Florida Senate - 2023 SB 1144
By Senator Thompson
15-01053B-23 20231144__
1 A bill to be entitled
2 An act relating to corporate income tax; amending s.
3 220.03, F.S.; revising and providing definitions;
4 amending s. 220.13, F.S.; revising the definition of
5 the term “adjusted federal income” to prohibit
6 specified deductions, limit certain carryovers, and
7 require subtractions of certain dividends paid and
8 received within a unitary combined group to determine
9 subtractions from taxable income; conforming
10 provisions to changes made by the act; repealing s.
11 220.131, F.S., relating to the adjusted federal income
12 of affiliated groups; creating s. 220.136, F.S.;
13 specifying circumstances under which a corporation is
14 a member of a unitary combined group; creating s.
15 220.1363, F.S.; defining the term “unitary combined
16 reporting method”; specifying requirements for,
17 limitations on, and prohibitions in calculating and
18 reporting income in a unitary combined group return;
19 requiring all members of a unitary combined group to
20 use the unitary combined reporting method; defining
21 the term “sale”; specifying requirements for
22 designating the filing member and the taxable year of
23 the unitary combined group; specifying income
24 reporting requirements for certain members of the
25 unitary combined group; requiring that a unitary
26 combined group return include a specified
27 computational schedule and domestic disclosure
28 spreadsheet; authorizing the executive director of the
29 Department of Revenue to undertake certain actions in
30 specified circumstances; authorizing the Department of
31 Revenue to adopt rules; providing legislative intent
32 regarding the adoption of rules; amending s. 220.14,
33 F.S.; revising the calculation for prorating a certain
34 corporate income tax exemption to reflect leap years;
35 conforming a provision to changes made by the act;
36 amending s. 220.15, F.S.; revising provisions
37 determining when certain sales are considered to have
38 occurred in this state; amending ss. 220.183,
39 220.1845, 220.1875, 220.1876, 220.1877, 220.191,
40 220.193, and 220.51, F.S.; conforming provisions to
41 changes made by the act; amending s. 220.64, F.S.;
42 providing applicability of unitary combined group
43 provisions to the franchise tax; conforming provisions
44 to changes made by the act; amending ss. 288.1254 and
45 376.30781, F.S.; conforming provisions to changes made
46 by the act; providing, beginning on a specified date,
47 requirements for corporate income tax return filings
48 for certain taxpayers; requiring that recaptured funds
49 be deposited into the General Revenue Fund; providing
50 an effective date.
51
52 Be It Enacted by the Legislature of the State of Florida:
53
54 Section 1. Paragraph (z) of subsection (1) of section
55 220.03, Florida Statutes, is amended, and paragraph (gg) is
56 added to that subsection, to read:
57 220.03 Definitions.—
58 (1) SPECIFIC TERMS.—When used in this code, and when not
59 otherwise distinctly expressed or manifestly incompatible with
60 the intent thereof, the following terms shall have the following
61 meanings:
62 (z) “Taxpayer” means any corporation subject to the tax
63 imposed by this code, and includes all corporations that are
64 members of a unitary combined group for which a consolidated
65 return is filed under s. 220.131. However, the term “taxpayer”
66 does not include a corporation having no individuals, (including
67 individuals employed by an affiliate,) receiving compensation in
68 this state as defined in s. 220.15 when the only property owned
69 or leased by the said corporation, (including an affiliate,) in
70 this state is located at the premises of a printer with which it
71 has contracted for printing, if such property consists of the
72 final printed product, property which becomes a part of the
73 final printed product, or property from which the printed
74 product is produced.
75 (gg) “Unitary combined group” means a group of corporations
76 related through common ownership whose business activities are
77 integrated with, dependent upon, or contribute to a flow of
78 value among members of the group.
79 Section 2. Subsection (1) and paragraph (f) of subsection
80 (2) of section 220.13, Florida Statutes, are amended to read:
81 220.13 “Adjusted federal income” defined.—
82 (1) The term “adjusted federal income” means an amount
83 equal to the taxpayer’s taxable income as defined in subsection
84 (2), or such taxable income of a unitary combined group more
85 than one taxpayer as provided in s. 220.1363 s. 220.131, for the
86 taxable year, adjusted as follows:
87 (a) Additions.—There shall be added to such taxable income:
88 1.a. The amount of any tax upon or measured by income,
89 excluding taxes based on gross receipts or revenues, paid or
90 accrued as a liability to the District of Columbia or any state
91 of the United States which is deductible from gross income in
92 the computation of taxable income for the taxable year.
93 b. Notwithstanding sub-subparagraph a., if a credit taken
94 under s. 220.1875, s. 220.1876, or s. 220.1877 is added to
95 taxable income in a previous taxable year under subparagraph 11.
96 and is taken as a deduction for federal tax purposes in the
97 current taxable year, the amount of the deduction allowed shall
98 not be added to taxable income in the current year. The
99 exception in this sub-subparagraph is intended to ensure that
100 the credit under s. 220.1875, s. 220.1876, or s. 220.1877 is
101 added in the applicable taxable year and does not result in a
102 duplicate addition in a subsequent year.
103 2. The amount of interest which is excluded from taxable
104 income under s. 103(a) of the Internal Revenue Code or any other
105 federal law, less the associated expenses disallowed in the
106 computation of taxable income under s. 265 of the Internal
107 Revenue Code or any other law, excluding 60 percent of any
108 amounts included in alternative minimum taxable income, as
109 defined in s. 55(b)(2) of the Internal Revenue Code, if the
110 taxpayer pays tax under s. 220.11(3).
111 3. In the case of a regulated investment company or real
112 estate investment trust, an amount equal to the excess of the
113 net long-term capital gain for the taxable year over the amount
114 of the capital gain dividends attributable to the taxable year.
115 4. That portion of the wages or salaries paid or incurred
116 for the taxable year which is equal to the amount of the credit
117 allowable for the taxable year under s. 220.181. This
118 subparagraph shall expire on the date specified in s. 290.016
119 for the expiration of the Florida Enterprise Zone Act.
120 5. That portion of the ad valorem school taxes paid or
121 incurred for the taxable year which is equal to the amount of
122 the credit allowable for the taxable year under s. 220.182. This
123 subparagraph shall expire on the date specified in s. 290.016
124 for the expiration of the Florida Enterprise Zone Act.
125 6. The amount taken as a credit under s. 220.195 which is
126 deductible from gross income in the computation of taxable
127 income for the taxable year.
128 7. That portion of assessments to fund a guaranty
129 association incurred for the taxable year which is equal to the
130 amount of the credit allowable for the taxable year.
131 8. In the case of a nonprofit corporation which holds a
132 pari-mutuel permit and which is exempt from federal income tax
133 as a farmers’ cooperative, an amount equal to the excess of the
134 gross income attributable to the pari-mutuel operations over the
135 attributable expenses for the taxable year.
136 9. The amount taken as a credit for the taxable year under
137 s. 220.1895.
138 10. Up to nine percent of the eligible basis of any
139 designated project which is equal to the credit allowable for
140 the taxable year under s. 220.185.
141 11. Any amount taken as a credit for the taxable year under
142 s. 220.1875, s. 220.1876, or s. 220.1877. The addition in this
143 subparagraph is intended to ensure that the same amount is not
144 allowed for the tax purposes of this state as both a deduction
145 from income and a credit against the tax. This addition is not
146 intended to result in adding the same expense back to income
147 more than once.
148 12. The amount taken as a credit for the taxable year under
149 s. 220.193.
150 13. Any portion of a qualified investment, as defined in s.
151 288.9913, which is claimed as a deduction by the taxpayer and
152 taken as a credit against income tax pursuant to s. 288.9916.
153 14. The costs to acquire a tax credit pursuant to s.
154 288.1254(5) that are deducted from or otherwise reduce federal
155 taxable income for the taxable year.
156 15. The amount taken as a credit for the taxable year
157 pursuant to s. 220.194.
158 16. The amount taken as a credit for the taxable year under
159 s. 220.196. The addition in this subparagraph is intended to
160 ensure that the same amount is not allowed for the tax purposes
161 of this state as both a deduction from income and a credit
162 against the tax. The addition is not intended to result in
163 adding the same expense back to income more than once.
164 17. The amount taken as a credit for the taxable year
165 pursuant to s. 220.198.
166 18. The amount taken as a credit for the taxable year
167 pursuant to s. 220.1915.
168 (b) Subtractions.—
169 1. There shall be subtracted from such taxable income:
170 a. The net operating loss deduction allowable for federal
171 income tax purposes under s. 172 of the Internal Revenue Code
172 for the taxable year, except that any net operating loss that is
173 transferred pursuant to s. 220.194(6) may not be deducted by the
174 seller,
175 b. The net capital loss allowable for federal income tax
176 purposes under s. 1212 of the Internal Revenue Code for the
177 taxable year,
178 c. The excess charitable contribution deduction allowable
179 for federal income tax purposes under s. 170(d)(2) of the
180 Internal Revenue Code for the taxable year, and
181 d. The excess contributions deductions allowable for
182 federal income tax purposes under s. 404 of the Internal Revenue
183 Code for the taxable year.
184
185 However, a net operating loss and a capital loss shall never be
186 carried back as a deduction to a prior taxable year, but all
187 deductions attributable to such losses shall be deemed net
188 operating loss carryovers and capital loss carryovers,
189 respectively, and treated in the same manner, to the same
190 extent, and for the same time periods as are prescribed for such
191 carryovers in ss. 172 and 1212, respectively, of the Internal
192 Revenue Code. A deduction is not allowed for net operating
193 losses, net capital losses, or excess contribution deductions
194 under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404 for a member
195 of a unitary combined group which is not a United States member.
196 Carryovers of net operating losses, net capital losses, or
197 excess contribution deductions under 26 U.S.C. ss. 170(d)(2),
198 172, 1212, and 404 may be subtracted only by the member of the
199 unitary combined group which generates a carryover.
200 2. There shall be subtracted from such taxable income any
201 amount to the extent included therein the following:
202 a. Dividends treated as received from sources without the
203 United States, as determined under s. 862 of the Internal
204 Revenue Code.
205 b. All amounts included in taxable income under s. 78, s.
206 951, or s. 951A of the Internal Revenue Code.
207
208 However, any amount subtracted under this subparagraph is
209 allowed only to the extent such amount is not deductible in
210 determining federal taxable income. As to any amount subtracted
211 under this subparagraph, there shall be added to such taxable
212 income all expenses deducted on the taxpayer’s return for the
213 taxable year which are attributable, directly or indirectly, to
214 such subtracted amount. Further, no amount shall be subtracted
215 with respect to dividends paid or deemed paid by a Domestic
216 International Sales Corporation.
217 3. Amounts received by a member of a unitary combined group
218 as dividends paid by another member of the unitary combined
219 group must be subtracted from the taxable income to the extent
220 that the dividends are included in the taxable income.
221 4.3. In computing “adjusted federal income” for taxable
222 years beginning after December 31, 1976, there shall be allowed
223 as a deduction the amount of wages and salaries paid or incurred
224 within this state for the taxable year for which no deduction is
225 allowed pursuant to s. 280C(a) of the Internal Revenue Code
226 (relating to credit for employment of certain new employees).
227 5.4. There shall be subtracted from such taxable income any
228 amount of nonbusiness income included therein.
229 6.5. There shall be subtracted any amount of taxes of
230 foreign countries allowable as credits for taxable years
231 beginning on or after September 1, 1985, under s. 901 of the
232 Internal Revenue Code to any corporation which derived less than
233 20 percent of its gross income or loss for its taxable year
234 ended in 1984 from sources within the United States, as
235 described in s. 861(a)(2)(A) of the Internal Revenue Code, not
236 including credits allowed under ss. 902 and 960 of the Internal
237 Revenue Code, withholding taxes on dividends within the meaning
238 of sub-subparagraph 2.a., and withholding taxes on royalties,
239 interest, technical service fees, and capital gains.
240 7.6. Notwithstanding any other provision of this code,
241 except with respect to amounts subtracted pursuant to
242 subparagraphs 1. and 4. 3., any increment of any apportionment
243 factor which is directly related to an increment of gross
244 receipts or income which is deducted, subtracted, or otherwise
245 excluded in determining adjusted federal income shall be
246 excluded from both the numerator and denominator of such
247 apportionment factor. Further, all valuations made for
248 apportionment factor purposes shall be made on a basis
249 consistent with the taxpayer’s method of accounting for federal
250 income tax purposes.
251 (c) Installment sales occurring after October 19, 1980.—
252 1. In the case of any disposition made after October 19,
253 1980, the income from an installment sale shall be taken into
254 account for the purposes of this code in the same manner that
255 such income is taken into account for federal income tax
256 purposes.
257 2. Any taxpayer who regularly sells or otherwise disposes
258 of personal property on the installment plan and reports the
259 income therefrom on the installment method for federal income
260 tax purposes under s. 453(a) of the Internal Revenue Code shall
261 report such income in the same manner under this code.
262 (d) Nonallowable deductions.—A deduction for net operating
263 losses, net capital losses, or excess contributions deductions
264 under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
265 Code which has been allowed in a prior taxable year for Florida
266 tax purposes shall not be allowed for Florida tax purposes,
267 notwithstanding the fact that such deduction has not been fully
268 utilized for federal tax purposes.
269 (e) Adjustments related to federal acts.—Taxpayers shall be
270 required to make the adjustments prescribed in this paragraph
271 for Florida tax purposes with respect to certain tax benefits
272 received pursuant to the Economic Stimulus Act of 2008; the
273 American Recovery and Reinvestment Act of 2009; the Small
274 Business Jobs Act of 2010; the Tax Relief, Unemployment
275 Insurance Reauthorization, and Job Creation Act of 2010; the
276 American Taxpayer Relief Act of 2012; the Tax Increase
277 Prevention Act of 2014; the Consolidated Appropriations Act,
278 2016; the Tax Cuts and Jobs Act of 2017; and the Coronavirus
279 Aid, Relief, and Economic Security Act of 2020.
280 1.a. There shall be added to such taxable income an amount
281 equal to 100 percent of any amount deducted for federal income
282 tax purposes as bonus depreciation for the taxable year pursuant
283 to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as
284 amended by s. 103 of Pub. L. No. 110-185; s. 1201 of Pub. L. No.
285 111-5; s. 2022 of Pub. L. No. 111-240; s. 401 of Pub. L. No.
286 111-312; s. 331 of Pub. L. No. 112-240; s. 125 of Pub. L. No.
287 113-295; s. 143 of Division Q of Pub. L. No. 114-113; and s.
288 13201 of Pub. L. No. 115-97, for property placed in service
289 after December 31, 2007, and before January 1, 2027.
290 b. For the taxable year and for each of the 6 subsequent
291 taxable years, there shall be subtracted from such taxable
292 income an amount equal to one-seventh of the amount by which
293 taxable income was increased pursuant to this subparagraph,
294 notwithstanding any sale or other disposition of the property
295 that is the subject of the adjustments and regardless of whether
296 such property remains in service in the hands of the taxpayer.
297 c. The provisions of sub-subparagraph b. do not apply to
298 amounts by which taxable income was increased pursuant to this
299 subparagraph for amounts deducted for federal income tax
300 purposes as bonus depreciation for qualified improvement
301 property as defined in s. 168(e)(6) of the Internal Revenue Code
302 of 1986, as amended by s. 13204 of Pub. L. No. 115-97.
303 2. There shall be added to such taxable income an amount
304 equal to 100 percent of any amount in excess of $128,000
305 deducted for federal income tax purposes for the taxable year
306 pursuant to s. 179 of the Internal Revenue Code of 1986, as
307 amended by s. 102 of Pub. L. No. 110-185; s. 1202 of Pub. L. No.
308 111-5; s. 2021 of Pub. L. No. 111-240; s. 402 of Pub. L. No.
309 111-312; s. 315 of Pub. L. No. 112-240; and s. 127 of Pub. L.
310 No. 113-295, for taxable years beginning after December 31,
311 2007, and before January 1, 2015. For the taxable year and for
312 each of the 6 subsequent taxable years, there shall be
313 subtracted from such taxable income one-seventh of the amount by
314 which taxable income was increased pursuant to this
315 subparagraph, notwithstanding any sale or other disposition of
316 the property that is the subject of the adjustments and
317 regardless of whether such property remains in service in the
318 hands of the taxpayer.
319 3. There shall be added to such taxable income an amount
320 equal to the amount of deferred income not included in such
321 taxable income pursuant to s. 108(i)(1) of the Internal Revenue
322 Code of 1986, as amended by s. 1231 of Pub. L. No. 111-5. There
323 shall be subtracted from such taxable income an amount equal to
324 the amount of deferred income included in such taxable income
325 pursuant to s. 108(i)(1) of the Internal Revenue Code of 1986,
326 as amended by s. 1231 of Pub. L. No. 111-5.
327 4. For taxable years beginning after December 31, 2018, and
328 before January 1, 2021, there shall be added to such taxable
329 income an amount equal to the excess, if any, of:
330 a. One hundred percent of any amount deducted for federal
331 income tax purposes as business interest expense for the taxable
332 year pursuant to s. 163(j) of the Internal Revenue Code of 1986,
333 as amended by s. 2306 of Pub. L. No. 116-136; over
334 b. One hundred percent of the amount that would be
335 deductible for federal income tax purposes as business interest
336 expense for the taxable year if calculated pursuant to s. 163(j)
337 of the Internal Revenue Code of 1986, as amended by s. 13301 of
338 Pub. L. No. 115-97.
339
340 Any expense added back pursuant to this subparagraph shall be
341 treated as a disallowed business expense carryforward from prior
342 years for the year or years following the addition, until such
343 time as the expense has been used.
344 5. With respect to qualified improvement property as
345 defined in s. 168(e)(6) of the Internal Revenue Code of 1986, as
346 amended by s. 13204 of Pub. L. No. 115-97, that was placed in
347 service on or after January 1, 2018:
348 a. There shall be added to such taxable income an amount
349 equal to 100 percent of any amount deducted for federal income
350 tax purposes under s. 167(a) of the Internal Revenue Code of
351 1986. There shall be subtracted an amount equal to the amount of
352 depreciation that would have been deductible pursuant to s.
353 167(a) of the Internal Revenue Code of 1986 in effect on January
354 1, 2020 and without regard to s. 2307 of Pub. L. No. 116-136,
355 notwithstanding any sale or other disposition of the property
356 that is the subject of the adjustments and regardless of whether
357 such property remains in service in the hands of the taxpayer.
358 b. The department may adopt rules necessary to administer
359 the provisions of this subparagraph, including rules, forms, and
360 guidelines for computing depreciation on qualified improvement
361 property, as defined in s. 168(e)(6) of the Internal Revenue
362 Code of 1986.
363 6. For taxable years beginning after December 31, 2020, and
364 before January 1, 2026, the changes made to the Internal Revenue
365 Code by Pub. L. No. 116-260, Division EE, Title I, s. 116 and
366 Title II, s. 210 shall not apply to this chapter. Taxable income
367 under this section shall be calculated as though changes made by
368 those sections were not made to the Internal Revenue Code. The
369 Department of Revenue may adopt rules necessary to administer
370 the provisions of this subparagraph, including rules, forms, and
371 guidelines for treatment of expenses and depreciation related to
372 these changes.
373 7. Subtractions available under this paragraph may be
374 transferred to the surviving or acquiring entity following a
375 merger or acquisition and used in the same manner and with the
376 same limitations as specified by this paragraph.
377 8. The additions and subtractions specified in this
378 paragraph are intended to adjust taxable income for Florida tax
379 purposes, and, notwithstanding any other provision of this code,
380 such additions and subtractions shall be permitted to change a
381 taxpayer’s net operating loss for Florida tax purposes.
382 (2) For purposes of this section, a taxpayer’s taxable
383 income for the taxable year means taxable income as defined in
384 s. 63 of the Internal Revenue Code and properly reportable for
385 federal income tax purposes for the taxable year, but subject to
386 the limitations set forth in paragraph (1)(b) with respect to
387 the deductions provided by ss. 172 (relating to net operating
388 losses), 170(d)(2) (relating to excess charitable
389 contributions), 404(a)(1)(D) (relating to excess pension trust
390 contributions), 404(a)(3)(A) and (B) (to the extent relating to
391 excess stock bonus and profit-sharing trust contributions), and
392 1212 (relating to capital losses) of the Internal Revenue Code,
393 except that, subject to the same limitations, the term:
394 (f) “Taxable income,” in the case of a corporation which is
395 a member of an affiliated group of corporations filing a
396 consolidated income tax return for the taxable year for federal
397 income tax purposes, means taxable income of such corporation
398 for federal income tax purposes as if such corporation had filed
399 a separate federal income tax return for the taxable year and
400 each preceding taxable year for which it was a member of an
401 affiliated group, unless a consolidated return for the taxpayer
402 and others is required or elected under s. 220.131;
403 Section 3. Section 220.131, Florida Statutes, is repealed.
404 Section 4. Section 220.136, Florida Statutes, is created to
405 read:
406 220.136 Determination of the members of a unitary combined
407 group.—A corporation having 50 percent or more of its
408 outstanding voting stock directly or indirectly owned or
409 controlled by a unitary combined group is a member of the
410 unitary combined group. A corporation having less than 50
411 percent of its outstanding voting stock directly or indirectly
412 owned or controlled by a unitary combined group is a member of
413 the unitary combined group if the business activities of the
414 corporation show that the corporation is a member of the unitary
415 combined group. All of the income of a corporation that is a
416 member of a unitary combined group is unitary. For purposes of
417 this subsection, the attribution rules of 26 U.S.C. s. 318 must
418 be used to determine whether voting stock is indirectly owned.
419 Section 5. Section 220.1363, Florida Statutes, is created
420 to read:
421 220.1363 Unitary combined groups; special requirements.—
422 (1) For purposes of this section, the term “unitary
423 combined reporting method” means a method used to determine the
424 taxable business profits of a group of entities conducting a
425 unitary business. Under this method, the net income of the
426 entities must be added together, along with the additions and
427 subtractions under s. 220.13, and apportioned to this state as a
428 single taxpayer under ss. 220.15 and 220.151. However, each
429 special industry member included in a unitary combined group
430 return, which would otherwise be permitted to use a special
431 method of apportionment under s. 220.151, shall convert its
432 single-factor apportionment to a three-factor apportionment of
433 property, payroll, and sales. The special industry member shall
434 calculate the denominator of its property, payroll, and sales
435 factors in the same manner as those denominators are calculated
436 by members that are not special industry members. The numerator
437 of its sales, property, and payroll factors is the product of
438 the denominator of each factor multiplied by the premiums or
439 revenue-miles-factor ratio otherwise applicable under s.
440 220.151.
441 (2) All members of a unitary combined group must use the
442 unitary combined reporting method, under which:
443 (a) Adjusted federal income, for purposes of s. 220.12,
444 means the sum of adjusted federal income of all members of the
445 unitary combined group as determined for a concurrent taxable
446 year.
447 (b) The numerators and denominators of the apportionment
448 factors must be calculated for all members of the unitary
449 combined group combined.
450 (c) Intercompany sales transactions between members of the
451 unitary combined group are not included in the numerator or
452 denominator of the sales factor under ss. 220.15 and 220.151,
453 regardless of whether indicia of a sale exist.
454 (d) For sales of intangibles, including, but not limited
455 to, accounts receivable, notes, bonds, and stock, which are made
456 to entities outside the group, only the net proceeds are
457 included in the numerator and denominator of the sales factor.
458
459 As used in this subsection, the term “sale” includes, but is not
460 limited to, loans, payments for the use of intangibles,
461 dividends, and management fees.
462 (3)(a) If a parent corporation is a member of the unitary
463 combined group and has nexus with this state, a single unitary
464 combined group return must be filed in the name and under the
465 federal employer identification number of the parent
466 corporation. If the unitary combined group does not have a
467 parent corporation, if the parent corporation is not a member of
468 the unitary combined group, or if the parent corporation does
469 not have nexus with this state, the members of the unitary
470 combined group must choose a member subject to the tax imposed
471 by this chapter to file the return. The members of the unitary
472 combined group may not choose another member to file a corporate
473 income tax return in subsequent years unless the filing member
474 does not maintain nexus with this state or does not remain a
475 member of the unitary combined group. The return must be signed
476 by an authorized officer of the filing member as the agent for
477 the unitary combined group.
478 (b) If members of a unitary combined group have different
479 taxable years, the taxable year of a majority of the members of
480 the unitary combined group is the taxable year of the unitary
481 combined group. If the taxable years of a majority of the
482 members of a unitary combined group do not correspond, the
483 taxable year of the member that must file the return for the
484 unitary combined group is the taxable year of the unitary
485 combined group.
486 (c)1. A member of a unitary combined group having a taxable
487 year that does not correspond to the taxable year of the unitary
488 combined group shall determine its income for inclusion on the
489 tax return for the unitary combined group. The member shall use:
490 a. The precise amount of taxable income received during the
491 months corresponding to the taxable year of the unitary combined
492 group, if the precise amount can be readily determined from the
493 member’s books and records.
494 b. The taxable income of the member converted to conform to
495 the taxable year of the unitary combined group on the basis of
496 the number of months falling within the taxable year of the
497 unitary combined group. For example, if the taxable year of the
498 unitary combined group is a calendar year and a member operates
499 on a fiscal year ending on April 30, the income of the member
500 must include 8/12 of the income from the current taxable year
501 and 4/12 of the income from the preceding taxable year. This
502 method to determine the income of a member may be used only if
503 the return can be timely filed after the end of the taxable year
504 of the unitary combined group.
505 c. The taxable income of the member during its taxable year
506 that ends within the taxable year of the unitary combined group.
507 2. The method of determining the income of a member of a
508 unitary combined group whose taxable year does not correspond to
509 the taxable year of the unitary combined group may not change as
510 long as the member remains a member of the unitary combined
511 group. The apportionment factors for the member must be applied
512 to the income of the member for the taxable year of the unitary
513 combined group.
514 (4)(a) A unitary combined group return must include a
515 computational schedule that:
516 1. Combines the federal income of all members of the
517 unitary combined group;
518 2. Shows all intercompany eliminations;
519 3. Shows Florida additions and subtractions under s.
520 220.13; and
521 4. Shows the calculation of the combined apportionment
522 factors.
523 (b) In addition to its return, a unitary combined group
524 shall also file a domestic disclosure spreadsheet. The
525 spreadsheet must fully disclose:
526 1. The income reported to each state;
527 2. The state tax liability;
528 3. The method used for apportioning or allocating income to
529 the various states; and
530 4. Other information required by department rule in order
531 to determine the proper amount of tax due to each state and to
532 identify the unitary combined group.
533 (5) The director may take any of the following actions if
534 he or she believes that such action is necessary to prevent
535 substantial tax avoidance by the unitary combined group:
536 (a) Add the income or apportionment factors of a related
537 entity to the unitary combined group return if the related
538 entity is not subject to corporate income tax.
539 (b) Adjust the income or apportionment factor of a member
540 of the unitary combined group if such member is subject to
541 industry-specific apportionment rules.
542 (6) The department may adopt rules and forms to administer
543 this section. The Legislature intends to grant the department
544 extensive authority to adopt rules and forms describing and
545 defining principles for determining the existence of a unitary
546 combined business, definitions of common control, methods of
547 reporting, and related forms, principles, and other definitions.
548 Section 6. Subsections (2), (3), and (4) of section 220.14,
549 Florida Statutes, are amended to read:
550 220.14 Exemption.—
551 (2) In the case of a taxable year for a period of less than
552 12 months, the exemption allowed by this section must shall be
553 prorated on the basis of the number of days in such year to 365
554 days, or, in a leap year, 366 days.
555 (3) Only one exemption shall be allowed to taxpayers filing
556 a unitary combined group consolidated return under this code.
557 (4) Notwithstanding any other provision of this code, not
558 more than one exemption under this section may be allowed to the
559 Florida members of a controlled group of corporations, as
560 defined in s. 1563 of the Internal Revenue Code with respect to
561 taxable years ending on or after December 31, 1970, filing
562 separate returns under this code. The exemption described in
563 this section shall be divided equally among such Florida members
564 of the group, unless all of such members consent, at such time
565 and in such manner as the department shall by regulation
566 prescribe, to an apportionment plan providing for an unequal
567 allocation of such exemption.
568 Section 7. Paragraphs (b) and (c) of subsection (5) of
569 section 220.15, Florida Statutes, are amended to read:
570 220.15 Apportionment of adjusted federal income.—
571 (5) The sales factor is a fraction the numerator of which
572 is the total sales of the taxpayer in this state during the
573 taxable year or period and the denominator of which is the total
574 sales of the taxpayer everywhere during the taxable year or
575 period.
576 (b)1. Sales of tangible personal property occur in this
577 state if:
578 a. The property is delivered or shipped to a purchaser,
579 other than the United States Government, within this state,
580 regardless of the f.o.b. point, other conditions of the sale, or
581 ultimate destination of the property, unless shipment is made
582 via a common or contract carrier; or
583 b. The property is shipped from an office, a store, a
584 warehouse, a factory, or other place of storage in this state,
585 and the purchaser is the United States Government or the
586 taxpayer is not taxable in the purchaser’s state.
587
588 However, for industries in NAICS National Number 311411, if the
589 ultimate destination of the product is to a location outside
590 this state, regardless of the method of shipment or f.o.b.
591 point, the sale shall not be deemed to occur in this state. As
592 used in this paragraph, “NAICS” means those classifications
593 contained in the North American Industry Classification System,
594 as published in 2007 by the Office of Management and Budget,
595 Executive Office of the President.
596 2. When citrus fruit is delivered by a cooperative for a
597 grower-member, by a grower-member to a cooperative, or by a
598 grower-participant to a Florida processor, the sales factor for
599 the growers for such citrus fruit delivered to such processor
600 shall be the same as the sales factor for the most recent
601 taxable year of that processor. That sales factor, expressed
602 only as a percentage and not in terms of the dollar volume of
603 sales, so as to protect the confidentiality of the sales of the
604 processor, shall be furnished on the request of such a grower
605 promptly after it has been determined for that taxable year.
606 3. Reimbursement of expenses under an agency contract
607 between a cooperative, a grower-member of a cooperative, or a
608 grower and a processor is not a sale within this state.
609 (c) Sales of a financial organization, including, but not
610 limited to, banking and savings institutions, investment
611 companies, real estate investment trusts, and brokerage
612 companies, occur in this state if derived from:
613 1. Fees, commissions, or other compensation for financial
614 services rendered within this state;
615 2. Gross profits from trading in stocks, bonds, or other
616 securities managed within this state;
617 3. Interest received within this state, other than interest
618 from loans secured by mortgages, deeds of trust, or other liens
619 upon real or tangible personal property located without this
620 state, and dividends received within this state;
621 4. Interest charged to customers at places of business
622 maintained within this state for carrying debit balances of
623 margin accounts, without deduction of any costs incurred in
624 carrying such accounts;
625 5. Interest, fees, commissions, or other charges or gains
626 from loans secured by mortgages, deeds of trust, or other liens
627 upon real or tangible personal property located in this state or
628 from installment sale agreements originally executed by a
629 taxpayer or the taxpayer’s agent to sell real or tangible
630 personal property located in this state;
631 6. Rents from real or tangible personal property located in
632 this state; or
633 7. Any other gross income, including other interest,
634 resulting from the operation as a financial organization within
635 this state.
636
637 In computing the amounts under this paragraph, any amount
638 received by a member of an affiliated group (determined under s.
639 1504(a) of the Internal Revenue Code, but without reference to
640 whether any such corporation is an “includable corporation”
641 under s. 1504(b) of the Internal Revenue Code) from another
642 member of such group shall be included only to the extent such
643 amount exceeds expenses of the recipient directly related
644 thereto.
645 Section 8. Paragraph (f) of subsection (1) of section
646 220.183, Florida Statutes, is amended to read:
647 220.183 Community contribution tax credit.—
648 (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
649 CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
650 SPENDING.—
651 (f) A taxpayer who files a Florida consolidated return as a
652 member of an affiliated group pursuant to s. 220.131(1) may be
653 allowed the credit on a consolidated return basis.
654 Section 9. Paragraphs (e) through (k) of subsection (2) of
655 section 220.1845, Florida Statutes, are redesignated as
656 paragraphs (d) through (j), respectively, and paragraphs (b) and
657 (c) and present paragraph (d) of that subsection are amended to
658 read:
659 220.1845 Contaminated site rehabilitation tax credit.—
660 (2) AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.—
661 (b) A tax credit applicant, or multiple tax credit
662 applicants working jointly to clean up a single site, may not be
663 granted more than $500,000 per year in tax credits for each site
664 voluntarily rehabilitated. Multiple tax credit applicants shall
665 be granted tax credits in the same proportion as their
666 contribution to payment of cleanup costs. Subject to the same
667 conditions and limitations as provided in this section, a
668 municipality, county, or other tax credit applicant which
669 voluntarily rehabilitates a site may receive not more than
670 $500,000 per year in tax credits which it can subsequently
671 transfer subject to the provisions in paragraph (f)(g).
672 (c) If the credit granted under this section is not fully
673 used in any one year because of insufficient tax liability on
674 the part of the corporation, the unused amount may be carried
675 forward for up to 5 years. The carryover credit may be used in a
676 subsequent year if the tax imposed by this chapter for that year
677 exceeds the credit for which the corporation is eligible in that
678 year after applying the other credits and unused carryovers in
679 the order provided by s. 220.02(8). If during the 5-year period
680 the credit is transferred, in whole or in part, pursuant to
681 paragraph (f)(g), each transferee has 5 years after the date of
682 transfer to use its credit.
683 (d) A taxpayer that files a consolidated return in this
684 state as a member of an affiliated group under s. 220.131(1) may
685 be allowed the credit on a consolidated return basis up to the
686 amount of tax imposed upon the consolidated group.
687 Section 10. Subsection (2) of section 220.1875, Florida
688 Statutes, is amended to read:
689 220.1875 Credit for contributions to eligible nonprofit
690 scholarship-funding organizations.—
691 (2) A taxpayer who files a Florida consolidated return as a
692 member of an affiliated group pursuant to s. 220.131(1) may be
693 allowed the credit on a consolidated return basis; however, the
694 total credit taken by the affiliated group is subject to the
695 limitation established under subsection (1).
696 Section 11. Subsection (2) of section 220.1876, Florida
697 Statutes, is amended to read:
698 220.1876 Credit for contributions to the New Worlds Reading
699 Initiative.—
700 (2) A taxpayer who files a Florida consolidated return as a
701 member of an affiliated group pursuant to s. 220.131(1) may be
702 allowed the credit on a consolidated return basis; however, the
703 total credit taken by the affiliated group is subject to the
704 limitation established under subsection (1).
705 Section 12. Subsection (2) of section 220.1877, Florida
706 Statutes, is amended to read:
707 220.1877 Credit for contributions to eligible charitable
708 organizations.—
709 (2) A taxpayer who files a Florida consolidated return as a
710 member of an affiliated group pursuant to s. 220.131(1) may be
711 allowed the credit on a consolidated return basis; however, the
712 total credit taken by the affiliated group is subject to the
713 limitation established under subsection (1).
714 Section 13. Paragraphs (a) and (c) of subsection (3) of
715 section 220.191, Florida Statutes, are amended to read:
716 220.191 Capital investment tax credit.—
717 (3)(a) Notwithstanding subsection (2), an annual credit
718 against the tax imposed by this chapter shall be granted to a
719 qualifying business which establishes a qualifying project
720 pursuant to subparagraph (1)(g)3., in an amount equal to the
721 lesser of $15 million or 5 percent of the eligible capital costs
722 made in connection with a qualifying project, for a period not
723 to exceed 20 years beginning with the commencement of operations
724 of the project. The tax credit shall be granted against the
725 corporate income tax liability of the qualifying business and as
726 further provided in paragraph (c). The total tax credit provided
727 pursuant to this subsection shall be equal to no more than 100
728 percent of the eligible capital costs of the qualifying project.
729 (c) The credit granted under this subsection may be used in
730 whole or in part by the qualifying business or any corporation
731 that is either a member of that qualifying business’s affiliated
732 group of corporations, is a related entity taxable as a
733 cooperative under subchapter T of the Internal Revenue Code, or,
734 if the qualifying business is an entity taxable as a cooperative
735 under subchapter T of the Internal Revenue Code, is related to
736 the qualifying business. Any entity related to the qualifying
737 business may continue to file as a member of a Florida-nexus
738 consolidated group pursuant to a prior election made under s.
739 220.131(1), Florida Statutes (1985), even if the parent of the
740 group changes due to a direct or indirect acquisition of the
741 former common parent of the group. Any credit can be used by any
742 of the affiliated companies or related entities referenced in
743 this paragraph to the same extent as it could have been used by
744 the qualifying business. However, any such use shall not operate
745 to increase the amount of the credit or extend the period within
746 which the credit must be used.
747 Section 14. Paragraphs (f) through (j) of subsection (3) of
748 section 220.193, Florida Statutes, are redesignated as
749 paragraphs (e) through (i), respectively, and paragraph (c) and
750 present paragraph (e) of that subsection are amended to read:
751 220.193 Florida renewable energy production credit.—
752 (3) An annual credit against the tax imposed by this
753 section shall be allowed to a taxpayer, based on the taxpayer’s
754 production and sale of electricity from a new or expanded
755 Florida renewable energy facility. For a new facility, the
756 credit shall be based on the taxpayer’s sale of the facility’s
757 entire electrical production. For an expanded facility, the
758 credit shall be based on the increases in the facility’s
759 electrical production that are achieved after May 1, 2012.
760 (c) If the amount of credits applied for each year exceeds
761 the amount authorized in paragraph (f)(g), the Department of
762 Agriculture and Consumer Services shall allocate credits to
763 qualified applicants based on the following priority:
764 1. An applicant who places a new facility in operation
765 after May 1, 2012, shall be allocated credits first, up to a
766 maximum of $250,000 each, with any remaining credits to be
767 granted pursuant to subparagraph 3., but if the claims for
768 credits under this subparagraph exceed the state fiscal year cap
769 in paragraph (f)(g), credits shall be allocated pursuant to this
770 subparagraph on a prorated basis based upon each applicant’s
771 qualified production and sales as a percentage of total
772 production and sales for all applicants in this category for the
773 fiscal year.
774 2. An applicant who does not qualify under subparagraph 1.
775 but who claims a credit of $50,000 or less shall be allocated
776 credits next, but if the claims for credits under this
777 subparagraph, combined with credits allocated in subparagraph
778 1., exceed the state fiscal year cap in paragraph (f)(g),
779 credits shall be allocated pursuant to this subparagraph on a
780 prorated basis based upon each applicant’s qualified production
781 and sales as a percentage of total qualified production and
782 sales for all applicants in this category for the fiscal year.
783 3. An applicant who does not qualify under subparagraph 1.
784 or subparagraph 2. and an applicant whose credits have not been
785 fully allocated under subparagraph 1. shall be allocated credits
786 next. If there is insufficient capacity within the amount
787 authorized for the state fiscal year in paragraph (f)(g), and
788 after allocations pursuant to subparagraphs 1. and 2., the
789 credits allocated under this subparagraph shall be prorated
790 based upon each applicant’s unallocated claims for qualified
791 production and sales as a percentage of total unallocated claims
792 for qualified production and sales of all applicants in this
793 category, up to a maximum of $1 million per taxpayer per state
794 fiscal year. If, after application of this $1 million cap, there
795 is excess capacity under the state fiscal year cap in paragraph
796 (f)(g) in any state fiscal year, that remaining capacity shall
797 be used to allocate additional credits with priority given in
798 the order set forth in this subparagraph and without regard to
799 the $1 million per taxpayer cap.
800 (e) A taxpayer that files a consolidated return in this
801 state as a member of an affiliated group under s. 220.131(1) may
802 be allowed the credit on a consolidated return basis up to the
803 amount of tax imposed upon the consolidated group.
804 Section 15. Section 220.51, Florida Statutes, is amended to
805 read:
806 220.51 Adoption Promulgation of rules and regulations.—In
807 accordance with the Administrative Procedure Act, chapter 120,
808 the department is authorized to make, adopt promulgate, and
809 enforce such reasonable rules and regulations, and to prescribe
810 such forms relating to the administration and enforcement of the
811 provisions of this code, as it may deem appropriate, including:
812 (1) Rules for initial implementation of this code and for
813 taxpayers’ transitional taxable years commencing before and
814 ending after January 1, 1972; and
815 (2) Rules or regulations to clarify whether certain groups,
816 organizations, or associations formed under the laws of this
817 state or any other state, country, or jurisdiction shall be
818 deemed “taxpayers” for the purposes of this code, in accordance
819 with the legislative declarations of intent in s. 220.02; and
820 (3) Regulations relating to consolidated reporting for
821 affiliated groups of corporations, in order to provide for an
822 equitable and just administration of this code with respect to
823 multicorporate taxpayers.
824 Section 16. Section 220.64, Florida Statutes, is amended to
825 read:
826 220.64 Other provisions applicable to franchise tax.—To the
827 extent that they are not manifestly incompatible with the
828 provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
829 X of this code and ss. 220.12, 220.13, 220.136, 220.1363,
830 220.15, and 220.16 apply to the franchise tax imposed by this
831 part. Under rules prescribed by the department in s. 220.131, a
832 consolidated return may be filed by any affiliated group of
833 corporations composed of one or more banks or savings
834 associations, its or their Florida parent corporations
835 corporation, and any nonbank or nonsavings subsidiaries of such
836 parent corporations corporation.
837 Section 17. Paragraph (g) and (h) of subsection (4) of
838 section 288.1254, Florida Statutes, are redesignated as
839 paragraphs (f) and (g), respectively, and present paragraph (f)
840 of subsection (4) and paragraph (a) of subsection (5) are
841 amended to read:
842 288.1254 Entertainment industry financial incentive
843 program.—
844 (4) TAX CREDIT ELIGIBILITY; TAX CREDIT AWARDS; QUEUES;
845 ELECTION AND DISTRIBUTION; CARRYFORWARD; CONSOLIDATED RETURNS;
846 PARTNERSHIP AND NONCORPORATE DISTRIBUTIONS; MERGERS AND
847 ACQUISITIONS.—
848 (f) Consolidated returns.—A certified production company
849 that files a Florida consolidated return as a member of an
850 affiliated group under s. 220.131(1) may be allowed the credit
851 on a consolidated return basis up to the amount of the tax
852 imposed upon the consolidated group under chapter 220.
853 (5) TRANSFER OF TAX CREDITS.—
854 (a) Authorization.—Upon application to the Office of Film
855 and Entertainment and approval by the department, a certified
856 production company, or a partner or member that has received a
857 distribution under paragraph (4)(f)(4)(g), may elect to
858 transfer, in whole or in part, any unused credit amount granted
859 under this section. An election to transfer any unused tax
860 credit amount under chapter 212 or chapter 220 must be made no
861 later than 5 years after the date the credit is awarded, after
862 which period the credit expires and may not be used. The
863 department shall notify the Department of Revenue of the
864 election and transfer.
865 Section 18. Subsections (9) and (10) of section 376.30781,
866 Florida Statutes, are amended to read:
867 376.30781 Tax credits for rehabilitation of drycleaning
868 solvent-contaminated sites and brownfield sites in designated
869 brownfield areas; application process; rulemaking authority;
870 revocation authority.—
871 (9) On or before May 1, the Department of Environmental
872 Protection shall inform each tax credit applicant that is
873 subject to the January 31 annual application deadline of the
874 applicant’s eligibility status and the amount of any tax credit
875 due. The department shall provide each eligible tax credit
876 applicant with a tax credit certificate that must be submitted
877 with its tax return to the Department of Revenue to claim the
878 tax credit or be transferred pursuant to s. 220.1845(2)(f) s.
879 220.1845(2)(g). The May 1 deadline for annual site
880 rehabilitation tax credit certificate awards shall not apply to
881 any tax credit application for which the department has issued a
882 notice of deficiency pursuant to subsection (8). The department
883 shall respond within 90 days after receiving a response from the
884 tax credit applicant to such a notice of deficiency. Credits may
885 not result in the payment of refunds if total credits exceed the
886 amount of tax owed.
887 (10) For solid waste removal, new health care facility or
888 health care provider, and affordable housing tax credit
889 applications, the Department of Environmental Protection shall
890 inform the applicant of the department’s determination within 90
891 days after the application is deemed complete. Each eligible tax
892 credit applicant shall be informed of the amount of its tax
893 credit and provided with a tax credit certificate that must be
894 submitted with its tax return to the Department of Revenue to
895 claim the tax credit or be transferred pursuant to s.
896 220.1845(2)(f) s. 220.1845(2)(g). Credits may not result in the
897 payment of refunds if total credits exceed the amount of tax
898 owed.
899 Section 19. Transitional rules.—
900 (1) For the first taxable year beginning on or after
901 January 1, 2024, a taxpayer that filed a Florida corporate
902 income tax return in the preceding taxable year and that is a
903 member of a unitary combined group shall compute its income
904 together with all members of its unitary combined group and file
905 a combined Florida corporate income tax return with all members
906 of its unitary combined group.
907 (2) An affiliated group of corporations which filed a
908 Florida consolidated corporate income tax return pursuant to an
909 election provided in former s. 220.131, Florida Statutes, shall
910 cease filing a Florida consolidated return for taxable years
911 beginning on or after January 1, 2024, and shall file a combined
912 Florida corporate income tax return with all members of its
913 unitary combined group.
914 (3) An affiliated group of corporations which filed a
915 Florida consolidated corporate income tax return pursuant to the
916 election in s. 220.131(1), Florida Statutes (1985), which
917 allowed the affiliated group to make an election within 90 days
918 after December 20, 1984, or upon filing the taxpayer’s first
919 return after December 20, 1984, whichever was later, shall cease
920 filing a Florida consolidated corporate income tax return using
921 that method for taxable years beginning on or after January 1,
922 2024, and shall file a combined Florida corporate income tax
923 return with all members of its unitary combined group.
924 (4) A taxpayer that is not a member of a unitary combined
925 group remains subject to chapter 220, Florida Statutes, and
926 shall file a separate Florida corporate income tax return as
927 previously required.
928 (5) For taxable years beginning on or after January 1,
929 2024, a tax return for a member of a unitary combined group must
930 be a combined Florida corporate income tax return that includes
931 tax information for all members of the unitary combined group.
932 The tax return must be filed by a member that has a nexus with
933 this state.
934 Section 20. Any additional revenue received as a result of
935 the enactment of this act must be deposited into the General
936 Revenue Fund.
937 Section 21. This act shall take effect July 1, 2023.