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.

Share With Your CFO

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 cjohnson@flchamber.com or at 850-521-1235 to get involved in our efforts to ensure Florida’s tax climate remains competitive.

New Report Highlights Federal Tax Reform Impacts on Florida 

The Florida Department of Revenue (DOR) recently released an examination of the federal Tax Cuts and Jobs Act of 2017’s (TCJA) impact in Florida – a nearly year-long review that was directed by the Florida Legislature. 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.

DOR 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.  We will continue to be engaged as the Florida Legislature uses the information from this report to implement federal tax reform changes for state corporate income tax purposes.

Share With Your CFO

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 cjohnson@flchamber.com or at 850-521-1235 to get involved in our efforts to ensure Florida’s tax climate remains competitive.

Florida Department of Revenue Issues Status Report on Federal Tax Reform

Since the end of the 2018 Legislative Session, the Florida Department of Revenue (DOR) has been busy examining the impact of the federal Tax Cuts and Jobs Act of 2017 (TCJA) on Florida. Florida, like many other states, 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.

DOR has hosted two public meetings to hear from businesses and other stakeholders on how components of the TCJA will impact Florida taxes. Additionally, DOR is soliciting public comment by email until December 14, 2018 at CITReview@floridarevenue.com. The department issued its second and final status report before submitting their report to the legislature by February 1, 2019.

DOR has identified 14 topics for further investigation and review, including:

  • Global Intangible Low-Tax Income (GILTI);
  • Bonus Depreciation;
  • Amortization of Research and Experimental Expenditures;
  • Net Interest Deduction;
  • Changes to the Treatment of Capital Contributions; and
  • Like-kind Exchanges.

The Florida Chamber has also 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.

Stay Informed

How Florida adopts the changes under the Tax Cuts and Jobs Act will be a significant discussion during the 2019 Legislative Session. For more information or to provide feedback on how the Tax Cuts and Jobs Act impacts your business, please contact Carolyn Johnson at cjohnson@flchamber.com or 850-521-1235.