Florida Senate - 2011 CS for SB 1470
By the Committee on Commerce and Tourism; and Senator Altman
577-02873-11 20111470c1
1 A bill to be entitled
2 An act relating to the capital investment tax credit;
3 amending s. 212.08, F.S.; specifying procedures to
4 claim a sales and use tax credit; amending s. 220.191,
5 F.S.; authorizing a qualifying business that has
6 insufficient corporate income tax liability to fully
7 claim a capital investment tax credit to apply the
8 credit against its liability for sales and use taxes
9 to be collected, reported, and remitted to the
10 Department of Revenue; requiring a qualifying business
11 that receives a credit against its sales and use tax
12 liability to make additional capital investments;
13 requiring a qualifying business to annually report its
14 capital investments to the Office of Tourism, Trade,
15 and Economic Development, the President of the Senate,
16 and the Speaker of the House of Representatives;
17 requiring a qualifying business that fails to make the
18 required capital investments to repay the amount of
19 the sales and use tax credit claimed with interest;
20 limiting the availability of the sales and use tax
21 credit to certain businesses that have their
22 headquarters in this state, that qualify for the
23 capital investment tax credit under certain
24 circumstances, and that entered into an agreement with
25 the Department of Revenue during a certain period;
26 limiting the annual amount of tax credits that may be
27 approved for each eligible qualifying business;
28 authorizing the Office of Tourism, Trade, and Economic
29 Development and the Department of Revenue to adopt
30 rules; providing an effective date.
31
32 Be It Enacted by the Legislature of the State of Florida:
33
34 Section 1. Paragraph (r) is added to subsection (5) of
35 section 212.08, Florida Statutes, to read:
36 212.08 Sales, rental, use, consumption, distribution, and
37 storage tax; specified exemptions.—The sale at retail, the
38 rental, the use, the consumption, the distribution, and the
39 storage to be used or consumed in this state of the following
40 are hereby specifically exempt from the tax imposed by this
41 chapter.
42 (5) EXEMPTIONS; ACCOUNT OF USE.—
43 (r) Capital investment tax credit; authorization;
44 eligibility for credits.—The credit against the state sales and
45 use tax granted pursuant to s. 220.191(2)(d) shall be deducted
46 from any sales and use tax remitted by the dealer to the
47 department by electronic funds transfer and may be deducted only
48 on a sales and use tax return initiated through electronic data
49 interchange. The dealer shall separately state the credit on the
50 electronic return. The net amount of tax due and payable must be
51 remitted by electronic funds transfer. If the credit is larger
52 than the amount owed on the sales and use tax return, the unused
53 portion may be carried forward to a succeeding reporting period
54 within the 12-month period immediately following the first
55 return approved by the department that the dealer may claim. The
56 credit expires at the end of the 12-month period approved by the
57 department and may not be claimed on a sales and use tax return
58 filed with the department after the end of the 12-month period.
59 Section 2. Section 220.191, Florida Statutes, is amended to
60 read:
61 220.191 Capital investment tax credit.—
62 (1) DEFINITIONS.—As used in For purposes of this section,
63 the term:
64 (a) “Commencement of operations” means the beginning of
65 active operations by a qualifying business of the principal
66 function for which a qualifying project was constructed.
67 (b) “Cumulative capital investment” means the total capital
68 investment in land, buildings, and equipment made in connection
69 with a qualifying project during the period from the beginning
70 of construction of the project to the commencement of
71 operations.
72 (c) “Eligible capital costs” means all expenses incurred by
73 a qualifying business in connection with the acquisition,
74 construction, installation, and equipping of a qualifying
75 project during the period from the beginning of construction of
76 the project to the commencement of operations, including, but
77 not limited to:
78 1. The costs of acquiring, constructing, installing,
79 equipping, and financing a qualifying project, including all
80 obligations incurred for labor and obligations to contractors,
81 subcontractors, builders, and materialmen.
82 2. The costs of acquiring land or rights to land and any
83 cost incidental thereto, including recording fees.
84 3. The costs of architectural and engineering services,
85 including test borings, surveys, estimates, plans and
86 specifications, preliminary investigations, environmental
87 mitigation, and supervision of construction, as well as the
88 performance of all duties required by or consequent to the
89 acquisition, construction, installation, and equipping of a
90 qualifying project.
91 4. The costs associated with the installation of fixtures
92 and equipment; surveys, including archaeological and
93 environmental surveys; site tests and inspections; subsurface
94 site work and excavation; removal of structures, roadways, and
95 other surface obstructions; filling, grading, paving, and
96 provisions for drainage, storm water retention, and installation
97 of utilities, including water, sewer, sewage treatment, gas,
98 electricity, communications, and similar facilities; and offsite
99 construction of utility extensions to the boundaries of the
100 property.
101
102 The term does eligible capital costs shall not include the cost
103 of any property previously owned or leased by the qualifying
104 business.
105 (d) “Income generated by or arising out of the qualifying
106 project” means the qualifying project’s annual taxable income as
107 determined by generally accepted accounting principles and under
108 s. 220.13.
109 (e) “Jobs” means full-time equivalent positions, as that
110 term is consistent with terms used by the Agency for Workforce
111 Innovation and the United States Department of Labor for
112 purposes of unemployment tax administration and employment
113 estimation, resulting directly from a project in this state. The
114 term does not include temporary construction jobs involved in
115 the construction of the project facility.
116 (f) “Office” means the Office of Tourism, Trade, and
117 Economic Development.
118 (g) “Qualifying business” means a business which
119 establishes a qualifying project in this state and which is
120 certified by the office to receive tax credits pursuant to this
121 section.
122 (h) “Qualifying project” means:
123 1. A new or expanding facility in this state which creates
124 at least 100 new jobs in this state and is in one of the high
125 impact sectors identified by Enterprise Florida, Inc., and
126 certified by the office pursuant to s. 288.108(6), including,
127 but not limited to, aviation, aerospace, automotive, and silicon
128 technology industries;
129 2. A new or expanded facility in this state which is
130 engaged in a target industry designated pursuant to the
131 procedure specified in s. 288.106(2)(t) and which is induced by
132 this credit to create or retain at least 1,000 jobs in this
133 state, provided that at least 100 of those jobs are new, pay an
134 annual average wage of at least 130 percent of the average
135 private sector wage in the area as defined in s. 288.106(2), and
136 make a cumulative capital investment of at least $100 million
137 after July 1, 2005. Jobs may be considered retained only if
138 there is significant evidence that the loss of jobs is imminent.
139 Notwithstanding subsection (2), annual credits against the tax
140 imposed by this chapter may shall not exceed 50 percent of the
141 increased annual corporate income tax liability or the premium
142 tax liability generated by or arising out of a project
143 qualifying under this subparagraph. A facility that qualifies
144 under this subparagraph for an annual credit against the tax
145 imposed by this chapter may take the tax credit for a period not
146 to exceed 5 years; or
147 3. A new or expanded headquarters facility in this state
148 which locates in an enterprise zone and brownfield area and is
149 induced by this credit to create at least 1,500 jobs which on
150 average pay at least 200 percent of the statewide average annual
151 private sector wage, as published by the Agency for Workforce
152 Innovation or its successor, and which new or expanded
153 headquarters facility makes a cumulative capital investment in
154 this state of at least $250 million.
155 (2)(a) An annual credit against the tax imposed by this
156 chapter shall be granted to any qualifying business in an amount
157 equal to 5 percent of the eligible capital costs generated by a
158 qualifying project, for a period not to exceed 20 years
159 beginning with the commencement of operations of the project.
160 Unless assigned as described in this subsection, the tax credit
161 shall be granted against only the corporate income tax liability
162 or the premium tax liability generated by or arising out of the
163 qualifying project, and the sum of all tax credits provided
164 pursuant to this section may shall not exceed 100 percent of the
165 eligible capital costs of the project. Except as provided in
166 paragraph (d), a In no event may any credit granted under this
167 section may not be carried forward or backward by any qualifying
168 business with respect to a subsequent or prior year. The annual
169 tax credit granted under this section may shall not exceed the
170 following percentages of the annual corporate income tax
171 liability or the premium tax liability generated by or arising
172 out of a qualifying project:
173 1. One hundred percent for a qualifying project which
174 results in a cumulative capital investment of at least $100
175 million.
176 2. Seventy-five percent for a qualifying project which
177 results in a cumulative capital investment of at least $50
178 million but less than $100 million.
179 3. Fifty percent for a qualifying project which results in
180 a cumulative capital investment of at least $25 million but less
181 than $50 million.
182 (b) A qualifying project that which results in a cumulative
183 capital investment of less than $25 million is not eligible for
184 the capital investment tax credit. An insurance company claiming
185 a credit against premium tax liability under this program is
186 shall not be required to pay any additional retaliatory tax
187 levied pursuant to s. 624.5091 as a result of claiming such
188 credit. Because credits under this section are available to an
189 insurance company, s. 624.5091 does not limit such credit in any
190 manner.
191 (c) A qualifying business that establishes a qualifying
192 project that includes locating a new solar panel manufacturing
193 facility in this state that generates a minimum of 400 jobs
194 within 6 months after commencement of operations with an average
195 salary of at least $50,000 may assign or transfer the annual
196 credit, or any portion thereof, granted under this section to
197 any other business. However, the amount of the tax credit that
198 may be transferred in any year is shall be the lesser of the
199 qualifying business’s state corporate income tax liability for
200 that year, as limited by the percentages applicable under
201 paragraph (a) and as calculated before prior to taking any
202 credit pursuant to this section, or the credit amount granted
203 for that year. A business receiving the transferred or assigned
204 credits may use the credits only in the year received, and the
205 credits may not be carried forward or backward. To perfect the
206 transfer, the transferor must shall provide the department with
207 a written transfer statement notifying the department of the
208 transferor’s intent to transfer the tax credits to the
209 transferee; the date the transfer is effective; the transferee’s
210 name, address, and federal taxpayer identification number; the
211 tax period; and the amount of tax credits to be transferred. The
212 department shall, upon receipt of a transfer statement
213 conforming to the requirements of this paragraph, provide the
214 transferee with a certificate reflecting the tax credit amounts
215 transferred. A copy of the certificate must be attached to each
216 tax return for which the transferee seeks to apply such tax
217 credits.
218 (d) For taxable years beginning on or after January 1,
219 2011, if a credit granted under this subsection is not fully
220 used in a taxable year going forward because of insufficient tax
221 liability on the part of the qualifying business, the qualifying
222 business is entitled to a sales and use tax credit against its
223 state sales and use tax liability in an amount equal to the
224 corporate income or insurance premium tax credit that could not
225 be used in that tax year because of insufficient tax liability
226 arising out of the project. The sales and use tax credit shall
227 be granted against state sales and use taxes collected,
228 reported, and remitted pursuant to chapter 212 during the 12
229 month period beginning on the date that the qualifying business
230 files its corporate income tax return for the year in which the
231 credit granted under this subsection is not fully used.
232 1. The sales and use tax credit granted under this
233 paragraph is subject to the following:
234 a. A qualifying business that applies its sales and use tax
235 credit against its sales and use tax liability must make capital
236 investments in Florida, in addition to its cumulative capital
237 investment, in an amount equal to or greater than the applied
238 credit within 5 years after the date that the qualifying
239 business first applied the sales and use tax credit to its sales
240 and use tax return.
241 b. A qualifying business must annually provide to the
242 office, the President of the Senate, and the Speaker of the
243 House of Representatives a report listing the capital
244 investments made in each tax year of the business in which the
245 business claims a sales and use tax credit pursuant to this
246 paragraph and must provide a final summary report of all capital
247 investments made pursuant to requirements of this paragraph.
248 c. If the qualifying business fails to make the capital
249 investments pursuant to subparagraph (a)1. or if the business
250 fails to report its capital investments pursuant to subparagraph
251 (a)2., the qualifying business shall repay to the department the
252 difference between the sales and use tax credits received and
253 the amount of capital investments accounted for, plus interest
254 as provided for delinquent taxes under chapter 212.
255 d. To be eligible for the sales and use tax credit, a
256 qualifying business must have its headquarters in this state;
257 qualify for the capital investment tax credit pursuant to
258 subparagraph (a)1.; and between January 1, 2006, and December
259 31, 2008, signed an agreement with the department for the
260 determination of income generated by or arising out of the
261 qualifying project.
262 e. The qualifying business must notify the department of
263 its intent to apply the credit against its state sales and use
264 taxes and the amount it is entitled to claim prior to claiming
265 the credit as provided in s. 212.08(5)(r). The department shall
266 send written instructions to the taxpayer on how to claim the
267 credit on a sales and use tax return initiated through an
268 electronic data exchange.
269 2. The maximum amount of tax credits that any one
270 qualifying business may claim as a state sales and use tax
271 credit under this section on sales and use tax returns due
272 during any state fiscal year is $5 million.
273 3. The office and the department may adopt rules to
274 administer this paragraph.
275 (3)(a) Notwithstanding subsection (2), an annual credit
276 against the tax imposed by this chapter shall be granted to a
277 qualifying business which establishes a qualifying project
278 pursuant to subparagraph (1)(h)3., in an amount equal to the
279 lesser of $15 million or 5 percent of the eligible capital costs
280 made in connection with a qualifying project, for a period not
281 to exceed 20 years beginning with the commencement of operations
282 of the project. The tax credit shall be granted against the
283 corporate income tax liability of the qualifying business and as
284 further provided in paragraph (c). The total tax credit provided
285 pursuant to this subsection shall be equal to no more than 100
286 percent of the eligible capital costs of the qualifying project.
287 (b) If the credit granted under this subsection is not
288 fully used in any one year because of insufficient tax liability
289 on the part of the qualifying business, the unused amount may be
290 carried forward for a period not to exceed 20 years after the
291 commencement of operations of the project. The carryover credit
292 may be used in a subsequent year when the tax imposed by this
293 chapter for that year exceeds the credit for which the
294 qualifying business is eligible in that year under this
295 subsection after applying the other credits and unused
296 carryovers in the order provided by s. 220.02(8).
297 (c) The credit granted under this subsection may be used in
298 whole or in part by the qualifying business or any corporation
299 that is either a member of that qualifying business’s affiliated
300 group of corporations, is a related entity taxable as a
301 cooperative under subchapter T of the Internal Revenue Code, or,
302 if the qualifying business is an entity taxable as a cooperative
303 under subchapter T of the Internal Revenue Code, is related to
304 the qualifying business. Any entity related to the qualifying
305 business may continue to file as a member of a Florida-nexus
306 consolidated group pursuant to a prior election made under s.
307 220.131(1), Florida Statutes (1985), even if the parent of the
308 group changes due to a direct or indirect acquisition of the
309 former common parent of the group. Any credit can be used by any
310 of the affiliated companies or related entities referenced in
311 this paragraph to the same extent as it could have been used by
312 the qualifying business. However, any such use shall not operate
313 to increase the amount of the credit or extend the period within
314 which the credit must be used.
315 (4) Before Prior to receiving tax credits pursuant to this
316 section, a qualifying business must achieve and maintain the
317 minimum employment goals beginning with the commencement of
318 operations at a qualifying project and continuing each year
319 thereafter during which tax credits are available pursuant to
320 this section.
321 (5) Applications shall be reviewed and certified pursuant
322 to s. 288.061. The office, upon a recommendation by Enterprise
323 Florida, Inc., shall first certify a business as eligible to
324 receive tax credits pursuant to this section prior to the
325 commencement of operations of a qualifying project, and such
326 certification shall be transmitted to the Department of Revenue.
327 Upon receipt of the certification, the Department of Revenue
328 shall enter into a written agreement with the qualifying
329 business specifying, at a minimum, the method by which income
330 generated by or arising out of the qualifying project will be
331 determined.
332 (6) The office, in consultation with Enterprise Florida,
333 Inc., is authorized to develop the necessary guidelines and
334 application materials for the certification process described in
335 subsection (5).
336 (7) It shall be the responsibility of The qualifying
337 business has the responsibility to affirmatively demonstrate to
338 the satisfaction of the Department of Revenue that such business
339 meets the job creation and capital investment requirements of
340 this section.
341 (8) The Department of Revenue may specify by rule the
342 methods by which a project’s pro forma annual taxable income is
343 determined.
344 Section 3. This act shall take effect July 1, 2011.