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