Bill Summary – FastDemocracy

       Florida Senate - 2023                                    SB 1144
       
       
        
       By Senator Thompson
       
       
       
       
       
       15-01053B-23                                          20231144__
                      A bill to be entitled                      
       An act relating to corporate income tax; amending s.
       220.03, F.S.; revising and providing definitions;
       amending s. 220.13, F.S.; revising the definition of
       the term “adjusted federal income” to prohibit
       specified deductions, limit certain carryovers, and
       require subtractions of certain dividends paid and
       received within a unitary combined group to determine
       subtractions from taxable income; conforming
       provisions to changes made by the act; repealing s.
       220.131, F.S., relating to the adjusted federal income
       of affiliated groups; creating s. 220.136, F.S.;
       specifying circumstances under which a corporation is
       a member of a unitary combined group; creating s.
       220.1363, F.S.; defining the term “unitary combined
       reporting method”; specifying requirements for,
       limitations on, and prohibitions in calculating and
       reporting income in a unitary combined group return;
       requiring all members of a unitary combined group to
       use the unitary combined reporting method; defining
       the term “sale”; specifying requirements for
       designating the filing member and the taxable year of
       the unitary combined group; specifying income
       reporting requirements for certain members of the
       unitary combined group; requiring that a unitary
       combined group return include a specified
       computational schedule and domestic disclosure
       spreadsheet; authorizing the executive director of the
       Department of Revenue to undertake certain actions in
       specified circumstances; authorizing the Department of
       Revenue to adopt rules; providing legislative intent
       regarding the adoption of rules; amending s. 220.14,
       F.S.; revising the calculation for prorating a certain
       corporate income tax exemption to reflect leap years;
       conforming a provision to changes made by the act;
       amending s. 220.15, F.S.; revising provisions
       determining when certain sales are considered to have
       occurred in this state; amending ss. 220.183,
       220.1845, 220.1875, 220.1876, 220.1877, 220.191,
       220.193, and 220.51, F.S.; conforming provisions to
       changes made by the act; amending s. 220.64, F.S.;
       providing applicability of unitary combined group
       provisions to the franchise tax; conforming provisions
       to changes made by the act; amending ss. 288.1254 and
       376.30781, F.S.; conforming provisions to changes made
       by the act; providing, beginning on a specified date,
       requirements for corporate income tax return filings
       for certain taxpayers; requiring that recaptured funds
       be deposited into the General Revenue Fund; providing
       an effective date.
        
Be It Enacted by the Legislature of the State of Florida:

       Section 1. Paragraph (z) of subsection (1) of section
220.03, Florida Statutes, is amended, and paragraph (gg) is
added to that subsection, to read:
       220.03 Definitions.—
       (1) SPECIFIC TERMS.—When used in this code, and when not
otherwise distinctly expressed or manifestly incompatible with
the intent thereof, the following terms shall have the following
meanings:
       (z) “Taxpayer” means any corporation subject to the tax
imposed by this code, and includes all corporations that are
members of a unitary combined group for which a consolidated
return is filed under s. 220.131. However, the term “taxpayer”
does not include a corporation having no individuals, (including
individuals employed by an affiliate,) receiving compensation in
this state as defined in s. 220.15 when the only property owned
or leased by the said corporation, (including an affiliate,) in
this state is located at the premises of a printer with which it
has contracted for printing, if such property consists of the
final printed product, property which becomes a part of the
final printed product, or property from which the printed
product is produced.
       (gg) “Unitary combined group” means a group of corporations
related through common ownership whose business activities are
integrated with, dependent upon, or contribute to a flow of
value among members of the group.
       Section 2. Subsection (1) and paragraph (f) of subsection
(2) of section 220.13, Florida Statutes, are amended to read:
       220.13 “Adjusted federal income” defined.—
       (1) The term “adjusted federal income” means an amount
equal to the taxpayer’s taxable income as defined in subsection
(2), or such taxable income of a unitary combined group more
than one taxpayer as provided in s. 220.1363 s. 220.131, for the
taxable year, adjusted as follows:
       (a) Additions.—There shall be added to such taxable income:
       1.a. The amount of any tax upon or measured by income,
excluding taxes based on gross receipts or revenues, paid or
accrued as a liability to the District of Columbia or any state
of the United States which is deductible from gross income in
the computation of taxable income for the taxable year.
       b. Notwithstanding sub-subparagraph a., if a credit taken
under s. 220.1875, s. 220.1876, or s. 220.1877 is added to
taxable income in a previous taxable year under subparagraph 11.
and is taken as a deduction for federal tax purposes in the
current taxable year, the amount of the deduction allowed shall
not be added to taxable income in the current year. The
exception in this sub-subparagraph is intended to ensure that
the credit under s. 220.1875, s. 220.1876, or s. 220.1877 is
added in the applicable taxable year and does not result in a
duplicate addition in a subsequent year.
       2. The amount of interest which is excluded from taxable
income under s. 103(a) of the Internal Revenue Code or any other
federal law, less the associated expenses disallowed in the
computation of taxable income under s. 265 of the Internal
Revenue Code or any other law, excluding 60 percent of any
amounts included in alternative minimum taxable income, as
defined in s. 55(b)(2) of the Internal Revenue Code, if the
taxpayer pays tax under s. 220.11(3).
       3. In the case of a regulated investment company or real
estate investment trust, an amount equal to the excess of the
net long-term capital gain for the taxable year over the amount
of the capital gain dividends attributable to the taxable year.
       4. That portion of the wages or salaries paid or incurred
for the taxable year which is equal to the amount of the credit
allowable for the taxable year under s. 220.181. This
subparagraph shall expire on the date specified in s. 290.016
for the expiration of the Florida Enterprise Zone Act.
       5. That portion of the ad valorem school taxes paid or
incurred for the taxable year which is equal to the amount of
the credit allowable for the taxable year under s. 220.182. This
subparagraph shall expire on the date specified in s. 290.016
for the expiration of the Florida Enterprise Zone Act.
       6. The amount taken as a credit under s. 220.195 which is
deductible from gross income in the computation of taxable
income for the taxable year.
       7. That portion of assessments to fund a guaranty
association incurred for the taxable year which is equal to the
amount of the credit allowable for the taxable year.
       8. In the case of a nonprofit corporation which holds a
pari-mutuel permit and which is exempt from federal income tax
as a farmers’ cooperative, an amount equal to the excess of the
gross income attributable to the pari-mutuel operations over the
attributable expenses for the taxable year.
       9. The amount taken as a credit for the taxable year under
s. 220.1895.
       10. Up to nine percent of the eligible basis of any
designated project which is equal to the credit allowable for
the taxable year under s. 220.185.
       11. Any amount taken as a credit for the taxable year under
s. 220.1875, s. 220.1876, or s. 220.1877. The addition in this
subparagraph is intended to ensure that the same amount is not
allowed for the tax purposes of this state as both a deduction
from income and a credit against the tax. This addition is not
intended to result in adding the same expense back to income
more than once.
       12. The amount taken as a credit for the taxable year under
s. 220.193.
       13. Any portion of a qualified investment, as defined in s.
288.9913, which is claimed as a deduction by the taxpayer and
taken as a credit against income tax pursuant to s. 288.9916.
       14. The costs to acquire a tax credit pursuant to s.
288.1254(5) that are deducted from or otherwise reduce federal
taxable income for the taxable year.
       15. The amount taken as a credit for the taxable year
pursuant to s. 220.194.
       16. The amount taken as a credit for the taxable year under
s. 220.196. The addition in this subparagraph is intended to
ensure that the same amount is not allowed for the tax purposes
of this state as both a deduction from income and a credit
against the tax. The addition is not intended to result in
adding the same expense back to income more than once.
       17. The amount taken as a credit for the taxable year
pursuant to s. 220.198.
       18. The amount taken as a credit for the taxable year
pursuant to s. 220.1915.
       (b) Subtractions.—
       1. There shall be subtracted from such taxable income:
       a. The net operating loss deduction allowable for federal
income tax purposes under s. 172 of the Internal Revenue Code
for the taxable year, except that any net operating loss that is
transferred pursuant to s. 220.194(6) may not be deducted by the
seller,
       b. The net capital loss allowable for federal income tax
purposes under s. 1212 of the Internal Revenue Code for the
taxable year,
       c. The excess charitable contribution deduction allowable
for federal income tax purposes under s. 170(d)(2) of the
Internal Revenue Code for the taxable year, and
       d. The excess contributions deductions allowable for
federal income tax purposes under s. 404 of the Internal Revenue
Code for the taxable year.

However, a net operating loss and a capital loss shall never be
carried back as a deduction to a prior taxable year, but all
deductions attributable to such losses shall be deemed net
operating loss carryovers and capital loss carryovers,
respectively, and treated in the same manner, to the same
extent, and for the same time periods as are prescribed for such
carryovers in ss. 172 and 1212, respectively, of the Internal
Revenue Code. A deduction is not allowed for net operating
losses, net capital losses, or excess contribution deductions
under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404 for a member
of a unitary combined group which is not a United States member.
Carryovers of net operating losses, net capital losses, or
excess contribution deductions under 26 U.S.C. ss. 170(d)(2),
172, 1212, and 404 may be subtracted only by the member of the
unitary combined group which generates a carryover.
       2. There shall be subtracted from such taxable income any
amount to the extent included therein the following:
       a. Dividends treated as received from sources without the
United States, as determined under s. 862 of the Internal
Revenue Code.
       b. All amounts included in taxable income under s. 78, s.
951, or s. 951A of the Internal Revenue Code.

However, any amount subtracted under this subparagraph is
allowed only to the extent such amount is not deductible in
determining federal taxable income. As to any amount subtracted
under this subparagraph, there shall be added to such taxable
income all expenses deducted on the taxpayer’s return for the
taxable year which are attributable, directly or indirectly, to
such subtracted amount. Further, no amount shall be subtracted
with respect to dividends paid or deemed paid by a Domestic
International Sales Corporation.
       3. Amounts received by a member of a unitary combined group
as dividends paid by another member of the unitary combined
group must be subtracted from the taxable income to the extent
that the dividends are included in the taxable income.
       4.3. In computing “adjusted federal income” for taxable
years beginning after December 31, 1976, there shall be allowed
as a deduction the amount of wages and salaries paid or incurred
within this state for the taxable year for which no deduction is
allowed pursuant to s. 280C(a) of the Internal Revenue Code
(relating to credit for employment of certain new employees).
       5.4. There shall be subtracted from such taxable income any
amount of nonbusiness income included therein.
       6.5. There shall be subtracted any amount of taxes of
foreign countries allowable as credits for taxable years
beginning on or after September 1, 1985, under s. 901 of the
Internal Revenue Code to any corporation which derived less than
20 percent of its gross income or loss for its taxable year
ended in 1984 from sources within the United States, as
described in s. 861(a)(2)(A) of the Internal Revenue Code, not
including credits allowed under ss. 902 and 960 of the Internal
Revenue Code, withholding taxes on dividends within the meaning
of sub-subparagraph 2.a., and withholding taxes on royalties,
interest, technical service fees, and capital gains.
       7.6. Notwithstanding any other provision of this code,
except with respect to amounts subtracted pursuant to
subparagraphs 1. and 4. 3., any increment of any apportionment
factor which is directly related to an increment of gross
receipts or income which is deducted, subtracted, or otherwise
excluded in determining adjusted federal income shall be
excluded from both the numerator and denominator of such
apportionment factor. Further, all valuations made for
apportionment factor purposes shall be made on a basis
consistent with the taxpayer’s method of accounting for federal
income tax purposes.
       (c) Installment sales occurring after October 19, 1980.—
       1. In the case of any disposition made after October 19,
1980, the income from an installment sale shall be taken into
account for the purposes of this code in the same manner that
such income is taken into account for federal income tax
purposes.
       2. Any taxpayer who regularly sells or otherwise disposes
of personal property on the installment plan and reports the
income therefrom on the installment method for federal income
tax purposes under s. 453(a) of the Internal Revenue Code shall
report such income in the same manner under this code.
       (d) Nonallowable deductions.—A deduction for net operating
losses, net capital losses, or excess contributions deductions
under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
Code which has been allowed in a prior taxable year for Florida
tax purposes shall not be allowed for Florida tax purposes,
notwithstanding the fact that such deduction has not been fully
utilized for federal tax purposes.
       (e) Adjustments related to federal acts.—Taxpayers shall be
required to make the adjustments prescribed in this paragraph
for Florida tax purposes with respect to certain tax benefits
received pursuant to the Economic Stimulus Act of 2008; the
American Recovery and Reinvestment Act of 2009; the Small
Business Jobs Act of 2010; the Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010; the
American Taxpayer Relief Act of 2012; the Tax Increase
Prevention Act of 2014; the Consolidated Appropriations Act,
2016; the Tax Cuts and Jobs Act of 2017; and the Coronavirus
Aid, Relief, and Economic Security Act of 2020.
       1.a. There shall be added to such taxable income an amount
equal to 100 percent of any amount deducted for federal income
tax purposes as bonus depreciation for the taxable year pursuant
to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as
amended by s. 103