Current through Reg. 50, No. 187; September 24, 2024
(1) Definitions. For purposes of this rule,
the following terms mean:
(a) "Credit" means
the credit for qualified railroad reconstruction or replacement expenditures
authorized under Section
220.1915, F.S.
(b) "Qualified expenditures" means gross
expenditures made in Florida by a qualifying railroad during the taxable year
in which the credit is claimed, provided such expenditures were made for track
that was owned or leased by a qualifying railroad on the last day of the prior
calendar year, and were:
1. For the
maintenance, reconstruction, or replacement of railroad infrastructure,
including track, roadbed, bridges, industrial leads and sidings, or
track-related structures which were owned or leased by the qualifying railroad;
or
2. For new construction by the
qualifying railroad of industrial leads, switches, spurs and sidings, and
extensions of existing sidings located in Florida.
(c) "Qualifying railroad" means any Class II
or Class III railroad operating in Florida on the last day of the calendar year
prior to the taxable year for which the credit is claimed, pursuant to the
classifications in effect for that year as set by the United States Surface
Transportation Board or its successor.
(2) Available Credits for Qualifying
Railroads. A credit equal to 50 percent of a qualifying railroad's qualified
expenditures incurred in Florida during a taxable year is available against the
Florida corporate income tax imposed by Chapter 220, F.S. However, the amount
of the credit may not exceed $3,500 multiplied by the number of miles of
railroad track owned or leased in Florida by the qualifying railroad as of the
end of the calendar year prior to the taxable year in which the qualified
expenditures were incurred.
(a) The amount
taken as a credit must be added to taxable income prior to computing the tax
imposed by Ch. 220, F.S.
(b) For
purposes of computing the credit limitation, double track is treated as
multiple lines of railroad track. One mile of single track is equal to one
mile, but one mile of double track is equal to two miles.
(c) The credit is allowed only once for each
mile of railroad track in Florida in each taxable year. No two qualifying
railroads may claim the same mile of railroad track in a taxable
year.
(3) Application
Process. To apply for available program credits, a qualifying railroad must
submit a Florida Credit for Qualified Railroad Reconstruction or Replacement
Expenditures Application for Credit (Form F-11915, incorporated by reference in
Emergency Rule 12CER24-4, F.A.C.) to the Department each taxable year, along
with documentation demonstrating that the qualifying railroad's qualified
expenditures meet the criteria to receive credits. Only one Form F-11915 may be
submitted per qualifying railroad per taxable year.
(a) If federal Form 8900 (Qualified Railroad
Track Maintenance Credit), or its equivalent, is filed with the Internal
Revenue Service within 60 days prior to submitting Form F-11915, the supporting
documentation must include federal Form 8900. Otherwise, a qualifying railroad
must submit federal Form 8900 directly to the Department within 60 days of
submitting the form to the Internal Revenue Service.
(b) The qualifying railroad must submit Form
F-11915 to the Department no later than May 1 of the calendar year following
the year in which the qualified expenditures were made. If the May 1 due date
falls on a Saturday, Sunday, or legal holiday, Form F-11915 will be considered
timely if the form is postmarked or electronically submitted on the next
succeeding day that is not a Saturday, Sunday, or legal holiday. The May 1 due
date may not otherwise be extended.
1.
Example: Qualifying railroad X operates on a calendar year basis. X has
qualified expenditures during calendar year 2024. X must apply for a credit by
submitting Form F-11915 to the Department no later than May 1, 2025.
2. Example: Qualifying railroad Y operates on
a fiscal year basis, with a January 31 year end. Y has qualified expenditures
during the fiscal year beginning February 1, 2024, and ending January 31, 2025.
Y must apply for a credit by submitting Form F-11915 to the Department no later
than May 1, 2026.
(c) If
the qualifying railroad is a disregarded entity for federal tax purposes, Form
F-11915 must be submitted in the name of the owner of the disregarded
entity.
(d) The Department will
issue a letter to the qualifying railroad within 30 days after receipt of the
completed application indicating the amount of the approved credit.
(4) Determination of Carryforward
or Transfer of Unused Credits. When a credit is not fully used during a taxable
year, either because the qualifying railroad that earned the credit has
insufficient tax liability or because the qualifying railroad is not a taxpayer
under Chapter 220, F.S., the credit may be carried forward or may be
transferred in accordance with subsection (5). The carryforward or transferred
credit may be used in the year approved or any of the 5 subsequent taxable
years in which the credit was earned, when the tax imposed by Chapter 220,
F.S., for that taxable year exceeds the credit for which the qualifying
railroad or transferee is eligible in that taxable year, after applying the
other credits and unused carryovers in the order provided by Section
220.02(8), F.S.
(a) Amounts that exceed the limitation of
$3,500 multiplied by the number of miles of railroad track owned or leased in
Florida by the qualifying railroad as of the end of the calendar year prior to
the taxable year in which the qualified expenditures were incurred, as provided
in subsection (2), may not be carried forward to a subsequent taxable year or
transferred.
(b) Example:
Qualifying railroad Corporation A incurs $20,000 of qualified expenditures
during its taxable year. Corporation A owns 2 miles of railroad track within
Florida as of the end of the calendar year prior to the taxable year in which
the qualified expenditures are incurred.
Corporation A's credit is equal to 50 percent of the $20,000
qualified expenditures incurred in the taxable year but may not exceed $3,500
multiplied by the number of miles owned or leased in Florida at the end of the
calendar year prior to the taxable year with the qualified expenditures.
Credit computation: 50% x $20,000 = $10,000 but may not
exceed $7,000 ($3,500 x 2 miles of railroad track). Therefore, Corporation A
receives a $7,000 credit for qualified railroad reconstruction or replacement
expenditures.
The amount of computed credit exceeding the limitation amount
($3,000 = $10,000 - $7,000) cannot be used, carried forward, or
transferred.
(5)
Transfer of credit. Any unused credit may be transferred, in whole or in part.
The transfer of a credit does not affect the time limit for taking the credit,
and the credit is subject to the same limitations imposed on the transferor in
accordance with subsection (4). Transferred credits received by the transferee
may only be used on tax returns with a due date or extended due date on or
after the date of transfer.
(a) Credits may be
transferred to a taxpayer subject to the tax under Chapter 220, F.S., and that
either transports property using the rail facilities of any qualifying
railroad, or furnishes railroad-related property or services, as those terms
are defined in 26 C.F.R. s.
1.45G-1(b) (March 18, 2018),
and herein incorporated by reference (
http://www.flrules.org/Gateway/reference.asp?No=Ref-16071),
to any railroad operating in Florida, or is a railroad. A copy of this
regulation is available from the Department at
https://floridarevenue.com/taxes/taxesfees/Pages/corp_tax_incent.aspx.
(b) The transferor is required to notify the
Department of a credit transfer by submitting a Florida Credit for Qualified
Railroad Reconstruction or Replacement Expenditures Notice of Intent to
Transfer a Credit (Form F-11915T, incorporated by reference in Emergency Rule
12CER24-4, F.A.C.) to the Department within 30 days after the transfer. A
separate notice must be submitted for each taxpayer receiving a transfer of
credit.
(c) The Department will
provide a letter to the transferor and transferee acknowledging the transfer of
credit. The transferee must attach the letter to its Florida Corporate
Income/Franchise Tax Return (Form F-1120) on which the credit is
taken.
(6) Every
taxpayer claiming a credit must retain documentation that substantiates and
supports the credit until tax imposed by Chapter 220, F.S., may no longer be
determined and assessed under Section 95.091(3) or Section
220.23, F.S. Documentation to
substantiate and support the credit includes copies of: the completed credit
application submitted to the Department; documentation related to any federal
credit earned under 26
U.S.C. 45G; documentation related to any
qualified expenditures incurred by the qualifying railroad, and the transfer
letter issued by the Department reflecting the credit amount
transferred.
Rulemaking Authority
213.06(1),
220.1915(7)
FS., s. 61, Ch. 2024-158, LOF. Law Implemented
220.02(8),
220.1915 FS., s. 40, Ch.
2024-158, LOF.
