Research & Development Tax Credit Bill Passes Senate Commerce and Tourism Committee
On March 4, 2019, the Senate Commerce and Tourism Committee passed SB 750, which permanently increases the cap on Florida’s Research & Development Tax Credit to $35 million.
This Florida Chamber- backed bill, sponsored by Senator Joe Gruters, would allow companies to receive a greater percentage of the R&D credits allowed under law while encouraging high wage jobs, capital investments and innovation in Florida. The Florida Chamber has led the effort to improve Florida’s R&D Tax Credit and provide additional funding over the last five years.
As Florida continues to try to drive innovation and attract high-wage, high-skill jobs, a strategic but underfunded component is the R&D tax credit. The Florida Chamber will continue to promote SB 750 and other efforts that will make Florida a top-three state for research and development and innovation by 2030.
Thank Senator Joe Gruters
Please take a moment to send a quick email thanking Senator Joe Gruters for working to further smarter and more competitive tax policies for Florida.
Florida Chamber Supports Targeted Tax Reforms To Make Florida More Competitive
Florida is moving in the right direction – Florida creates one in every 10 jobs in the Unites States, our unemployment remains low and more than 1.2 million private-sector jobs have been created since December 2010. In order to continue growing jobs, lowering the cost of living and the cost of doing business, the Florida Chamber of Commerce supports targeted tax reforms.
Recently, Florida Governor Rick Scott released his “Fighting for Florida’s Future” budget, which includes several Florida Chamber-backed efforts, like:
- Business Rent Tax reduction for commercial leases,
- Cutting the Corporate Income Tax for 80 percent of Florida’s businesses,
- Sales tax holidays for back-to-school shopping, disaster preparedness and more, and a special sales tax holiday for veterans,
- Fee cuts for seniors, veterans and businesses, and more.
Carolyn Johnson, Director of Business, Economic Development and Innovation Policy for the Florida Chamber of Commerce, testified today in support of the governor’s proposal in the House Ways & Means Committee, adding that it is the Florida Chamber’s hope that the R&D Tax Credit will also be considered for this year’s tax plan.
“We are thrilled that the Governor has made the business rent tax the centerpiece of his tax proposal this year, and are supportive of the broad-based tax cuts that the Governor has recommended. In addition, we ask that the House consider increasing the cap for the R&D Tax Credit, which has been oversubscribed since its inception and encourages R&D in our state,” said CAROLYN JOHNSON, Florida Chamber Director of Business and Economic Development and Innovation Policy.
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Florida Chamber Backed R&D Tax Credit Made Permanent
Late last week, Congress negotiated the annual “tax extenders” package which extends a number of tax credits for businesses and families for the 2015 tax year – including the research and development tax credit. The final bill extended the federal R&D Tax Credit indefinitely, instead of the one year extension that has been passed in years past. This bill was signed by President Obama on Friday.
What This Means:
Florida’s R&D Tax Credit is tied to the federal R&D Tax Credit, meaning in years the federal R&D Tax Credit lapsed, companies in Florida performing qualified R&D would not receive the Florida credit either. Making the federal R&D Tax Credit permanent creates predictability for companies performing research and allows companies to qualify for a single set of standards – both at the federal and state level – to receive tax credits for research and development.
The Florida Chamber of Commerce encouraged reforms to Florida’s R&D Tax Credit earlier this year, and lawmakers passed them during the 2015 Legislative Special Session A. The amount available for tax credits for the 2015 tax year is $23 million, with a weeklong application period opening on March 20, 2016. If the amount in tax credits applied for exceeds the $23 million cap, tax credits will be allocated on a prorated basis. After this year, Florida’s R&D Tax Credit will be capped at $9 million, unless legislative action again increases the cap. The Florida Chamber testified last month before the Florida House Finance & Tax Committee about the need to support future innovation by permanently increasing the R&D Tax Credit cap from $9 million to $23 million.
Florida Chamber Drives Support for Florida R&D Tax Credit
The Florida Chamber of Commerce continues its efforts to attract high-wage jobs and increase global competitiveness by advocating for increases in Florida’ Research and Development (R&D) Tax Credit.
Florida’s innovation economy is growing and the R&D Tax Credit is an important tool to grow Florida’s economy.
In testimony before the House Finance and Tax Committee last week, Florida Chamber Policy Director Carolyn Johnson testified in support of legislation that will increase the credit.
“The cap for the R&D tax credit has been met each year since the credit’s existence, with the last two years being met in less than 10 minutes,” said Carolyn Johnson, Florida Chamber Director of Business, Economic Development and Innovation Policy told members of the committee. “We must continue to encourage research and development in our state, drive innovation, and send a message to companies that they should do their research in Florida.”
Members of the Finance & Tax Committee, including Representative Jay Fant (R-Jacksonville) and Representative Jason Brodeur (R-Sanford) expressed interest in increasing R&D and taking a closer look at the R&D Tax Credit when considering tax cuts. Already, two bills have been filed – increasing the cap from $9 million to $23 million – by Representative Narain (D-Tampa) and Senator Brandes (R-St. Petersburg).
Joining the Florida Chamber of Commerce in support of increasing the amount for the R&D Tax Credit were the Manufacturers Association of Florida and BioFlorida.
During the 2015 Legislative Session, the Florida Chamber was successful in increasing the $9 million cap to $23 million for the 2015 tax year, with applications opening up on March 20, 2016. Additional changes were made to the program that would prorate the credit if the cap is exceeded, allow for a week-long application period, and require companies to certify with the Florida Department of Economic Opportunity that they are in a qualified industry prior to the application date.
Take Action Now
To learn more about the R&D Tax Credit or support our efforts to increase the cap, contact Carolyn Johnson at 850-521-1235 or firstname.lastname@example.org.
Increases Sought to Florida Chamber-Backed Research and Development Tax Credit
TALLAHASSEE (October 15 , 2015) – Florida’s ability to attract high-wage jobs and increase global competitiveness is front and center once again as recently filed bills seek to increase the state’s Research and Development (R&D) Tax Credit, a priority of the Florida Chamber of Commerce.
The bills, filed by Senator Jeff Brandes (R- St Petersburg) and Representative Ed Narain (D- Tampa), would increase the current $9 million R&D Tax Credit cap— which is currently exceeded within 10 minutes of the open online application period— to $23 million.
“Florida’s innovation economy is growing and the R&D Tax Credit is an important tool to enhance our competitiveness,” said David Hart, Executive Vice President of the Florida Chamber. “Increasing the cap on the R&D Tax Credit is imperative if we wish to continue to attract and retain these industries completing research and providing high-wage, high-skill jobs. I applaud the continued efforts of Senator Brandes and Representative Narain to drive innovation in Florida, and thank them for their partnership with the Florida Chamber to increase the R&D Tax Credit.”
Thanks to the efforts of the Florida Chamber, business leaders and legislative leadership, the Florida Legislature increased the R&D Tax Credit cap from $9 million to $23 million for one year in 2015, and modified the program to allow the credits to be pro-rated, instead of being awarded on a mad dash, first-come first-serve basis. The increased demand for this tax credit has resulted in applications being denied, causing our state to lose out on innovative new businesses and high-wage job creators.
At the Florida Chamber, we believe in the Florida dream, and we believe that Florida should be open to business for more job creators than those with the fastest internet connections or the first-through-the-door, one-day-out-of-the-year.
About the R&D Tax Credit:
Florida’s R&D Tax Credit was created in 2011 and is implemented through the Department of Revenue. The R&D Tax Credit is available to companies that have qualified research expenses in Florida and are part of a targeted industry as determined by various factors, including job creation abilities. The tax credit each company may receive is up to 10 percent of the excess qualified research expenses over the company’s “base,” or the average the company has spent on qualified research and development over the prior four years. Additionally, the credit cannot exceed 50 percent of the company’s remaining tax liability.
The Florida Chamber of Commerce is the voice of business and the state’s largest federation of employers, chambers of commerce and associations, aggressively representing small and large businesses from every industry and every region. The Florida Chamber works within all branches of government to affect those changes set forth in the annual Florida Business Agenda, and which are seen as critical to secure Florida’s future. The Florida Chamber works closely with its Political Operations and the Florida Chamber Foundation. Visit www.FloridaChamber.com for more information.