Florida Administrative Code
12 - DEPARTMENT OF REVENUE
12C - Corporate, Estate and Intangible Tax
Chapter 12C-1 - CORPORATE INCOME TAX
Section 12C-1.0191 - Capital Investment Tax Credit Program

Universal Citation: FL Admin Code R 12C-1.0191

Current through Reg. 50, No. 187; September 24, 2024

(1) Qualifying projects defined in Sections 220.191 (1)(g)1. and 2., F.S.

(a) Section 220.191, F.S., requires an application process for the capital investment tax credit, which includes review and recommendation by Enterprise Florida, and a certification from the Department of Economic Opportunity, Division of Strategic Business Development. Once the applicant has been recommended by Enterprise Florida and certified by the Department of Economic Opportunity, the applicant is required to reach a written agreement with the Florida Department of Revenue on how the taxable income from the qualifying project is to be determined or calculated. The Department adopts a Technical Assistance Advisement, which the applicant requests from the Department, as the method for entering into such written agreement. When requesting the Technical Assistance Advisement, the applicant is required to follow the guidelines provided in Rule 12-11.003, F.A.C., and in addition, to include how the applicant proposes to determine the taxable income generated by or arising out of the qualifying project.
1. In situations where the applicant is using a separate corporate entity to account for the activities of the qualifying project, the taxable income generated by that entity as reported on the return filed pursuant to Section 220.22(1), F.S., will be used to determine the amount of income tax due and the subsequent amount of the credit that will be available for use. If the applicant has other activities not related to the project reported on this return, a pro forma attachment will be required to separately account for the taxable income generated by the project, the resulting amount of tax due, and the subsequent amount of the credit that will be available for use.

2. Where the activities of the qualifying project are included within preexisting multiple corporate structures, such as several affiliates or divisions, or the activities of the project are included within a corporation or corporations that are included in a consolidated income tax return filed pursuant to Section 220.131, F.S., the applicant will be required to separately account for, using a "pro forma" format, the qualifying project's taxable income, the amount of income tax due, and subsequent credit. This pro-forma attachment will indicate separately all revenues, expenses, either direct or indirect, and any other adjustments made in the determination of the project's annual taxable income, and the subsequent annual amount of the Capital Investment Tax Credit that may be claimed on the Florida corporate income tax return. This computation requires the qualifying project's annual taxable income to be determined by generally accepted accounting principles (GAAP) and to conform to the provisions contained in Florida Corporate Income Tax Law under Chapter 220, F.S.

3. In situations where the activities of the project are included within other types of corporate structures, the applicant will be required to separately account for, using a "pro forma" format, the qualifying project's taxable income, the amount of income tax due, and subsequent credit. This pro-forma attachment will indicate separately all revenues, expenses, either direct or indirect, and any other adjustments made in the determination of the project's annual taxable income, and the subsequent annual amount of the Capital Investment Tax Credit that may be claimed on the Florida corporate income tax return. This computation requires the qualifying project's annual taxable income to be determined by generally accepted accounting principles (GAAP) and to conform to the provisions contained in Florida Corporate Income Tax Law under Chapter 220, F.S.

(b)
1. The maximum annual amount of Capital Investment Tax Credit is limited to 5 percent of the certified eligible capital costs of the qualifying project, for a period not to exceed 20 years, beginning with the commencement of the project's operations. The tax credit may not be carried forward or backward, except as noted in subparagraph 2. The sum of all capital investment tax credits cannot exceed 100 percent of the eligible capital costs of the project.

2. A carryover of credit is available for a qualifying business that invested at least $100 million and is eligible to claim the credit against 100 percent of its corporate income tax liability pursuant to Section 220.191 (2)(a)1., F.S. Unused credits from the 20-year credit period may be claimed in the 21st through 30th tax years after commencement of operations of such qualifying project.

3. The amount of carryover from any one taxable year is five (5) percent of the cumulative capital investment that is at least $100 million less the amount of capital investment tax credit that could be used on the tax return for the taxable year. The amount of carryover from a taxable year may not exceed five (5) percent of the cumulative capital investment that is at least $100 million.

4. Example: Taxpayer A is entitled to a capital investment credit in 2018 because it made a cumulative capital investment of $100 million; the 2018 corporate income tax due on the income generated by or arising out of its capital investment is $4 million; and the tax liability on its corporate income tax return was $4.5 million. From the 2018 taxable year, Taxpayer A generated a capital investment carryover of $1 million ($5 million less the lesser of $4.5 million or $4 million).

5. Example: Taxpayer B is entitled to a capital investment credit in 2020 because it made a cumulative capital investment of $100 million; the 2020 corporate income tax due on the income generated by or arising out of its capital investment is $3.5 million; and the corporate income tax liability on its tax return was $3 million. From the 2020 taxable year, Taxpayer B generated a capital investment carryover of $2 million ($5 million less the lesser of $3 million or $3.5 million).

(2) Qualifying projects defined in Section 220.191 (1)(g)3., F.S.

(a) Section 220.191, F.S., requires an application process for the capital investment tax credit, which includes review and recommendation by Enterprise Florida and a certification from the Department of Economic Opportunity, Division of Strategic Business Development. The maximum annual amount of Capital Investment Tax Credit is limited to the lesser of $15 million or 5 percent of the certified eligible capital costs of the qualifying project, for a period not to exceed 20 years, beginning with the commencement of the project's operations. If the tax credit is not fully used in any one year, the unused amount may be carried forward for a period not to exceed 20 years after the commencement of operations of the project. The tax credit may be used in whole or in part by the qualifying business or by any corporation that is a member of that qualifying business's affiliated group of corporations, is a related entity taxable as a cooperative under subchapter T of the Internal Revenue Code, or, if the qualifying business is an entity taxable as a cooperative under subchapter T of the Internal Revenue Code, is related to the qualifying business. The sum of all capital investment tax credits cannot exceed 100 percent of the eligible capital costs of the project.

(b) When the capital investment tax credit is used in whole or in part by a member of the qualifying business's affiliated group or by a related entity that is taxable as a cooperative under subchapter T of the Internal Revenue Code, the qualifying business and the entities claiming the qualifying business's tax credit must attach a schedule reconciling the amount of capital investment tax credit claimed by each entity. The name, federal identification number, and amount of capital investment tax credit claimed by each entity must be included in the schedule.

(3) A copy of the Department of Economic Opportunity certification, Enterprise Florida documents, and, as appropriate, any "pro forma" attachment required by the written agreement to provide the calculations used in the determination of the annual taxable income generated by or arising out of the qualifying project, is required to be included with the Florida Corporate Income Tax Return (Form F-1120) when filing for and claiming the Capital Investment Tax Credit.

(4) A taxpayer that claims the capital investment tax credit against the insurance premium tax may not claim credit for the same qualifying project against the corporate income tax. For qualifying projects defined in Section 220.191(1)(g)3., F.S., the capital investment tax credit may only be applied against corporate income tax.

(5) A qualifying business that establishes a qualifying project that includes locating a new solar panel manufacturing facility in Florida that generates a minimum of 400 jobs within six months after commencement of operations with an average salary of at least $50, 000, may assign or transfer its capital investment tax credit, or any portion thereof, to any other business. The amount of credit that may be transferred in any year is the lesser of (1) the qualifying business's Florida corporate income tax liability for the tax year, or (2) the credit amount granted for the tax year. A business receiving the transferred credit may use the credit only in the year received, and the credit may not be used in any other tax year. Taxpayers are required to file a Transfer a Florida Tax Credit - Corporate Income Tax (Form F-1193T, incorporated by reference in Rule 12C-1.051, F.A.C.) to transfer a capital investment tax credit for which a transfer is provided. The transfer must be verified by the Department prior to the transferee claiming the credit. Within 15 days of receipt of a completed Form F-1193T, the Department will notify the transferor and the transferee of the amount of tax credit authorized for transfer. A copy of the letter from the Department allowing the transfer must be attached by the transferee to the Florida Corporate Income/Franchise Tax Return (Form F-1120, incorporated by reference in Rule 12C-1.051, F.A.C.) on which the credit is claimed.

(6) Taxpayers making application for the Capital Investment Tax Credit or transferring a capital investment tax credit should refer to Section 220.191, F.S., for the definition of terms, statutory requirements, and other pertinent guidelines.

Rulemaking Authority 213.06(1), 220.191(8), 220.51 FS. Law Implemented 220.191 FS.

New 8-4-05, Amended 4-5-07, 4-26-10, 1-17-13, 1-8-19.

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