Title: Corporate Income Tax

Summary: Adopting the Internal Revenue Code in effect on January 1, 2019; providing for refunds of certain corporate income tax receipts in a certain fiscal year; providing for the subtraction of global intangible low-taxed income from taxable income for the purpose of determining adjusted federal income; requiring taxpayers filing returns during a certain timeframe to submit specified information to the Department of Revenue by certain means, etc.

Full Text:
An act relating to the corporate income tax; amending s. 220.03, F.S.; adopting the Internal Revenue Code in effect on January 1, 2019; providing applicability; amending s. 220.1105, F.S.; revising definitions; deleting provisions providing for a rate adjustment; providing for refunds of certain corporate income tax receipts in a certain fiscal year; revising requirements for the Department of Revenue in making certain determinations and in refunding eligible taxpayers; amending s. 220.13, F.S.; providing for the subtraction of global intangible low-taxed income from taxable income for the purpose of determining adjusted federal income; specifying the extent to which certain amounts may be subtracted; providing applicability; creating s. 220.27, F.S.; requiring taxpayers filing returns during a certain timeframe to submit specified information to the department by certain means; defining the term  NAICS ; requiring the department, by a certain date, to create a secure online application for submitting such information; requiring certain persons to certify the information is true and correct; specifying deadlines for submitting the information; authorizing the department to perform certain audits and investigations; providing a penalty for failure to provide the information; requiring the penalty to be deposited into the General Revenue Fund; authorizing the department to settle or compromise the penalty under certain circumstances; providing for expiration; authorizing the department to adopt emergency rules; providing for expiration of the authorization; providing an appropriation; providing an effective date. Be It Enacted by the Legislature of the State of Florida: Section 1. Paragraph (n) of subsection (1) and paragraph (c) of subsection (2) of section 220.03, Florida Statutes, are amended 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: (n) Internal Revenue Code  means the United States Internal Revenue Code of 1986, as amended and in effect on January 1, 2019 2018,except as provided in subsection (3). (2) DEFINITIONAL RULES. When used in this code and neither otherwise distinctly expressed nor manifestly incompatible with the intent thereof: (c) Any term used in this code has the same meaning as when used in a comparable context in the Internal Revenue Code and other statutes of the United States relating to federal income taxes, as such code and statutes are in effect on January 1, 2019 2018.However, if subsection (3) is implemented, the meaning of a term shall be taken at the time the term is applied under this code. Section 2.  The amendment made by this act to s. 220.03, Florida Statutes, applies to taxable years beginning on or after January 1, 2019. Section 3. Section 220.1105, Florida Statutes, is amended to read: 220.1105  Tax imposed; Automatic refunds and downward adjustments to tax rates.  (1) As used in this section, the term: (a) Net collections  means the total amount of taxes collected under this chapter by the department in a the 2018 2019 fiscal year, including related interest and penalties, minus the total amount of refunds of taxes levied under this chapter and issued by the department in that fiscal year,not including refunds issued pursuant to paragraph (2)(c).No later than September 1, 2019, and September 1, 2020, the Office of Economic and Demographic Research shall determine net collections for the most recent 2018-2019 fiscal year. (b) Forecasted net collections  means the amount of net collections forecasted for a the 2018-2019 fiscal year by the Revenue Estimating Conference on February 23, 2018. (c) Adjusted forecasted collections  means forecasted net collections for a the 2018-2019 fiscal year multiplied by 1.07. (d) Tax rate imposed  is the tax rate as defined in ss. 220.11(2) and 220.63(2) adjusted as set forth in this section. (2) The tax rate imposed shall be adjusted based on net collections in the 2018-2019 fiscal year. If the net collections exceed the adjusted forecasted collections, the tax rate imposed for taxable years beginning on or after January 1, 2019, shall be the tax rate imposed for taxable years beginning on or after January 1, 2018, multiplied by the quotient of the adjusted forecasted collections divided by the net collections. The resulting tax rate shall be rounded to the nearest thousandth and rounded down if the fourth digit to the right of the decimal point is the number five. (3) By October 1, 2019, the Department of Revenue shall calculate the tax rate imposed, if it is to be adjusted pursuant to subsection (2), and shall on that same date report the results of such calculation to the Governor, the President of the Senate, and the Speaker of the House of Representatives. (2) (4)   For the 2018-2019 and 2019-2020 fiscal years, any amount by which net collections for the fiscal year exceed adjusted forecasted collections for the same 2018-2019 fiscal year shall only be used to provide refunds to corporate income tax payers as follows: (a) For purposes of this subsection: 1. Eligible taxpayer for a fiscal year   means:a.   For the 2018-2019 fiscal year, a taxpayer whose taxable year begins between April 1, 2017, and March 31, 2018, and whose final tax liability for such taxable year is greater than zero. b.   For the 2019-2020 fiscal year, a taxpayer whose taxable year begins between April 1, 2018, and March 31, 2019, and whose final tax liability for such taxable year is greater than zero.2. Excess collections for a fiscal year   means the amount by which net collections for a fiscal the 2018-2019 year exceed adjusted forecasted collections for that fiscal year. 3. Final tax liability  means the taxpayer s amount of tax due under this chapter for a taxable year, reported on a return filed with the department pursuant to s. 220.222, including a return filed timely pursuant to a valid extension. 4. Total eligible tax liability for a fiscal year   means the sum of final tax liabilities of all eligible taxpayers for a fiscal year, as such liabilities are shown on the latest return filed with the department as of the February immediately following that fiscal year.5. Taxpayer refund share for a fiscal year   means an eligible taxpayer s final tax liability as a percentage of the total eligible tax liability for that fiscal year.6. Taxpayer refund for a fiscal year   means the taxpayer refund share for a fiscal year multiplied by the excess collections for that fiscal year.(b) No later than April following a fiscal year February 15, 2020,the department shall determine total eligible tax liability for that fiscal year,the taxpayer refund share for that fiscal year for each eligible taxpayer, and the taxpayer refund for that fiscal year for each eligible taxpayer. (c) No later than May following a fiscal year March 1, 2020,the department shall refund a taxpayer refund for that fiscal year to each eligible taxpayer. (5) Tax rate adjustments pursuant to this section are repealed for taxable years beginning on or after January 1, 2020. Section 4. Paragraph (b) of subsection (1) of section 220.13, Florida Statutes, is 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 more than one taxpayer as provided in s. 220.131, for the taxable year, adjusted as follows: (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. 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. 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. and 1212, respectively, of the Internal Revenue Code. 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. of the Internal Revenue Code. b. All amounts included in taxable income under s.,or s.,or s. 951A of the Internal Revenue Code. However, any amount subtracted under this subparagraph shall only be allowed to the extent that 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. 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). 4. There shall be subtracted from such taxable income any amount of nonbusiness income included therein. 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. of the Internal Revenue Code to any corporation which derived less than 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. and 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. 6. Notwithstanding any other provision of this code, except with respect to amounts subtracted pursuant to subparagraphs 1. and 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. Section 5.  The amendment made by this act to s. 220.13, Florida Statutes, applies to taxable years beginning on or after January 1, 2018. Section 6. Section 220.27, Florida Statutes, is created to read: 220.27  Additional required information.  (1)(a)   Every taxpayer that is required to file a return under s. 220.22(1) for a taxable year beginning during the 2018 or 2019 calendar years must submit to the department the following information for those taxable years using the online application on the department s website: 1.   The taxpayer s name, federal taxpayer identification number, taxable year beginning date, taxable year ending date, and whether a consolidated return for the taxpayer is required or elected under s. 220.131. 2.   The taxpayer s NAICS code for business activity that generates the greatest proportion of gross receipts of the taxpayer. As used in this sub paragraph, the term  NAICS  means those classifications contained in the North American Industry Classification System, as published in 2007 by the Office of Management and Budget, Executive Office of the President. 3.   The taxpayer s taxable income,as that term is defined in s. 220.13(2),and the taxpayer s state apportionment fraction pursuant to s. 220.15 for the taxable year. 4.   The amount of global intangible low-taxed income included in federal taxable income under s. 951A of the Internal Revenue Code, and the amount of the related deduction under s. 50 of the Internal Revenue Code as it pertains to s. 951A of the Internal Revenue Code. 5.   The amount of foreign-derived intangible income computed for the federal return for the taxable year and the amount of the related deduction under s. of the Internal Revenue Code, as it pertains to foreign-derived intangible income. 6.   The amount of business interest expense deducted on the federal return under s. of the Internal Revenue Code, including any carryover; the amount of current year business interest expense, including any carryover, which was not deducted due to the limitation in s. 163(j) of the Internal Revenue Code; and the amount of business interest expense carried over from previous taxable years. 7.   The amount of federal net operating loss deduction under s. of the Internal Reven ue Code applied in determining federal taxable income and the amount of federal net operating loss carryover that was not applied due to the limitation in s. 172(a)(2) of the Internal Revenue Code. 8.   The total amount of state net operating loss carryover available after the filing of the return for the taxable year. 9.   The total amount of the state alternative minimum tax credit carryover available after the filing of the return for the taxable year. (b)   By September 3, 2019, the department shall create a secure online application for use by taxpayers when submitting the information required under this subsection through the department s website. (c)   An officer of the taxpayer or a person duly authorized to act on the taxpayer s behalf shall certify that the information submitted pursuant to this subsection is true and correct. The required information must be submitted the earlier of days aft er the extended due date of the tax return or days after the date such return is filed. For taxpayers that file returns before September 3, 2019, for taxable years beginning in calendar year 2018, the required information is timely if submitted by September 3, 2019. (d)   In addition to its existing audit and investigation authority, the department may perform any additional financial and technical audits and investigations, including examining the accounts, books, and financial records of the taxpayer, which are necessary to verify the accuracy of the information submitted pursuant to this subsection. (e)   A taxpayer who fails to provide the required information by the required submission date is subject to a penalty of $1,000 or percent of the tax determined to be due under this chapter for the most recent taxable year reported on a return filed with the department, whichever is greater. Any such penalty collected must be deposited into the General Revenue Fund. The department may settle or compromise such penalty if the department determines that the noncompliance is due to reasonable cause and not to willful negligence, willful neglect, or fraud. (2)   This section expires January 1, 2023. Section 7.  (1)   The Department of Revenue is authorized, and all conditions are deemed to be met, to adopt emergency rules pursuant to s. 120.54(4), Florida Statutes, for the purpose of implementing this act. (2)   Notwithstanding any other law, emergency rules adopted pursuant to subsection (1) are effective for months after adoption and may be renewed during the pendency of procedures to adopt permanent rules addressing the subject of the emergency rules. (3)   This section expires January 1, 2022. Section 8.  For the 2019-2020 fiscal year, the sum of $120,000 in nonrecurring funds is appropriated from the General Revenue Fund to the Department of Revenue for the purpose of implementing this act. Section 9. This act shall take effect upon becoming a law.