SB 7058 & HB 7095 – Relating to Internal Revenue Code
On Tuesday, February 18, SB 7058, sponsored and heard by the Senate Finance and Tax Committee, was reported favorable with 8 yeas and 0 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation.
On Wednesday, February 19, PCB WMC 20-02 (now HB 7095), sponsored and heard by the House Ways & Means Committee, was reported favorable with 15 yeas and 0 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation.
Florida imposes a 5.5% tax on the taxable income of corporations and financial institutions doing business in Florida. The determination of taxable income for Florida tax purposes begins with the taxable income used for federal income tax purposes. Additional adjustments are then made to determine Florida’s taxable income. By starting with federal taxable income, Florida eases the administrative burden on Florida taxpayers because they receive the same treatment in Florida as is allowed in determining their federal taxable income. Florida maintains this relationship with the federal Internal Revenue Code (IRC) each year by adopting the IRC as it exists on January 1 of the year. By doing this, Florida adopts any changes that were made in the previous year to the determination of federal taxable income.
The bill updates Florida’s corporate Income Tax Code by adopting the federal Internal Revenue Code in effect on January 1, 2020.
SB 7058 will now move to the Senate Appropriations Committee.
HB 7095 will now move to the House floor.
AIF supports a reduced corporate income tax on businesses to encourage corporate growth and the expansion of employment opportunities in Florida.
HB 7097 – Relating to Taxation
On Wednesday, February 19, PCB WMC 20-01 (now HB 7097), sponsored and heard by the House Ways & Means Committee, was reported favorable with 12 yeas and 4 nays. AIF’s Senior Vice President of State and Federal Affairs, Brewster Bevis, stood in support of this legislation and stood in opposition to Amendment 60000.
The bill provides for several tax reductions and other tax-related modifications designed to directly impact both families and businesses. Specifically, the bill provides for a 0.5 percentage point reduction in the state communications services tax. Several provisions related to sales tax are included:
- A reduction in the tax rate for commercial property rentals from 5.5% to 5.4%;
- A three-day “back-to-school” tax holiday for certain clothing, school supplies, and personal computers; and a seven-day “disaster preparedness” tax holiday in May and June of 2020 for specified disaster preparedness items;
- A requirement that School Capital Outlay sales surtaxes approved in the future be proportionately shared with charter schools;
- A change in distributions made under the Tax Collection Enforcement Diversion Program; and
- Future sunset of the Charter County and Regional Transportation System Sales Surtax currently levied in Miami-Dade County, and a requirement that any future levy of the tax in any eligible county be limited to 20 years in duration.
The bill also provides for a one-time increase of $8.2 million available for the brownfields tax credit program and includes a provision that amends the calculation of a taxpayer’s “final tax liability” for purposes of calculating certain corporate income tax refunds.
AIF supports legislative actions that reduce taxes on businesses which allows further growth and employment opportunities.