CS/HB 1069

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

CODING: Words stricken are deletions; words underlined are additions.