Current through Reg. 51, No. 058, March 25, 2025
(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.
