1)The Department of Revenue is authorized, and
  299  all conditions are deemed to be met, to adopt emergency rules
  300  pursuant to s. 120.54(4), Florida Statutes, for the purpose of
  301  implementing this act.
  302         (2)Notwithstanding any other law, emergency rules adopted
  303  pursuant to subsection (1) are effective for 6 months after
  304  adoption and may be renewed during the pendency of procedures to
  305  adopt permanent rules addressing the subject of the emergency
  306  rules.
  307         (3)This section expires January 1, 2022.
  308         Section 8. For the 2019-2020 fiscal year, the sum of
  309  $120,000 in nonrecurring funds is appropriated from the General
  310  Revenue Fund to the Department of Revenue for the purpose of
  311  implementing this act.
  312         Section 9. This act shall take effect upon becoming a law.