Florida Administrative Code › 12 - DEPARTMENT OF REVENUE › 12C - Corporate, Estate and Intangible Tax › Chapter 12C-1 - CORPORATE INCOME TAX › Section 12C-1.011 - Tax Imposed

Current through Reg. 50, No. 138; July 16, 2024
(1) The following
				activities, notwithstanding others within the meaning of taxable privileges
				described in section 220.02, F.S., will be construed
				as conducting business, earning or receiving income in Florida, or constitute
				those activities of a resident or citizen of Florida for purposes of this tax,
				and corporations participating therein are subject to taxation unless exempted
				by the constitution or the laws of the United States or of Florida.
(a) Incorporation in Florida. A Florida
				corporation is required to file a Florida corporate income/franchise tax return
				even though it has no physical existence or activity that takes place in
				Florida and it does business exclusively in other states or
				countries.
(b) Maintaining an
				office or other place of business in Florida. If a salesman holds out his home
				as an office, the corporation will be deemed to maintain an office in Florida
				whether or not the salesman is reimbursed for "office space."
(c)
1.
				Owning or leasing real or tangible personal property in this state.
2. Out-of-state leasing companies will become
				subject to the tax if tangible personal property that is leased to individuals
				or corporations, residing or existing outside the state, is transferred to a
				Florida location. A lessee company that routinely brings property into Florida
				will create a presumption that the leasing company's property was brought into
				Florida. Unless the leasing company can show the property did not enter this
				state the leasing company will be subject to tax. Thus, leasing aircraft to
				commercial airlines that routinely fly aircraft into Florida will subject the
				leasing company to the tax. If the leasing company cannot determine whether the
				specific aircraft leased is flying into Florida, there will be a presumption
				that the aircraft has flown into the state if the airline that leased the
				aircraft routinely flies into Florida. However, if the leasing corporation can
				demonstrate that its aircraft are not flown into the state, the leasing
				companies will not be subject to Florida tax. Similarly, leasing railroad cars
				to shippers who, in turn, engage the services of railroad companies to haul the
				cars, which travel through Florida, will also subject the leasing company to
				tax within this state.
3. If a
				lease is treated as a conditional sales contract for federal tax purposes, the
				lessor shall not become subject to the Florida corporate income/franchise tax
				solely because of this paragraph. The making of a safe harbor election for
				federal tax purposes will not affect the determination for Florida tax purposes
				of whether the substance of the lease is a conditional sales
				contract.
(d) Maintaining
				within Florida a research facility for the exclusive use of a
				company.
(e) Maintaining in Florida
				an inventory or merchandise or material for sale, distribution, or manufacture,
				whether in public, owned, or rented warehouses.
(f) Maintaining in Florida an inventory of
				tangible personal property on consignment to dealers or agents for sale or
				display.
(g) Displaying the
				corporation's merchandise in leased space on a prolonged or recurring
				basis.
(h) Assembling, installing,
				servicing, or repairing the taxpayer's products in Florida by its agents or
				employees.
(i) Accepting orders in
				Florida by its employees.
(j)
				Selling goods through mobile stores (such as trucks with driver
				sales-persons).
(k) Making sales
				that are approved in the state by "independent contractors" who do not hold
				themselves out as engaged in selling, or soliciting orders for the sale of more
				than one principal; or making sales through the use of representatives in this
				state, when activities engaged in exceed those protected by P.L. 86-272
				(15 U.S.C. ss.
				381-384), which is incorporated by
				reference in rule 12C-1.0511, F.A.C.
(l) Having employees that are present in
				Florida and that perform functions other than the solicitation of sales within
				Florida.
(m) Performing any service
				within Florida.
(n) Having
				corporate officers who have permanent or extended temporary residency (3 months
				in the aggregate of a 12 month period) within Florida who make management
				decisions while residing in Florida. If the only officer of the corporation or
				a key officer of the corporation is residing within Florida, management of the
				corporation is presumed to be occurring within Florida.
(o) Selling, managing, or providing
				consulting services in Florida for intangible assets. (Example, investment
				companies, trusts, brokers.) This does not include out-of-state corporations
				whose only activity is to manage out-of-state assets for Florida residents. For
				example, a New York investment company that continues to manage investments for
				a person who is now a Florida resident will not be subject to the tax for this
				limited connection with Florida.
(p)
1.
				Selling or licensing the use of intangible property in Florida for taxable
				years beginning on or after January 1, 1994. For example, licensing the use of
				a trade name or trademark or patent to a business entity located in Florida
				will subject a corporation to the corporate income tax.
2. Corporations that during tax years
				beginning before January 1, 1994, not only licensed the use of a trade name or
				trademark to a business entity located in Florida, but also provided management
				services within Florida (including directing the purchases of supplies, on-site
				inspections, and training seminars within Florida) were subject to the Florida
				corporate income tax for all years these services were
				performed.
(q) Conducting
				seminars in Florida.
(r)
1. Conducting management training courses for
				franchisees or affiliated corporations in Florida.
2. Regularly or systematically visiting
				franchisees or affiliated corporations in Florida in order to advise on
				business matters.
(s)
				Earning or receiving interest by a financial organization, as described in
				section 220.15(6),
				F.S., from loans secured by real or tangible property located in Florida
				irrespective of place of receipt.
(t) Operating professional sports teams which
				engage in professional sports activities in Florida. There are a number of
				factors which are indicative of whether out-of-state corporations which engage
				in professional sports activities in Florida are conducting business or
				deriving income within the meaning and intent of section
				220.11(1), F.S.
1. Prior to the regular playing season the
				team may provide training for its athletes (players) including coaches, staff,
				etc., at facilities located in Florida. In the regular course of training, the
				teams will engage in practice or exhibition games in Florida.
2. During the regular playing season the team
				will play Florida-based teams in Florida.
3. After the close of the regular playing
				season the team may participate in playoff or championship games in
				Florida.
4. The corporation may
				have owned or rented real and tangible property in Florida for the conduct of
				training or other activities.
5.
				The corporation shares in gate receipts from games its teams play in
				Florida.
6. The corporation shares
				in radio and television receipts from local stations and from networks pursuant
				to the league contract, some portion of which is attributable to games played
				in Florida.
(u)
				Transportation companies traveling in Florida. All corporate transportation
				companies are subject to the Florida corporate income tax and are required to
				file Florida corporate income tax returns whenever they have revenue miles in
				Florida, as the term "revenue miles" is defined in section
				220.151, F.S. Transportation
				companies that deliver or pick up goods in Florida, as well as corporations
				that do not have a point of origin or termination within Florida, are subject
				to the Florida Income Tax Code whenever they have revenue miles in
				Florida.
(v) Foreign (out-of-state)
				corporations not otherwise subject to the law but who are partners or members
				of Florida partnerships or joint ventures are subject to the law by virtue of
				their membership in such partnerships or joint ventures. Florida partnerships
				are partnerships doing business, deriving income, or existing in Florida. A
				partnership will be considered to be existing within Florida if an active
				partner who participates in management decisions has permanent or extended
				temporary residency (for 3 months in the aggregate of a 12 month period) within
				Florida. If an active partner is residing within Florida, management of the
				partnership is presumed to be occurring within Florida.
(w) Insurers.
1. The issuing of policies of insurance or
				contracts of annuity under a certificate of authority issued by the Florida
				Office of Insurance Regulation where the policies or contracts are to be
				performed in Florida or where the policies insure or cover persons, property,
				subjects or risks located or resident in Florida.
2. The collecting of premiums on policies of
				insurance or contracts of annuity on such persons, property, subjects, or risks
				as described in subparagraph 1. above, when such policies were initially issued
				by an insurer possessing a certificate of authority issued by the Florida
				Office of Insurance Regulation.
3.
				The issuing of policies of insurance or contracts of annuity or the collecting
				of premiums without possessing a certificate of authority issued by the Florida
				Office of Insurance Regulation, when the issuing or collecting insurer would
				have been required to obtain a certificate of authority to engage in those
				activities.
4. The entering into
				contracts of reinsurance when such contracts of reinsurance are placed with an
				approved reinsurer by a ceding insurer domiciled or commercially domiciled in
				Florida as defined in chapter 624, F.S., or by either an artificial entity
				domiciled or resident in Florida or a political subdivision of Florida where
				either the artificial entity or the political subdivision is engaged in self
				insurance.
5. Surplus lines
				insurers with an office or employees located in
				Florida.