The House Ways and Means Committee has begun its initial work of examining the impact of the federal Tax Cuts and Jobs Act (TCJA) for Florida corporate income tax purposes. Today, the committee heard a presentation from committee staff and the Florida Department of Revenue (DOR) on how the changes to the Internal Revenue Code are impacting corporations in Florida and have expanded the tax base. Like many other states, Florida uses federal taxable income as a starting point to determine Florida income for the purposes of corporate income tax. Because of the many changes contained within the TCJA, it is estimated that a full adoption, or “piggyback” of these changes, would increase Florida’s tax base by 13 percent.
This follows a nearly year-long review by DOR at the direction of the Legislature. DOR recently released an examination of the TCJA and identified 14 topics that will have a significant impact on Florida’s corporate income tax. These topics are the same that have been identified in previous status reports and have been brought to DOR through public testimony, including:
- Like-kind exchanges,
- Global Intangible Low-Tax Income (GILTI), and
- Net interest deductions.
The final report includes a full analysis of each topic, including an analysis on the impact to state revenue. The Florida Chamber offered comment in a written letter to the Department of Revenue encouraging Florida to decouple from the GILTI and net interest deduction changes in the TCJA. The Florida Chamber will continue to be engaged as this is the initial step as the Florida Legislature uses the information from this report and today’s workshop to implement federal tax reform changes for state corporate income tax purposes.
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Share this important message with your company’s CFO to help ensure they have the latest information on this important issue. For more details, contact Carolyn Johnson at email@example.com or at 850-521-1235 to get involved in our efforts to ensure Florida’s tax climate remains competitive.