Legislature Begins Examining Federal Tax Reform Impacts on Florida
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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Florida Department of Revenue Seeks Comments on Federal Tax Cuts and Jobs Act Impact
The Florida Department of Revenue (DOR) is asking business leaders for their thoughts and comments regarding the federal Tax Cuts and Jobs Act and its effect on the state corporate income tax.
The Florida Legislature and the Department of Revenue are relying heavily on public comment to identify areas where the state tax base may be expanded and how the Tax Cats and Jobs Act might increase state taxes on businesses. Changes to how Florida adopts the Internal Revenue Code for state tax purposes are expected to be adopted in the 2019 Legislative Session.
Comments may be submitted by email to: CITReview@floridarevenue.com or by regular mail to: Corporate Income Tax Review, c/o Director of Legislative and Cabinet Services, Department of Revenue, P.O. Box 5906, Tallahassee, Florida 32314-5906. These comments will be posted to DOR’s website.
In addition, DOR will be holding two public workshops to receive public comments on the Tax Cuts and Jobs Act, the first of which will be held August 22, 2018 at 9 AM EST in Tallahassee. Those unable to attend in person can register by webinar here.
For more information, please visit the DOR website.