Florida Senate - 2012                                    SB 1590
       
       
       
       By Senator Rich
       
       
       
       
       34-00945-12                                           20121590__
    1                        A bill to be entitled                      
    2         An act relating to the corporate income tax; providing
    3         legislative findings and intent; amending s. 220.03,
    4         F.S.; revising a definition; defining the terms “tax
    5         haven” and “water’s edge group”; amending s. 220.13,
    6         F.S.; conforming cross-references; redefining the term
    7         “adjusted federal income” to limit the subtraction of
    8         certain deductions and certain carryovers; requiring
    9         the subtraction of certain dividends from taxable
   10         income; creating s. 220.136, F.S.; providing rules and
   11         criteria to determine if a corporation is a member of
   12         a water’s edge group; creating s. 220.1363, F.S.;
   13         providing a reporting method for a water’s edge group;
   14         providing for the apportionment of income to the
   15         state; requiring a member of a water’s edge group
   16         having nexus with this state to file a single return
   17         for the water’s edge group; providing for the
   18         determination of income for a member of a water’s edge
   19         group having a different tax year than the water’s
   20         edge group; requiring a water’s edge group return to
   21         include a computational schedule; requiring a water’s
   22         edge group to file a domestic disclosure spreadsheet
   23         along with its return; authorizing the Department of
   24         Revenue to adopt rules; amending s. 220.14, F.S.;
   25         providing for the proration of an exemption during a
   26         leap year; limiting a water’s edge group to a single
   27         claim of a specified exemption; amending s. 220.15,
   28         F.S.; revising criteria applicable to determining
   29         whether a sale of tangible personal property occurs in
   30         this state; deleting provisions relating to affiliated
   31         groups with respect to certain sales of a financial
   32         institution; amending s. 220.183, F.S.; deleting
   33         provisions relating to affiliated groups with respect
   34         to community contribution tax credits; amending s.
   35         220.1845, F.S.; deleting provisions relating to
   36         affiliated groups with respect to the contaminated
   37         site rehabilitation tax credit; amending s. 220.1875,
   38         F.S.; deleting provisions relating to affiliated
   39         groups with respect to tax credits for contributions
   40         to eligible nonprofit scholarship-funding
   41         organizations; amending s. 220.191, F.S.; deleting
   42         provisions relating to affiliated groups with respect
   43         to the capital investment tax credit; amending s.
   44         220.192, F.S.; deleting provisions relating to
   45         affiliated groups with respect to the renewable energy
   46         technologies investment tax credit; amending s.
   47         220.193, F.S.; deleting provisions relating to
   48         affiliated groups with respect to the Florida
   49         renewable energy production tax credit; amending s.
   50         220.51, F.S.; deleting provisions relating to the
   51         rulemaking authority of the Department of Revenue with
   52         respect to consolidated reporting for affiliated
   53         groups; amending s. 220.64, F.S.; conforming cross
   54         references; deleting provisions relating to the filing
   55         of consolidated returns by affiliated groups of
   56         corporations composed of banks or savings
   57         associations, their parent corporations, and certain
   58         subsidiaries of the parent corporation; amending s.
   59         288.1254, F.S.; deleting provisions relating to
   60         affiliated groups with respect to tax credits awarded
   61         under the entertainment industry financial incentive
   62         program; amending s. 376.30781, F.S.; conforming
   63         cross-references; amending s. 627.6699, F.S.;
   64         conforming a provision to changes made by the act;
   65         providing transitional rules for corporate income tax
   66         returns filed by water’s edge groups and affiliated
   67         groups of corporations; specifying the allocation of
   68         funds that are recaptured under the act; repealing s.
   69         220.131, F.S., relating to adjusted federal income for
   70         affiliated groups; providing an effective date.
   71  
   72  Be It Enacted by the Legislature of the State of Florida:
   73  
   74         Section 1. Legislative findings and intent.—The Legislature
   75  finds that the separate accounting system used to measure the
   76  income of multistate and multinational corporations for tax
   77  purposes often places Florida corporations at a competitive
   78  disadvantage. Moreover, corporate business is increasingly
   79  conducted through groups of commonly owned corporations.
   80  Therefore, the Legislature intends to more accurately measure
   81  the business activities of corporations by adopting a combined
   82  system of income tax reporting.
   83         Section 2. Paragraph (z) of subsection (1) of section
   84  220.03, Florida Statutes, is amended, and paragraphs (gg) and
   85  (hh) are added to that subsection, to read:
   86         220.03 Definitions.—
   87         (1) SPECIFIC TERMS.—When used in this code, and when not
   88  otherwise distinctly expressed or manifestly incompatible with
   89  the intent thereof, the following terms shall have the following
   90  meanings:
   91         (z) “Taxpayer” means any corporation subject to the tax
   92  imposed by this code, and includes all corporations that are
   93  members of a water’s edge group for which a consolidated return
   94  is filed under s. 220.131. However, “taxpayer” does not include
   95  a corporation having no individuals (including individuals
   96  employed by an affiliate) receiving compensation in this state
   97  as defined in s. 220.15 when the only property owned or leased
   98  by said corporation (including an affiliate) in this state is
   99  located at the premises of a printer with which it has
  100  contracted for printing, if such property consists of the final
  101  printed product, property which becomes a part of the final
  102  printed product, or property from which the printed product is
  103  produced.
  104         (gg) “Tax haven” means a jurisdiction that, for a
  105  particular tax year:
  106         1. Is identified by the Organization for Economic Co
  107  operation and Development as a tax haven or as having a harmful
  108  preferential tax regime; or
  109         2.a. Is a jurisdiction that does not impose or imposes only
  110  a nominal, effective tax on relevant income;
  111         b. Has laws or practices that prevent the effective
  112  exchange of information for tax purposes with other governments
  113  regarding taxpayers who are subject to, or benefiting from, the
  114  tax regime;
  115         c. Lacks transparency;
  116         d. Facilitates the establishment of foreign-owned entities
  117  without the need for a local substantive presence or prohibits
  118  these entities from having any commercial impact on the local
  119  economy;
  120         e. Explicitly or implicitly excludes the jurisdiction’s
  121  resident taxpayers from taking advantage of the tax regime’s
  122  benefits or prohibits enterprises that benefit from the regime
  123  from operating in the jurisdiction’s domestic market; or
  124         f. Has created a tax regime that is favorable for tax
  125  avoidance, based upon an overall assessment of relevant factors,
  126  including whether the jurisdiction has a significant untaxed
  127  offshore financial or other services sector relative to its
  128  overall economy.
  129  
  130  For purposes of this paragraph, a tax regime lacks transparency
  131  if the details of legislative, legal, or administrative
  132  requirements are not open to public scrutiny and apparent, or
  133  are not consistently applied among similarly situated taxpayers.
  134  As used in this paragraph, the term “tax regime” means a set or
  135  system of rules, laws, regulations, or practices by which taxes
  136  are imposed on any person, corporation, or entity, or on any
  137  income, property, incident, indicia, or activity pursuant to
  138  government authority.
  139         (hh) “Water’s edge group” means a group of corporations
  140  related through common ownership whose business activities are
  141  integrated with, dependent upon, or contribute to a flow of
  142  value among members of the group.
  143         Section 3. Subsection (1) and paragraph (f) of subsection
  144  (2) of section 220.13, Florida Statutes, are amended to read:
  145         220.13 “Adjusted federal income” defined.—
  146         (1) The term “adjusted federal income” means an amount
  147  equal to the taxpayer’s taxable income as defined in subsection
  148  (2), or such taxable income of more than one taxpayer as
  149  provided in s. 220.1363 s. 220.131, for the taxable year,
  150  adjusted as follows:
  151         (a) Additions.—There shall be added to such taxable income:
  152         1. The amount of any tax upon or measured by income,
  153  excluding taxes based on gross receipts or revenues, paid or
  154  accrued as a liability to the District of Columbia or any state
  155  of the United States which is deductible from gross income in
  156  the computation of taxable income for the taxable year.
  157         2. The amount of interest which is excluded from taxable
  158  income under s. 103(a) of the Internal Revenue Code or any other
  159  federal law, less the associated expenses disallowed in the
  160  computation of taxable income under s. 265 of the Internal
  161  Revenue Code or any other law, excluding 60 percent of any
  162  amounts included in alternative minimum taxable income, as
  163  defined in s. 55(b)(2) of the Internal Revenue Code, if the
  164  taxpayer pays tax under s. 220.11(3).
  165         3. In the case of a regulated investment company or real
  166  estate investment trust, an amount equal to the excess of the
  167  net long-term capital gain for the taxable year over the amount
  168  of the capital gain dividends attributable to the taxable year.
  169         4. That portion of the wages or salaries paid or incurred
  170  for the taxable year which is equal to the amount of the credit
  171  allowable for the taxable year under s. 220.181. This
  172  subparagraph shall expire on the date specified in s. 290.016
  173  for the expiration of the Florida Enterprise Zone Act.
  174         5. That portion of the ad valorem school taxes paid or
  175  incurred for the taxable year which is equal to the amount of
  176  the credit allowable for the taxable year under s. 220.182. This
  177  subparagraph shall expire on the date specified in s. 290.016
  178  for the expiration of the Florida Enterprise Zone Act.
  179         6. The amount taken as a credit under s. 220.195 which is
  180  deductible from gross income in the computation of taxable
  181  income for the taxable year.
  182         7. That portion of assessments to fund a guaranty
  183  association incurred for the taxable year which is equal to the
  184  amount of the credit allowable for the taxable year.
  185         8. In the case of a nonprofit corporation which holds a
  186  pari-mutuel permit and which is exempt from federal income tax
  187  as a farmers’ cooperative, an amount equal to the excess of the
  188  gross income attributable to the pari-mutuel operations over the
  189  attributable expenses for the taxable year.
  190         9. The amount taken as a credit for the taxable year under
  191  s. 220.1895.
  192         10. Up to nine percent of the eligible basis of any
  193  designated project which is equal to the credit allowable for
  194  the taxable year under s. 220.185.
  195         11. The amount taken as a credit for the taxable year under
  196  s. 220.1875. The addition in this subparagraph is intended to
  197  ensure that the same amount is not allowed for the tax purposes
  198  of this state as both a deduction from income and a credit
  199  against the tax. This addition is not intended to result in
  200  adding the same expense back to income more than once.
  201         12. The amount taken as a credit for the taxable year under
  202  s. 220.192.
  203         13. The amount taken as a credit for the taxable year under
  204  s. 220.193.
  205         14. Any portion of a qualified investment, as defined in s.
  206  288.9913, which is claimed as a deduction by the taxpayer and
  207  taken as a credit against income tax pursuant to s. 288.9916.
  208         15. The costs to acquire a tax credit pursuant to s.
  209  288.1254(5) that are deducted from or otherwise reduce federal
  210  taxable income for the taxable year.
  211         16. The amount taken as a credit for the taxable year
  212  pursuant to s. 220.194.
  213         17. The amount taken as a credit for the taxable year under
  214  s. 220.196. The addition in this subparagraph is intended to
  215  ensure that the same amount is not allowed for the tax purposes
  216  of this state as both a deduction from income and a credit
  217  against the tax. The addition is not intended to result in
  218  adding the same expense back to income more than once.
  219         (b) Subtractions.—
  220         1. There shall be subtracted from such taxable income:
  221         a. The net operating loss deduction allowable for federal
  222  income tax purposes under s. 172 of the Internal Revenue Code
  223  for the taxable year, except that any net operating loss that is
  224  transferred pursuant to s. 220.194(6) may not be deducted by the
  225  seller,
  226         b. The net capital loss allowable for federal income tax
  227  purposes under s. 1212 of the Internal Revenue Code for the
  228  taxable year,
  229         c. The excess charitable contribution deduction allowable
  230  for federal income tax purposes under s. 170(d)(2) of the
  231  Internal Revenue Code for the taxable year, and
  232         d. The excess contributions deductions allowable for
  233  federal income tax purposes under s. 404 of the Internal Revenue
  234  Code for the taxable year.
  235  
  236  However, a net operating loss and a capital loss shall never be
  237  carried back as a deduction to a prior taxable year, but all
  238  deductions attributable to such losses shall be deemed net
  239  operating loss carryovers and capital loss carryovers,
  240  respectively, and treated in the same manner, to the same
  241  extent, and for the same time periods as are prescribed for such
  242  carryovers in ss. 172 and 1212, respectively, of the Internal
  243  Revenue Code. A deduction is not allowed for net operating
  244  losses, net capital losses, or excess contribution deductions
  245  under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404 for a member
  246  of a water’s edge group that is not a United States member.
  247  Carryovers of net operating losses, net capital losses, or
  248  excess contribution deductions under 26 U.S.C. ss. 170(d)(2),
  249  172, 1212, and 404 may be subtracted only by the member of the
  250  water’s edge group that generates a carryover.
  251         2. There shall be subtracted from such taxable income any
  252  amount to the extent included therein the following:
  253         a. Dividends treated as received from sources without the
  254  United States, as determined under s. 862 of the Internal
  255  Revenue Code.
  256         b. All amounts included in taxable income under s. 78 or s.
  257  951 of the Internal Revenue Code.
  258  
  259  However, as to any amount subtracted under this subparagraph,
  260  there shall be added to such taxable income all expenses
  261  deducted on the taxpayer’s return for the taxable year which are
  262  attributable, directly or indirectly, to such subtracted amount.
  263  Further, no amount shall be subtracted with respect to dividends
  264  paid or deemed paid by a Domestic International Sales
  265  Corporation.
  266         3. Amounts received by a member of a water’s edge group as
  267  dividends paid by another member of the water’s edge group shall
  268  be subtracted from the taxable income to the extent that the
  269  dividends are included in the taxable income.
  270         4.3. In computing “adjusted federal income” for taxable
  271  years beginning after December 31, 1976, there shall be allowed
  272  as a deduction the amount of wages and salaries paid or incurred
  273  within this state for the taxable year for which no deduction is
  274  allowed pursuant to s. 280C(a) of the Internal Revenue Code
  275  (relating to credit for employment of certain new employees).
  276         5.4. There shall be subtracted from such taxable income any
  277  amount of nonbusiness income included therein.
  278         6.5. There shall be subtracted any amount of taxes of
  279  foreign countries allowable as credits for taxable years
  280  beginning on or after September 1, 1985, under s. 901 of the
  281  Internal Revenue Code to any corporation which derived less than
  282  20 percent of its gross income or loss for its taxable year
  283  ended in 1984 from sources within the United States, as
  284  described in s. 861(a)(2)(A) of the Internal Revenue Code, not
  285  including credits allowed under ss. 902 and 960 of the Internal
  286  Revenue Code, withholding taxes on dividends within the meaning
  287  of sub-subparagraph 2.a., and withholding taxes on royalties,
  288  interest, technical service fees, and capital gains.
  289         7.6. Notwithstanding any other provision of this code,
  290  except with respect to amounts subtracted pursuant to
  291  subparagraphs 1. and 4. 3., any increment of any apportionment
  292  factor which is directly related to an increment of gross
  293  receipts or income which is deducted, subtracted, or otherwise
  294  excluded in determining adjusted federal income shall be
  295  excluded from both the numerator and denominator of such
  296  apportionment factor. Further, all valuations made for
  297  apportionment factor purposes shall be made on a basis
  298  consistent with the taxpayer’s method of accounting for federal
  299  income tax purposes.
  300         (c) Installment sales occurring after October 19, 1980.—
  301         1. In the case of any disposition made after October 19,
  302  1980, the income from an installment sale shall be taken into
  303  account for the purposes of this code in the same manner that
  304  such income is taken into account for federal income tax
  305  purposes.
  306         2. Any taxpayer who regularly sells or otherwise disposes
  307  of personal property on the installment plan and reports the
  308  income therefrom on the installment method for federal income
  309  tax purposes under s. 453(a) of the Internal Revenue Code shall
  310  report such income in the same manner under this code.
  311         (d) Nonallowable deductions.—A deduction for net operating
  312  losses, net capital losses, or excess contributions deductions
  313  under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
  314  Code which has been allowed in a prior taxable year for Florida
  315  tax purposes shall not be allowed for Florida tax purposes,
  316  notwithstanding the fact that such deduction has not been fully
  317  utilized for federal tax purposes.
  318         (e) Adjustments related to the Federal Economic Stimulus
  319  Act of 2008, the American Recovery and Reinvestment Act of 2009,
  320  the Small Business Jobs Act of 2010, and the Tax Relief,
  321  Unemployment Insurance Reauthorization, and Job Creation Act of
  322  2010.—Taxpayers shall be required to make the adjustments
  323  prescribed in this paragraph for Florida tax purposes in
  324  relation to certain tax benefits received pursuant to the
  325  Economic Stimulus Act of 2008, the American Recovery and
  326  Reinvestment Act of 2009, the Small Business Jobs Act of 2010,
  327  and the Tax Relief, Unemployment Insurance Reauthorization, and
  328  Job Creation Act of 2010.
  329         1. There shall be added to such taxable income an amount
  330  equal to 100 percent of any amount deducted for federal income
  331  tax purposes as bonus depreciation for the taxable year pursuant
  332  to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as
  333  amended by s. 103 of Pub. L. No. 110-185, s. 1201 of Pub. L. No.
  334  111-5, s. 2022 of Pub. L. No. 111-240, and s. 401 of Pub. L. No.
  335  111-312, for property placed in service after December 31, 2007,
  336  and before January 1, 2013. For the taxable year and for each of
  337  the 6 subsequent taxable years, there shall be subtracted from
  338  such taxable income an amount equal to one-seventh of the amount
  339  by which taxable income was increased pursuant to this
  340  subparagraph, notwithstanding any sale or other disposition of
  341  the property that is the subject of the adjustments and
  342  regardless of whether such property remains in service in the
  343  hands of the taxpayer.
  344         2. There shall be added to such taxable income an amount
  345  equal to 100 percent of any amount in excess of $128,000
  346  deducted for federal income tax purposes for the taxable year
  347  pursuant to s. 179 of the Internal Revenue Code of 1986, as
  348  amended by s. 102 of Pub. L. No. 110-185, s. 1202 of Pub. L. No.
  349  111-5, s. 2021 of Pub. L. No. 111-240, and s. 402 of Pub. L. No.
  350  111-312, for taxable years beginning after December 31, 2007,
  351  and before January 1, 2013. For the taxable year and for each of
  352  the 6 subsequent taxable years, there shall be subtracted from
  353  such taxable income one-seventh of the amount by which taxable
  354  income was increased pursuant to this subparagraph,
  355  notwithstanding any sale or other disposition of the property
  356  that is the subject of the adjustments and regardless of whether
  357  such property remains in service in the hands of the taxpayer.
  358         3. There shall be added to such taxable income an amount
  359  equal to the amount of deferred income not included in such
  360  taxable income pursuant to s. 108(i)(1) of the Internal Revenue
  361  Code of 1986, as amended by s. 1231 of Pub. L. No. 111-5. There
  362  shall be subtracted from such taxable income an amount equal to
  363  the amount of deferred income included in such taxable income
  364  pursuant to s. 108(i)(1) of the Internal Revenue Code of 1986,
  365  as amended by s. 1231 of Pub. L. No. 111-5.
  366         4. Subtractions available under this paragraph may be
  367  transferred to the surviving or acquiring entity following a
  368  merger or acquisition and used in the same manner and with the
  369  same limitations as specified by this paragraph.
  370         5. The additions and subtractions specified in this
  371  paragraph are intended to adjust taxable income for Florida tax
  372  purposes, and, notwithstanding any other provision of this code,
  373  such additions and subtractions shall be permitted to change a
  374  taxpayer’s net operating loss for Florida tax purposes.
  375         (2) For purposes of this section, a taxpayer’s taxable
  376  income for the taxable year means taxable income as defined in
  377  s. 63 of the Internal Revenue Code and properly reportable for
  378  federal income tax purposes for the taxable year, but subject to
  379  the limitations set forth in paragraph (1)(b) with respect to
  380  the deductions provided by ss. 172 (relating to net operating
  381  losses), 170(d)(2) (relating to excess charitable
  382  contributions), 404(a)(1)(D) (relating to excess pension trust
  383  contributions), 404(a)(3)(A) and (B) (to the extent relating to
  384  excess stock bonus and profit-sharing trust contributions), and
  385  1212 (relating to capital losses) of the Internal Revenue Code,
  386  except that, subject to the same limitations, the term:
  387         (f) “Taxable income,” in the case of a corporation which is
  388  a member of an affiliated group of corporations filing a
  389  consolidated income tax return for the taxable year for federal
  390  income tax purposes, means taxable income of such corporation
  391  for federal income tax purposes as if such corporation had filed
  392  a separate federal income tax return for the taxable year and
  393  each preceding taxable year for which it was a member of an
  394  affiliated group, unless a consolidated return for the taxpayer
  395  and others is required or elected under s. 220.131;
  396         Section 4. Section 220.136, Florida Statutes, is created to
  397  read:
  398         220.136 Determination of the members of a water’s edge
  399  group.—
  400         (1) MEMBERSHIP RULES.—
  401         (a) A corporation having 50 percent or more of its
  402  outstanding voting stock directly or indirectly owned or
  403  controlled by a water’s edge group is presumed to be a member of
  404  the group. A corporation having less than 50 percent of its
  405  outstanding voting stock directly or indirectly controlled by a
  406  water’s edge group is a member of the group if the business
  407  activities of the corporation show that the corporation is a
  408  member of the group. All of the income of a corporation that is
  409  a member of a water’s edge group is presumed to be unitary.
  410         (b) A corporation that conducts business outside the United
  411  States is not a member of a water’s edge group if 80 percent or
  412  more of the corporation’s property and payroll, as determined by
  413  the apportionment factors described in ss. 220.1363 and 220.15,
  414  may be assigned to locations outside the United States. However,
  415  such corporations that are incorporated in a tax haven may be a
  416  member of a water’s edge group pursuant to paragraph (a). This
  417  paragraph does not exempt a corporation that is not a member of
  418  a water’s edge group from the provisions of this chapter.
  419         (2) MEMBERSHIP EVALUATION CRITERIA.—
  420         (a) The attribution rules of 26 U.S.C. s. 318 shall be used
  421  to determine whether voting stock is owned indirectly.
  422         (b) As used in this paragraph, the term “United States”
  423  means the 50 states, the District of Columbia, and Puerto Rico.
  424         (c) The apportionment factors described in ss. 220.1363 and
  425  220.15 shall be used to determine whether a special industry
  426  corporation has engaged in a sufficient amount of activities
  427  outside the United States to exclude it from treatment as a
  428  member of a water’s edge group.
  429         Section 5. Section 220.1363, Florida Statutes, is created
  430  to read:
  431         220.1363 Water’s edge groups; special requirements.—
  432         (1) All members of a water’s edge group must use the
  433  water’s edge reporting method. Under the water’s edge reporting
  434  method:
  435         (a) Adjusted federal income for purposes of s. 220.12 means
  436  the sum of adjusted federal income for all members of the group
  437  as determined for a concurrent tax year.
  438         (b) The numerators and denominators of the apportionment
  439  factors shall be calculated for all members of the group
  440  combined.
  441         (c) Intercompany sales transactions between members of the
  442  group are not included in the numerator or denominator of the
  443  sales factor pursuant to ss. 220.15 and 220.151, regardless of
  444  whether indicia of a sale exist. As used in this subsection, the
  445  term “sale” includes, but is not limited to, loans, payments for
  446  the use of intangibles, dividends, and management fees.
  447         (d) For sales of intangibles, including, but not limited
  448  to, accounts receivable, notes, bonds, and stock, which are made
  449  to entities outside of the group, only the net proceeds are
  450  included in the numerator and denominator of the sales factor.
  451         (e) Sales that are not allocated or apportioned to any
  452  taxing jurisdiction, otherwise known as “nowhere sales,” may not
  453  be included in the numerator or denominator of the sales factor.
  454         (f) The income attributable to the Florida activities of a
  455  corporation that is exempt from taxation under Pub. L. No. 86
  456  272 is excluded from the apportionment factor numerators in the
  457  calculation of corporate income tax even if another member of
  458  the water’s edge group has nexus with Florida and is subject to
  459  tax.
  460         (g) For purposes of this section, the term “water’s edge
  461  reporting method” is a method to determine the taxable business
  462  profits of a group of entities conducting a unitary business.
  463  Under this method, the net income of the entities must be added
  464  together along with the additions and subtractions under s.
  465  220.13 and apportioned to this state as a single taxpayer under
  466  ss. 220.15 and 220.151. However, each special industry member
  467  included in a water’s edge group return, which would otherwise
  468  be permitted to use a special method of apportionment under s.
  469  220.151, shall convert its single-factor apportionment to a
  470  three-factor apportionment of property, payroll, and sales. The
  471  special industry member shall calculate the denominator of its
  472  property, payroll, and sales factors in the same manner as those
  473  denominators are calculated by members that are not a special
  474  industry member. The numerator of its sales, property, and
  475  payroll factors is the product of the denominator of each factor
  476  multiplied by the premiums or revenue-miles-factor ratio
  477  otherwise applicable under s. 220.151.
  478         (2)(a) A single water’s edge group return must be filed in
  479  the name and federal employer identification number of the
  480  parent corporation if the parent is a member of the group and
  481  has nexus with Florida. If the group does not have a parent
  482  corporation, if the parent corporation is not a member of the
  483  group, or if the parent corporation does not have nexus with
  484  Florida, the members of the group must choose a member subject
  485  to the Florida corporate income tax to file the return. The
  486  members of the group may not choose another member to file a
  487  corporate income tax return in subsequent years unless the
  488  filing member does not maintain nexus with Florida or remain a
  489  member of that group. The return must be signed by an authorized
  490  officer of the filing member as the agent for the group.
  491         (b) If members of a water’s edge group have different tax
  492  years, the tax year of a majority of the members of the group is
  493  the tax year of the group. If the tax years of a majority of the
  494  members of a group do not correspond, the tax year of the member
  495  that must file the return for the group is the tax year of the
  496  group.
  497         (c)1. A member of a water’s edge group having a tax year
  498  that does not correspond to the tax year of the group shall
  499  determine its income for inclusion on the tax return for the
  500  group. The member shall use:
  501         a. The precise amount of taxable income received during the
  502  months corresponding to the tax year of the group, if the
  503  precise amount can be readily determined from the member’s books
  504  and records.
  505         b. The taxable income of the member converted to conform to
  506  the tax year of the group on the basis of the number of months
  507  falling within the tax year of the group. For example, if the
  508  tax year of the water’s edge group is a calendar year and a
  509  member operates on a fiscal year ending on April 30, the income
  510  of the member shall include 8/12 of the income from the current
  511  tax year and 4/12 of the income from the preceding tax year.
  512  This method to determine the income of a member may be used only
  513  if the return can be timely filed after the end of the tax year
  514  of the group.
  515         c. The taxable income of the member during its tax year
  516  that ends within the tax year of the group.
  517         2. The method of determining the income of a member of a
  518  group whose tax year does not correspond to the tax year of the
  519  group may not change as long as the member remains a member of
  520  the group. The apportionment factors for the member must be
  521  applied to the income of the member for the tax year of the
  522  group.
  523         (3)(a) A water’s edge group return shall include a
  524  computational schedule that:
  525         1. Combines the federal income of all members of the
  526  water’s edge group;
  527         2. Shows all intercompany eliminations;
  528         3. Shows Florida additions and subtractions under s.
  529  220.13; and
  530         4. Shows the calculation of the combined apportionment
  531  factors.
  532         (b) A water’s edge group shall also file a domestic
  533  disclosure spreadsheet in addition to its return. The
  534  spreadsheet shall fully disclose:
  535         1. The income reported to each state;
  536         2. The state tax liability;
  537         3. The method used for apportioning or allocating income to
  538  the various states; and
  539         4. Other information required by the department by rule in
  540  order to determine the proper amount of tax due to each state
  541  and to identify the water’s edge group.
  542         (4) The department shall adopt rules and forms to
  543  administer this section. The Legislature intends to grant the
  544  department extensive authority to adopt rules and forms
  545  describing and defining principles for determining the existence
  546  of a water’s edge business, definitions of common control,
  547  methods of reporting, and related forms, principles, and other
  548  definitions.
  549         Section 6. Section 220.14, Florida Statutes, is amended to
  550  read:
  551         220.14 Exemption.—
  552         (1) In computing a taxpayer’s liability for tax under this
  553  code, there shall be exempt from the tax $25,000 of net income
  554  as defined in s. 220.12 or such lesser amount as will, without
  555  increasing the taxpayer’s federal income tax liability, provide
  556  the state with an amount under this code which is equal to the
  557  maximum federal income tax credit which may be available from
  558  time to time under federal law.
  559         (2) In the case of a taxable year for a period of less than
  560  12 months, the exemption allowed by this section shall be
  561  prorated on the basis of the number of days in such year to 365,
  562  or in the case of a leap year, to 366.
  563         (3) Only one exemption shall be allowed to taxpayers filing
  564  a water’s edge group consolidated return under this code.
  565         (4) Notwithstanding any other provision of this code, not
  566  more than one exemption under this section may be allowed to the
  567  Florida members of a controlled group of corporations, as
  568  defined in s. 1563 of the Internal Revenue Code with respect to
  569  taxable years ending on or after December 31, 1970, filing
  570  separate returns under this code. The exemption described in
  571  this section shall be divided equally among such Florida members
  572  of the group, unless all of such members consent, at such time
  573  and in such manner as the department shall by regulation
  574  prescribe, to an apportionment plan providing for an unequal
  575  allocation of such exemption.
  576         Section 7. Subsection (5) of section 220.15, Florida
  577  Statutes, is amended to read:
  578         220.15 Apportionment of adjusted federal income.—
  579         (5) The sales factor is a fraction the numerator of which
  580  is the total sales of the taxpayer in this state during the
  581  taxable year or period and the denominator of which is the total
  582  sales of the taxpayer everywhere during the taxable year or
  583  period.
  584         (a) As used in this subsection, the term “sales” means all
  585  gross receipts of the taxpayer except interest, dividends,
  586  rents, royalties, and gross receipts from the sale, exchange,
  587  maturity, redemption, or other disposition of securities.
  588  However:
  589         1. Rental income is included in the term if a significant
  590  portion of the taxpayer’s business consists of leasing or
  591  renting real or tangible personal property; and
  592         2. Royalty income is included in the term if a significant
  593  portion of the taxpayer’s business consists of dealing in or
  594  with the production, exploration, or development of minerals.
  595         (b)1. Sales of tangible personal property occur in this
  596  state if:
  597         a. The property is delivered or shipped to a purchaser
  598  other than the United States Government within this state,
  599  regardless of the f.o.b. point, other conditions of the sale, or
  600  ultimate destination of the property, unless shipment is made
  601  via a common or contract carrier; or
  602         b. The property is shipped from an office, store,
  603  warehouse, factory, or other place of storage in this state and
  604  the purchaser is the United States Government or the taxpayer is
  605  not taxable in the state of the purchaser.
  606  
  607  However, for industries in NAICS National Number 311411, if the
  608  ultimate destination of the product is to a location outside
  609  this state, regardless of the method of shipment or f.o.b.
  610  point, or the taxability of the taxpayer in the state of the
  611  purchaser, the sale shall not be deemed to occur in this state.
  612  As used in this paragraph, “NAICS” means those classifications
  613  contained in the North American Industry Classification System,
  614  as published in 2007 by the Office of Management and Budget,
  615  Executive Office of the President.
  616         2. When citrus fruit is delivered by a cooperative for a
  617  grower-member, by a grower-member to a cooperative, or by a
  618  grower-participant to a Florida processor, the sales factor for
  619  the growers for such citrus fruit delivered to such processor
  620  shall be the same as the sales factor for the most recent
  621  taxable year of that processor. That sales factor, expressed
  622  only as a percentage and not in terms of the dollar volume of
  623  sales, so as to protect the confidentiality of the sales of the
  624  processor, shall be furnished on the request of such a grower
  625  promptly after it has been determined for that taxable year.
  626         3. Reimbursement of expenses under an agency contract
  627  between a cooperative, a grower-member of a cooperative, or a
  628  grower and a processor is not a sale within this state.
  629         (c) Sales of a financial organization, including, but not
  630  limited to, banking and savings institutions, investment
  631  companies, real estate investment trusts, and brokerage
  632  companies, occur in this state if derived from:
  633         1. Fees, commissions, or other compensation for financial
  634  services rendered within this state;
  635         2. Gross profits from trading in stocks, bonds, or other
  636  securities managed within this state;
  637         3. Interest received within this state, other than interest
  638  from loans secured by mortgages, deeds of trust, or other liens
  639  upon real or tangible personal property located without this
  640  state, and dividends received within this state;
  641         4. Interest charged to customers at places of business
  642  maintained within this state for carrying debit balances of
  643  margin accounts, without deduction of any costs incurred in
  644  carrying such accounts;
  645         5. Interest, fees, commissions, or other charges or gains
  646  from loans secured by mortgages, deeds of trust, or other liens
  647  upon real or tangible personal property located in this state or
  648  from installment sale agreements originally executed by a
  649  taxpayer or the taxpayer’s agent to sell real or tangible
  650  personal property located in this state;
  651         6. Rents from real or tangible personal property located in
  652  this state; or
  653         7. Any other gross income, including other interest,
  654  resulting from the operation as a financial organization within
  655  this state.
  656  
  657  In computing the amounts under this paragraph, any amount
  658  received by a member of an affiliated group (determined under s.
  659  1504(a) of the Internal Revenue Code, but without reference to
  660  whether any such corporation is an “includable corporation”
  661  under s. 1504(b) of the Internal Revenue Code) from another
  662  member of such group shall be included only to the extent such
  663  amount exceeds expenses of the recipient directly related
  664  thereto.
  665         Section 8. Subsection (1) of section 220.183, Florida
  666  Statutes, is amended to read:
  667         220.183 Community contribution tax credit.—
  668         (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
  669  CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
  670  SPENDING.—
  671         (a) There shall be allowed a credit of 50 percent of a
  672  community contribution against any tax due for a taxable year
  673  under this chapter.
  674         (b) No business firm shall receive more than $200,000 in
  675  annual tax credits for all approved community contributions made
  676  in any one year.
  677         (c) The total amount of tax credit which may be granted for
  678  all programs approved under this section, s. 212.08(5)(p), and
  679  s. 624.5105 is $10.5 million annually for projects that provide
  680  homeownership opportunities for low-income or very-low-income
  681  households as defined in s. 420.9071(19) and (28) and $3.5
  682  million annually for all other projects.
  683         (d) All proposals for the granting of the tax credit shall
  684  require the prior approval of the Department of Economic
  685  Opportunity.
  686         (e) If the credit granted pursuant to this section is not
  687  fully used in any one year because of insufficient tax liability
  688  on the part of the business firm, the unused amount may be
  689  carried forward for a period not to exceed 5 years. The
  690  carryover credit may be used in a subsequent year when the tax
  691  imposed by this chapter for such year exceeds the credit for
  692  such year under this section after applying the other credits
  693  and unused credit carryovers in the order provided in s.
  694  220.02(8).
  695         (f) A taxpayer who files a Florida consolidated return as a
  696  member of an affiliated group pursuant to s. 220.131(1) may be
  697  allowed the credit on a consolidated return basis.
  698         (f)(g) A taxpayer who is eligible to receive the credit
  699  provided for in s. 624.5105 is not eligible to receive the
  700  credit provided by this section.
  701         Section 9. Subsection (2) of section 220.1845, Florida
  702  Statutes, is amended to read:
  703         220.1845 Contaminated site rehabilitation tax credit.—
  704         (2) AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.—
  705         (a) A credit in the amount of 50 percent of the costs of
  706  voluntary cleanup activity that is integral to site
  707  rehabilitation at the following sites is available against any
  708  tax due for a taxable year under this chapter:
  709         1. A drycleaning-solvent-contaminated site eligible for
  710  state-funded site rehabilitation under s. 376.3078(3);
  711         2. A drycleaning-solvent-contaminated site at which site
  712  rehabilitation is undertaken by the real property owner pursuant
  713  to s. 376.3078(11), if the real property owner is not also, and
  714  has never been, the owner or operator of the drycleaning
  715  facility where the contamination exists; or
  716         3. A brownfield site in a designated brownfield area under
  717  s. 376.80.
  718         (b) A tax credit applicant, or multiple tax credit
  719  applicants working jointly to clean up a single site, may not be
  720  granted more than $500,000 per year in tax credits for each site
  721  voluntarily rehabilitated. Multiple tax credit applicants shall
  722  be granted tax credits in the same proportion as their
  723  contribution to payment of cleanup costs. Subject to the same
  724  conditions and limitations as provided in this section, a
  725  municipality, county, or other tax credit applicant which
  726  voluntarily rehabilitates a site may receive not more than
  727  $500,000 per year in tax credits which it can subsequently
  728  transfer subject to the provisions in paragraph (f) (g).
  729         (c) If the credit granted under this section is not fully
  730  used in any one year because of insufficient tax liability on
  731  the part of the corporation, the unused amount may be carried
  732  forward for up to 5 years. The carryover credit may be used in a
  733  subsequent year if the tax imposed by this chapter for that year
  734  exceeds the credit for which the corporation is eligible in that
  735  year after applying the other credits and unused carryovers in
  736  the order provided by s. 220.02(8). If during the 5-year period
  737  the credit is transferred, in whole or in part, pursuant to
  738  paragraph (f) (g), each transferee has 5 years after the date of
  739  transfer to use its credit.
  740         (d) A taxpayer that files a consolidated return in this
  741  state as a member of an affiliated group under s. 220.131(1) may
  742  be allowed the credit on a consolidated return basis up to the
  743  amount of tax imposed upon the consolidated group.
  744         (d)(e) A tax credit applicant that receives state-funded
  745  site rehabilitation under s. 376.3078(3) for rehabilitation of a
  746  drycleaning-solvent-contaminated site is ineligible to receive
  747  credit under this section for costs incurred by the tax credit
  748  applicant in conjunction with the rehabilitation of that site
  749  during the same time period that state-administered site
  750  rehabilitation was underway.
  751         (e)(f) The total amount of the tax credits which may be
  752  granted under this section is $5 million annually.
  753         (f)(g)1. Tax credits that may be available under this
  754  section to an entity eligible under s. 376.30781 may be
  755  transferred after a merger or acquisition to the surviving or
  756  acquiring entity and used in the same manner and with the same
  757  limitations.
  758         2. The entity or its surviving or acquiring entity as
  759  described in subparagraph 1., may transfer any unused credit in
  760  whole or in units of at least 25 percent of the remaining
  761  credit. The entity acquiring such credit may use it in the same
  762  manner and with the same limitation as described in this
  763  section. Such transferred credits may not be transferred again
  764  although they may succeed to a surviving or acquiring entity
  765  subject to the same conditions and limitations as described in
  766  this section.
  767         3. If the credit is reduced due to a determination by the
  768  Department of Environmental Protection or an examination or
  769  audit by the Department of Revenue, the tax deficiency shall be
  770  recovered from the first entity, or the surviving or acquiring
  771  entity that claimed the credit up to the amount of credit taken.
  772  Any subsequent deficiencies shall be assessed against the entity
  773  acquiring and claiming the credit, or in the case of multiple
  774  succeeding entities in the order of credit succession.
  775         (g)(h) In order to encourage completion of site
  776  rehabilitation at contaminated sites being voluntarily cleaned
  777  up and eligible for a tax credit under this section, the tax
  778  credit applicant may claim an additional 25 percent of the total
  779  cleanup costs, not to exceed $500,000, in the final year of
  780  cleanup as evidenced by the Department of Environmental
  781  Protection issuing a “No Further Action” order for that site.
  782         (h)(i) In order to encourage the construction of housing
  783  that meets the definition of affordable provided in s. 420.0004,
  784  an applicant for the tax credit may claim an additional 25
  785  percent of the total site rehabilitation costs that are eligible
  786  for tax credits under this section, not to exceed $500,000. In
  787  order to receive this additional tax credit, the applicant must
  788  provide a certification letter from the Florida Housing Finance
  789  Corporation, the local housing authority, or other governmental
  790  agency that is a party to the use agreement indicating that the
  791  construction on the brownfield site has received a certificate
  792  of occupancy and the brownfield site has a properly recorded
  793  instrument that limits the use of the property to housing that
  794  meets the definition of affordable provided in s. 420.0004.
  795         (i)(j) In order to encourage the redevelopment of a
  796  brownfield site, as defined in the brownfield site
  797  rehabilitation agreement, that is hindered by the presence of
  798  solid waste, as defined in s. 403.703, a tax credit applicant,
  799  or multiple tax credit applicants working jointly to clean up a
  800  single brownfield site, may also claim costs required to address
  801  solid waste removal as defined in this paragraph in accordance
  802  with rules of the Department of Environmental Protection.
  803  Multiple tax credit applicants shall be granted tax credits in
  804  the same proportion as each applicant’s contribution to payment
  805  of solid waste removal costs. These costs are eligible for a tax
  806  credit provided the applicant submits an affidavit stating that,
  807  after consultation with appropriate local government officials
  808  and the Department of Environmental Protection, to the best of
  809  the applicant’s knowledge according to such consultation and
  810  available historical records, the brownfield site was never
  811  operated as a permitted solid waste disposal area or was never
  812  operated for monetary compensation and the applicant submits all
  813  other documentation and certifications required by this section.
  814  Under this section, wherever reference is made to “site
  815  rehabilitation,” the Department of Environmental Protection
  816  shall instead consider whether or not the costs claimed are for
  817  solid waste removal. Tax credit applications claiming costs
  818  pursuant to this paragraph shall not be subject to the calendar
  819  year limitation and January 31 annual application deadline, and
  820  the Department of Environmental Protection shall accept a one
  821  time application filed subsequent to the completion by the tax
  822  credit applicant of the applicable requirements listed in this
  823  section. A tax credit applicant may claim 50 percent of the cost
  824  for solid waste removal, not to exceed $500,000, after the
  825  applicant has determined solid waste removal is completed for
  826  the brownfield site. A solid waste removal tax credit
  827  application may be filed only once per brownfield site. For the
  828  purposes of this section, the term:
  829         1. “Solid waste disposal area” means a landfill, dump, or
  830  other area where solid waste has been disposed of.
  831         2. “Monetary compensation” means the fees that were charged
  832  or the assessments that were levied for the disposal of solid
  833  waste at a solid waste disposal area.
  834         3. “Solid waste removal” means removal of solid waste from
  835  the land surface or excavation of solid waste from below the
  836  land surface and removal of the solid waste from the brownfield
  837  site. The term also includes:
  838         a. Transportation of solid waste to a licensed or exempt
  839  solid waste management facility or to a temporary storage area.
  840         b. Sorting or screening of solid waste prior to removal
  841  from the site.
  842         c. Deposition of solid waste at a permitted or exempt solid
  843  waste management facility, whether the solid waste is disposed
  844  of or recycled.
  845         (j)(k) In order to encourage the construction and operation
  846  of a new health care facility as defined in s. 408.032 or s.
  847  408.07, or a health care provider as defined in s. 408.07 or s.
  848  408.7056, on a brownfield site, an applicant for a tax credit
  849  may claim an additional 25 percent of the total site
  850  rehabilitation costs, not to exceed $500,000, if the applicant
  851  meets the requirements of this paragraph. In order to receive
  852  this additional tax credit, the applicant must provide
  853  documentation indicating that the construction of the health
  854  care facility or health care provider by the applicant on the
  855  brownfield site has received a certificate of occupancy or a
  856  license or certificate has been issued for the operation of the
  857  health care facility or health care provider.
  858         Section 10. Section 220.1875, Florida Statutes, is amended
  859  to read:
  860         220.1875 Credit for contributions to eligible nonprofit
  861  scholarship-funding organizations.—
  862         (1) There is allowed a credit of 100 percent of an eligible
  863  contribution made to an eligible nonprofit scholarship-funding
  864  organization under s. 1002.395 against any tax due for a taxable
  865  year under this chapter after the application of any other
  866  allowable credits by the taxpayer. The credit granted by this
  867  section shall be reduced by the difference between the amount of
  868  federal corporate income tax taking into account the credit
  869  granted by this section and the amount of federal corporate
  870  income tax without application of the credit granted by this
  871  section.
  872         (2) A taxpayer who files a Florida consolidated return as a
  873  member of an affiliated group pursuant to s. 220.131(1) may be
  874  allowed the credit on a consolidated return basis; however, the
  875  total credit taken by the affiliated group is subject to the
  876  limitation established under subsection (1).
  877         (2)(3) The provisions of s. 1002.395 apply to the credit
  878  authorized by this section.
  879         Section 11. Subsection (3) of section 220.191, Florida
  880  Statutes, is amended to read:
  881         220.191 Capital investment tax credit.—
  882         (3)(a) Notwithstanding subsection (2), an annual credit
  883  against the tax imposed by this chapter shall be granted to a
  884  qualifying business which establishes a qualifying project
  885  pursuant to subparagraph (1)(g)3., in an amount equal to the
  886  lesser of $15 million or 5 percent of the eligible capital costs
  887  made in connection with a qualifying project, for a period not
  888  to exceed 20 years beginning with the commencement of operations
  889  of the project. The tax credit shall be granted against the
  890  corporate income tax liability of the qualifying business and as
  891  further provided in paragraph (c). The total tax credit provided
  892  pursuant to this subsection shall be equal to no more than 100
  893  percent of the eligible capital costs of the qualifying project.
  894         (b) If the credit granted under this subsection is not
  895  fully used in any one year because of insufficient tax liability
  896  on the part of the qualifying business, the unused amount may be
  897  carried forward for a period not to exceed 20 years after the
  898  commencement of operations of the project. The carryover credit
  899  may be used in a subsequent year when the tax imposed by this
  900  chapter for that year exceeds the credit for which the
  901  qualifying business is eligible in that year under this
  902  subsection after applying the other credits and unused
  903  carryovers in the order provided by s. 220.02(8).
  904         (c) The credit granted under this subsection may be used in
  905  whole or in part by the qualifying business or any corporation
  906  that is either a member of that qualifying business’s affiliated
  907  group of corporations, is a related entity taxable as a
  908  cooperative under subchapter T of the Internal Revenue Code, or,
  909  if the qualifying business is an entity taxable as a cooperative
  910  under subchapter T of the Internal Revenue Code, is related to
  911  the qualifying business. Any entity related to the qualifying
  912  business may continue to file as a member of a Florida-nexus
  913  consolidated group pursuant to a prior election made under s.
  914  220.131(1), Florida Statutes (1985), even if the parent of the
  915  group changes due to a direct or indirect acquisition of the
  916  former common parent of the group. Any credit can be used by any
  917  of the affiliated companies or related entities referenced in
  918  this paragraph to the same extent as it could have been used by
  919  the qualifying business. However, any such use shall not operate
  920  to increase the amount of the credit or extend the period within
  921  which the credit must be used.
  922         Section 12. Subsection (2) of section 220.192, Florida
  923  Statutes, is amended to read:
  924         220.192 Renewable energy technologies investment tax
  925  credit.—
  926         (2) TAX CREDIT.—For tax years beginning on or after January
  927  1, 2007, a credit against the tax imposed by this chapter shall
  928  be granted in an amount equal to the eligible costs. Credits may
  929  be used in tax years beginning January 1, 2007, and ending
  930  December 31, 2010, after which the credit shall expire. If the
  931  credit is not fully used in any one tax year because of
  932  insufficient tax liability on the part of the corporation, the
  933  unused amount may be carried forward and used in tax years
  934  beginning January 1, 2007, and ending December 31, 2012, after
  935  which the credit carryover expires and may not be used. A
  936  taxpayer that files a consolidated return in this state as a
  937  member of an affiliated group under s. 220.131(1) may be allowed
  938  the credit on a consolidated return basis up to the amount of
  939  tax imposed upon the consolidated group. Any eligible cost for
  940  which a credit is claimed and which is deducted or otherwise
  941  reduces federal taxable income shall be added back in computing
  942  adjusted federal income under s. 220.13.
  943         Section 13. Subsection (3) of section 220.193, Florida
  944  Statutes, is amended to read:
  945         220.193 Florida renewable energy production credit.—
  946         (3) An annual credit against the tax imposed by this
  947  section shall be allowed to a taxpayer, based on the taxpayer’s
  948  production and sale of electricity from a new or expanded
  949  Florida renewable energy facility. For a new facility, the
  950  credit shall be based on the taxpayer’s sale of the facility’s
  951  entire electrical production. For an expanded facility, the
  952  credit shall be based on the increases in the facility’s
  953  electrical production that are achieved after May 1, 2006.
  954         (a) The credit shall be $0.01 for each kilowatt-hour of
  955  electricity produced and sold by the taxpayer to an unrelated
  956  party during a given tax year.
  957         (b) The credit may be claimed for electricity produced and
  958  sold on or after January 1, 2007. Beginning in 2008 and
  959  continuing until 2011, each taxpayer claiming a credit under
  960  this section must first apply to the department by February 1 of
  961  each year for an allocation of available credit. The department,
  962  in consultation with the commission, shall develop an
  963  application form. The application form shall, at a minimum,
  964  require a sworn affidavit from each taxpayer certifying the
  965  increase in production and sales that form the basis of the
  966  application and certifying that all information contained in the
  967  application is true and correct.
  968         (c) If the amount of credits applied for each year exceeds
  969  $5 million, the department shall award to each applicant a
  970  prorated amount based on each applicant’s increased production
  971  and sales and the increased production and sales of all
  972  applicants.
  973         (d) If the credit granted pursuant to this section is not
  974  fully used in one year because of insufficient tax liability on
  975  the part of the taxpayer, the unused amount may be carried
  976  forward for a period not to exceed 5 years. The carryover credit
  977  may be used in a subsequent year when the tax imposed by this
  978  chapter for such year exceeds the credit for such year, after
  979  applying the other credits and unused credit carryovers in the
  980  order provided in s. 220.02(8).
  981         (e) A taxpayer that files a consolidated return in this
  982  state as a member of an affiliated group under s. 220.131(1) may
  983  be allowed the credit on a consolidated return basis up to the
  984  amount of tax imposed upon the consolidated group.
  985         (e)(f)1. Tax credits that may be available under this
  986  section to an entity eligible under this section may be
  987  transferred after a merger or acquisition to the surviving or
  988  acquiring entity and used in the same manner with the same
  989  limitations.
  990         2. The entity or its surviving or acquiring entity as
  991  described in subparagraph 1. may transfer any unused credit in
  992  whole or in units of no less than 25 percent of the remaining
  993  credit. The entity acquiring such credit may use it in the same
  994  manner and with the same limitations under this section. Such
  995  transferred credits may not be transferred again although they
  996  may succeed to a surviving or acquiring entity subject to the
  997  same conditions and limitations as described in this section.
  998         3. In the event the credit provided for under this section
  999  is reduced as a result of an examination or audit by the
 1000  department, such tax deficiency shall be recovered from the
 1001  first entity or the surviving or acquiring entity to have
 1002  claimed such credit up to the amount of credit taken. Any
 1003  subsequent deficiencies shall be assessed against any entity
 1004  acquiring and claiming such credit, or in the case of multiple
 1005  succeeding entities in the order of credit succession.
 1006         (f)(g) Notwithstanding any other provision of this section,
 1007  credits for the production and sale of electricity from a new or
 1008  expanded Florida renewable energy facility may be earned between
 1009  January 1, 2007, and June 30, 2010. The combined total amount of
 1010  tax credits which may be granted for all taxpayers under this
 1011  section is limited to $5 million per state fiscal year.
 1012         (g)(h) A taxpayer claiming a credit under this section
 1013  shall be required to add back to net income that portion of its
 1014  business deductions claimed on its federal return paid or
 1015  incurred for the taxable year which is equal to the amount of
 1016  the credit allowable for the taxable year under this section.
 1017         (h)(i) A taxpayer claiming credit under this section may
 1018  not claim a credit under s. 220.192. A taxpayer claiming credit
 1019  under s. 220.192 may not claim a credit under this section.
 1020         (i)(j) When an entity treated as a partnership or a
 1021  disregarded entity under this chapter produces and sells
 1022  electricity from a new or expanded renewable energy facility,
 1023  the credit earned by such entity shall pass through in the same
 1024  manner as items of income and expense pass through for federal
 1025  income tax purposes. When an entity applies for the credit and
 1026  the entity has received the credit by a pass-through, the
 1027  application must identify the taxpayer that passed the credit
 1028  through, all taxpayers that received the credit, and the
 1029  percentage of the credit that passes through to each recipient
 1030  and must provide other information that the department requires.
 1031         (j)(k) A taxpayer’s use of the credit granted pursuant to
 1032  this section does not reduce the amount of any credit available
 1033  to such taxpayer under s. 220.186.
 1034         Section 14. Section 220.51, Florida Statutes, is amended to
 1035  read:
 1036         220.51 Promulgation of rules and regulations.—In accordance
 1037  with the Administrative Procedure Act, chapter 120, the
 1038  department is authorized to make, promulgate, and enforce such
 1039  reasonable rules and regulations, and to prescribe such forms
 1040  relating to the administration and enforcement of the provisions
 1041  of this code, as it may deem appropriate, including:
 1042         (1) Rules for initial implementation of this code and for
 1043  taxpayers’ transitional taxable years commencing before and
 1044  ending after January 1, 1972.;
 1045         (2) Rules or regulations to clarify whether certain groups,
 1046  organizations, or associations formed under the laws of this
 1047  state or any other state, country, or jurisdiction shall be
 1048  deemed “taxpayers” for the purposes of this code, in accordance
 1049  with the legislative declarations of intent in s. 220.02.; and
 1050         (3) Regulations relating to consolidated reporting for
 1051  affiliated groups of corporations, in order to provide for an
 1052  equitable and just administration of this code with respect to
 1053  multicorporate taxpayers.
 1054         Section 15. Section 220.64, Florida Statutes, is amended to
 1055  read:
 1056         220.64 Other provisions applicable to franchise tax.—To the
 1057  extent that they are not manifestly incompatible with the
 1058  provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
 1059  X of this code and ss. 220.12, 220.13, 220.136, 220.1363,
 1060  220.15, and 220.16 apply to the franchise tax imposed by this
 1061  part. Under rules prescribed in s. 220.131, a consolidated
 1062  return may be filed by any affiliated group of corporations
 1063  composed of one or more banks or savings associations, its or
 1064  their Florida parent corporation, and any nonbank or nonsavings
 1065  subsidiaries of such parent corporation.
 1066         Section 16. Present paragraphs (g) and (h) of subsection
 1067  (4) of section 288.1254, Florida Statutes, are redesignated as
 1068  paragraphs (f) and (g), respectively, and present paragraph (f)
 1069  of subsection (4) and paragraph (a) of subsection (5) of that
 1070  section are amended to read:
 1071         288.1254 Entertainment industry financial incentive
 1072  program.—
 1073         (4) TAX CREDIT ELIGIBILITY; TAX CREDIT AWARDS; QUEUES;
 1074  ELECTION AND DISTRIBUTION; CARRYFORWARD; CONSOLIDATED RETURNS;
 1075  PARTNERSHIP AND NONCORPORATE DISTRIBUTIONS; MERGERS AND
 1076  ACQUISITIONS.—
 1077         (f) Consolidated returns.—A certified production company
 1078  that files a Florida consolidated return as a member of an
 1079  affiliated group under s. 220.131(1) may be allowed the credit
 1080  on a consolidated return basis up to the amount of the tax
 1081  imposed upon the consolidated group under chapter 220.
 1082         (5) TRANSFER OF TAX CREDITS.—
 1083         (a) Authorization.—Upon application to the Office of Film
 1084  and Entertainment and approval by the department, a certified
 1085  production company, or a partner or member that has received a
 1086  distribution under paragraph (4)(f) (4)(g), may elect to
 1087  transfer, in whole or in part, any unused credit amount granted
 1088  under this section. An election to transfer any unused tax
 1089  credit amount under chapter 212 or chapter 220 must be made no
 1090  later than 5 years after the date the credit is awarded, after
 1091  which period the credit expires and may not be used. The
 1092  department shall notify the Department of Revenue of the
 1093  election and transfer.
 1094         Section 17. Subsections (9) and (10) of section 376.30781,
 1095  Florida Statutes, are amended to read:
 1096         376.30781 Tax credits for rehabilitation of drycleaning
 1097  solvent-contaminated sites and brownfield sites in designated
 1098  brownfield areas; application process; rulemaking authority;
 1099  revocation authority.—
 1100         (9) On or before May 1, the Department of Environmental
 1101  Protection shall inform each tax credit applicant that is
 1102  subject to the January 31 annual application deadline of the
 1103  applicant’s eligibility status and the amount of any tax credit
 1104  due. The department shall provide each eligible tax credit
 1105  applicant with a tax credit certificate that must be submitted
 1106  with its tax return to the Department of Revenue to claim the
 1107  tax credit or be transferred pursuant to s. 220.1845(2)(f) s.
 1108  220.1845(2)(g). The May 1 deadline for annual site
 1109  rehabilitation tax credit certificate awards shall not apply to
 1110  any tax credit application for which the department has issued a
 1111  notice of deficiency pursuant to subsection (8). The department
 1112  shall respond within 90 days after receiving a response from the
 1113  tax credit applicant to such a notice of deficiency. Credits may
 1114  not result in the payment of refunds if total credits exceed the
 1115  amount of tax owed.
 1116         (10) For solid waste removal, new health care facility or
 1117  health care provider, and affordable housing tax credit
 1118  applications, the Department of Environmental Protection shall
 1119  inform the applicant of the department’s determination within 90
 1120  days after the application is deemed complete. Each eligible tax
 1121  credit applicant shall be informed of the amount of its tax
 1122  credit and provided with a tax credit certificate that must be
 1123  submitted with its tax return to the Department of Revenue to
 1124  claim the tax credit or be transferred pursuant to s.
 1125  220.1845(2)(f) s. 220.1845(2)(g). Credits may not result in the
 1126  payment of refunds if total credits exceed the amount of tax
 1127  owed.
 1128         Section 18. Paragraph (b) of subsection (4) of section
 1129  627.6699, Florida Statutes, is amended to read:
 1130         627.6699 Employee Health Care Access Act.—
 1131         (4) APPLICABILITY AND SCOPE.—
 1132         (b) With respect to a group of affiliated carriers or a
 1133  group of carriers that is eligible to file a consolidated
 1134  federal tax return, any restrictions, limitations, or
 1135  requirements of this section that apply to one of the carriers
 1136  applies to all of the carriers as if they were one carrier.
 1137  However, with respect to affiliated companies, all of which are
 1138  in existence and affiliated on January 1, 1992, the group of
 1139  affiliated companies is considered one carrier only after one
 1140  member of the group transfers any small employer business to
 1141  another member of the group.
 1142         Section 19. Transitional rules.—
 1143         (1) For the first tax year beginning on or after January 1,
 1144  2013, a taxpayer that filed a Florida corporate income tax
 1145  return in the preceding tax year that is a member of a water’s
 1146  edge group shall compute its income together with all members of
 1147  its water’s edge group and file a combined Florida corporate
 1148  income tax return with all members of its water’s edge group.
 1149         (2) An affiliated group of corporations that filed a
 1150  Florida consolidated corporate income tax return pursuant to an
 1151  election provided in s. 220.131, Florida Statutes, shall cease
 1152  filing a Florida consolidated corporate income tax return for
 1153  tax years beginning on or after January 1, 2013, and shall file
 1154  a combined Florida corporate income tax return with all members
 1155  of its water’s edge group.
 1156         (3) An affiliated group of corporations that filed a
 1157  Florida consolidated corporate income tax return pursuant to the
 1158  election in s. 220.131(1), Florida Statutes (1985), which
 1159  allowed the affiliated group to make an election within 90 days
 1160  after December 20, 1984, or upon filing the taxpayer’s first
 1161  return after December 20, 1984, whichever is later, shall cease
 1162  filing a Florida consolidated corporate income tax return using
 1163  that method for tax years beginning on or after January 1, 2013,
 1164  and shall file a combined Florida corporate income tax return
 1165  with all members of its water’s edge group.
 1166         (4) Taxpayers that are not members of a water’s edge group
 1167  remain subject to chapter 220, Florida Statutes, and shall file
 1168  a separate Florida corporate income tax return as previously
 1169  required.
 1170         (5) For the tax years beginning on or after January 1,
 1171  2013, a tax return for a member of a water’s edge group must be
 1172  a combined Florida corporate income tax return that includes tax
 1173  information for all members of the water’s edge group. The tax
 1174  return must be filed by a member that has a nexus with Florida.
 1175         Section 20. The funds recaptured pursuant to this act shall
 1176  be deposited into the General Revenue Fund.
 1177         Section 21. Section 220.131, Florida Statutes, is repealed.
 1178         Section 22. This act shall take effect July 1, 2012.