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THE BILL ITSELF

SB 238

Corporate Income Tax

VERSION S 238 Filed · BACK TO THE SUMMARY · OFFICIAL RECORD

underlined language is being added; struck language is being deleted. Line numbers are the Legislature's own — the same ones amendments cite.

Florida Senate - 2026 SB 238 By Senator Smith 17-00266-26 2026238__
1 A bill to be entitled
2 An act relating to corporate income tax; amending s.
3 220.03, F.S.; revising the definition of the term
4 “taxpayer”; defining the term “unitary combined
5 group”; amending s. 220.13, F.S.; revising the
6 definition of the term “adjusted federal income” to
7 prohibit specified deductions, limit certain
8 carryovers, and require subtractions of certain
9 dividends paid and received within a unitary combined
10 group to determine subtractions from taxable income;
11 conforming provisions to changes made by the act;
12 repealing s. 220.131, F.S., relating to the adjusted
13 federal income of affiliated groups; creating s.
14 220.136, F.S.; specifying circumstances under which a
15 corporation is considered a member of a unitary
16 combined group; creating s. 220.1363, F.S.; defining
17 the term “unitary combined reporting method”;
18 specifying requirements for, limitations on, and
19 prohibitions in calculating and reporting income in a
20 unitary combined group return; requiring all members
21 of a unitary combined group to use the unitary
22 combined reporting method; defining the term “sale”;
23 specifying requirements for designating the filing
24 member and the taxable year of the unitary combined
25 group; specifying income reporting requirements for
26 certain members of the unitary combined group;
27 requiring that a unitary combined group return include
28 a specified computational schedule and domestic
29 disclosure spreadsheet; authorizing the executive
30 director of the Department of Revenue to take
31 specified actions under certain circumstances;
32 authorizing the department to adopt rules and forms;
33 providing legislative intent regarding the adoption of
34 rules and forms; amending s. 220.14, F.S.; revising
35 the calculation for prorating a certain corporate
36 income tax exemption to reflect leap years; conforming
37 a provision to changes made by the act; amending s.
38 220.15, F.S.; revising provisions determining when
39 certain sales are considered to have occurred in this
40 state; amending ss. 220.183, 220.1845, 220.1875,
41 220.1876, 220.1877, 220.18775, 220.1878, 220.19,
42 220.191, 220.1991, and 220.51, F.S.; conforming
43 provisions to changes made by the act; amending s.
44 220.64, F.S.; providing applicability of unitary
45 combined group provisions to the franchise tax;
46 conforming provisions to changes made by the act;
47 amending s. 376.30781, F.S.; conforming cross
48 references; providing, beginning on a specified date,
49 requirements for corporate income tax return filings
50 for certain taxpayers; requiring that certain funds be
51 deposited into the General Revenue Fund; providing an
52 effective date.
54 Be It Enacted by the Legislature of the State of Florida:
56 Section 1. Paragraph (z) of subsection (1) of section
57 220.03, Florida Statutes, is amended, and paragraph (gg) is
58 added to that subsection, to read:
59 220.03 Definitions.—
60 (1) SPECIFIC TERMS.—When used in this code, and when not
61 otherwise distinctly expressed or manifestly incompatible with
62 the intent thereof, the following terms shall have the following
63 meanings:
64 (z) “Taxpayer” means any corporation subject to the tax
65 imposed by this code , and includes all corporations that are
66 members of a unitary combined group for which a consolidated
67 return is filed under s. 220.131 . However, the term “taxpayer”
68 does not include a corporation having no individuals , ( including
69 individuals employed by an affiliate , ) receiving compensation in
70 this state as defined in s. 220.15 when the only property owned
71 or leased by the said corporation , ( including an affiliate , ) in
72 this state is located at the premises of a printer with which it
73 has contracted for printing, if such property consists of the
74 final printed product, property which becomes a part of the
75 final printed product, or property from which the printed
76 product is produced.
77 (gg) “Unitary combined group” means a group of corporations
78 related through common ownership whose business activities are
79 integrated with, dependent upon, or contribute to a flow of
80 value among members of the group.
81 Section 2. Section 220.13, Florida Statutes, is amended to
82 read:
83 220.13 “Adjusted federal income” defined.—
84 (1) The term “adjusted federal income” means an amount
85 equal to the taxpayer’s taxable income as defined in subsection
86 (2), or such taxable income of a unitary combined group more
87 than one taxpayer as provided in s. 220.1363 s. 220.131 , for the
88 taxable year, adjusted as follows:
89 (a) Additions.—There shall be added to such taxable income:
90 1.a. The amount of any tax upon or measured by income,
91 excluding taxes based on gross receipts or revenues, paid or
92 accrued as a liability to the District of Columbia or any state
93 of the United States which is deductible from gross income in
94 the computation of taxable income for the taxable year.
95 b. Notwithstanding sub-subparagraph a., if a credit taken
96 under s. 220.1875, s. 220.1876, s. 220.1877, or s. 220.1878 is
97 added to taxable income in a previous taxable year under
98 subparagraph 11. and is taken as a deduction for federal tax
99 purposes in the current taxable year, the amount of the
100 deduction allowed shall not be added to taxable income in the
101 current year. The exception in this sub-subparagraph is intended
102 to ensure that the credit under s. 220.1875, s. 220.1876, s.
103 220.1877, or s. 220.1878 is added in the applicable taxable year
104 and does not result in a duplicate addition in a subsequent
105 year.
106 2. The amount of interest which is excluded from taxable
107 income under s. 103(a) of the Internal Revenue Code or any other
108 federal law, less the associated expenses disallowed in the
109 computation of taxable income under s. 265 of the Internal
110 Revenue Code or any other law, excluding 60 percent of any
111 amounts included in alternative minimum taxable income, as
112 defined in s. 55(b)(2) of the Internal Revenue Code, if the
113 taxpayer pays tax under s. 220.11(3).
114 3. In the case of a regulated investment company or real
115 estate investment trust, an amount equal to the excess of the
116 net long-term capital gain for the taxable year over the amount
117 of the capital gain dividends attributable to the taxable year.
118 4. That portion of the wages or salaries paid or incurred
119 for the taxable year which is equal to the amount of the credit
120 allowable for the taxable year under s. 220.181. This
121 subparagraph shall expire on the date specified in s. 290.016
122 for the expiration of the Florida Enterprise Zone Act.
123 5. That portion of the ad valorem school taxes paid or
124 incurred for the taxable year which is equal to the amount of
125 the credit allowable for the taxable year under s. 220.182. This
126 subparagraph shall expire on the date specified in s. 290.016
127 for the expiration of the Florida Enterprise Zone Act.
128 6. The amount taken as a credit under s. 220.195 which is
129 deductible from gross income in the computation of taxable
130 income for the taxable year.
131 7. That portion of assessments to fund a guaranty
132 association incurred for the taxable year which is equal to the
133 amount of the credit allowable for the taxable year.
134 8. In the case of a nonprofit corporation which holds a
135 pari-mutuel permit and which is exempt from federal income tax
136 as a farmers’ cooperative, an amount equal to the excess of the
137 gross income attributable to the pari-mutuel operations over the
138 attributable expenses for the taxable year.
139 9. The amount taken as a credit for the taxable year under
140 s. 220.1895.
141 10. Up to nine percent of the eligible basis of any
142 designated project which is equal to the credit allowable for
143 the taxable year under s. 220.185.
144 11. Any amount taken as a credit for the taxable year under
145 s. 220.1875, s. 220.1876, s. 220.1877, or s. 220.1878. The
146 addition in this subparagraph is intended to ensure that the
147 same amount is not allowed for the tax purposes of this state as
148 both a deduction from income and a credit against the tax. This
149 addition is not intended to result in adding the same expense
150 back to income more than once.
151 12. The amount taken as a credit for the taxable year under
152 s. 220.196. The addition in this subparagraph is intended to
153 ensure that the same amount is not allowed for the tax purposes
154 of this state as both a deduction from income and a credit
155 against the tax. The addition is not intended to result in
156 adding the same expense back to income more than once.
157 13. The amount taken as a credit for the taxable year
158 pursuant to s. 220.198.
159 14. The amount taken as a credit for the taxable year
160 pursuant to s. 220.1915.
161 15. The amount taken as a credit for the taxable year
162 pursuant to s. 220.199.
163 16. The amount taken as a credit for the taxable year
164 pursuant to s. 220.1991.
165 (b) Subtractions.—
166 1. There shall be subtracted from such taxable income:
167 a. The net operating loss deduction allowable for federal
168 income tax purposes under s. 172 of the Internal Revenue Code
169 for the taxable year,
170 b. The net capital loss allowable for federal income tax
171 purposes under s. 1212 of the Internal Revenue Code for the
172 taxable year,
173 c. The excess charitable contribution deduction allowable
174 for federal income tax purposes under s. 170(d)(2) of the
175 Internal Revenue Code for the taxable year, and
176 d. The excess contributions deductions allowable for
177 federal income tax purposes under s. 404 of the Internal Revenue
178 Code for the taxable year.
180 However, a net operating loss and a capital loss shall never be
181 carried back as a deduction to a prior taxable year, but all
182 deductions attributable to such losses shall be deemed net
183 operating loss carryovers and capital loss carryovers,
184 respectively, and treated in the same manner, to the same
185 extent, and for the same time periods as are prescribed for such
186 carryovers in ss. 172 and 1212, respectively, of the Internal
187 Revenue Code. A deduction is not allowed for excess charitable
188 contribution deductions, net operating losses, net capital loss
189 carrybacks or carryovers, or contributions to certain employee
190 plans under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404,
191 respectively, for a member of a unitary combined group which is
192 not a United States member. Carryovers of excess charitable
193 contribution deductions, net operating losses, net capital loss
194 carrybacks or carryovers, or contributions to certain employee
195 plans under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404,
196 respectively, may be subtracted only by the member of the
197 unitary combined group which generates a carryover.
198 2. There shall be subtracted from such taxable income any
199 amount to the extent included therein the following:
200 a. Dividends treated as received from sources without the
201 United States, as determined under s. 862 of the Internal
202 Revenue Code.
203 b. All amounts included in taxable income under s. 78, s.
204 951, or s. 951A of the Internal Revenue Code.
206 However, any amount subtracted under this subparagraph is
207 allowed only to the extent such amount is not deductible in
208 determining federal taxable income. As to any amount subtracted
209 under this subparagraph, there shall be added to such taxable
210 income all expenses deducted on the taxpayer’s return for the
211 taxable year which are attributable, directly or indirectly, to
212 such subtracted amount. Further, no amount shall be subtracted
213 with respect to dividends paid or deemed paid by a Domestic
214 International Sales Corporation.
215 3. Amounts received by a member of a unitary combined group
216 as dividends paid by another member of the unitary combined
217 group must be subtracted from the taxable income to the extent
218 that the dividends are included in the taxable income.
219 4. In computing “adjusted federal income” for taxable years
220 beginning after December 31, 1976, there shall be allowed as a
221 deduction the amount of wages and salaries paid or incurred
222 within this state for the taxable year for which no deduction is
223 allowed pursuant to s. 280C(a) of the Internal Revenue Code
224 (relating to credit for employment of certain new employees).
225 5. 4. There shall be subtracted from such taxable income any
226 amount of nonbusiness income included therein.
227 6. 5. There shall be subtracted any amount of taxes of
228 foreign countries allowable as credits for taxable years
229 beginning on or after September 1, 1985, under s. 901 of the
230 Internal Revenue Code to any corporation which derived less than
231 20 percent of its gross income or loss for its taxable year
232 ended in 1984 from sources within the United States, as
233 described in s. 861(a)(2)(A) of the Internal Revenue Code, not
234 including credits allowed under ss. 902 and 960 of the Internal
235 Revenue Code, withholding taxes on dividends within the meaning
236 of sub-subparagraph 2.a., and withholding taxes on royalties,
237 interest, technical service fees, and capital gains.
238 7. 6. Notwithstanding any other provision of this code,
239 except with respect to amounts subtracted pursuant to
240 subparagraphs 1. and 4. 3. , any increment of any apportionment
241 factor which is directly related to an increment of gross
242 receipts or income which is deducted, subtracted, or otherwise
243 excluded in determining adjusted federal income shall be
244 excluded from both the numerator and denominator of such
245 apportionment factor. Further, all valuations made for
246 apportionment factor purposes shall be made on a basis
247 consistent with the taxpayer’s method of accounting for federal
248 income tax purposes.
249 (c) Installment sales occurring after October 19, 1980.—
250 1. In the case of any disposition made after October 19,
251 1980, the income from an installment sale shall be taken into
252 account for the purposes of this code in the same manner that
253 such income is taken into account for federal income tax
254 purposes.
255 2. Any taxpayer who regularly sells or otherwise disposes
256 of personal property on the installment plan and reports the
257 income therefrom on the installment method for federal income
258 tax purposes under s. 453(a) of the Internal Revenue Code shall
259 report such income in the same manner under this code.
260 (d) Nonallowable deductions.—A deduction for net operating
261 losses, net capital losses, or excess contributions deductions
262 under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
263 Code which has been allowed in a prior taxable year for Florida
264 tax purposes shall not be allowed for Florida tax purposes,
265 notwithstanding the fact that such deduction has not been fully
266 utilized for federal tax purposes.
267 (e) Adjustments related to federal acts.—Taxpayers shall be
268 required to make the adjustments prescribed in this paragraph
269 for Florida tax purposes with respect to certain tax benefits
270 received pursuant to the Economic Stimulus Act of 2008; the
271 American Recovery and Reinvestment Act of 2009; the Small
272 Business Jobs Act of 2010; the Tax Relief, Unemployment
273 Insurance Reauthorization, and Job Creation Act of 2010; the
274 American Taxpayer Relief Act of 2012; the Tax Increase
275 Prevention Act of 2014; the Consolidated Appropriations Act,
276 2016; the Tax Cuts and Jobs Act of 2017; and the Coronavirus
277 Aid, Relief, and Economic Security Act of 2020.
278 1.a. There shall be added to such taxable income an amount
279 equal to 100 percent of any amount deducted for federal income
280 tax purposes as bonus depreciation for the taxable year pursuant
281 to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as
282 amended by s. 103 of Pub. L. No. 110-185; s. 1201 of Pub. L. No.
283 111-5; s. 2022 of Pub. L. No. 111-240; s. 401 of Pub. L. No.
284 111-312; s. 331 of Pub. L. No. 112-240; s. 125 of Pub. L. No.
285 113-295; s. 143 of Division Q of Pub. L. No. 114-113; and s.
286 13201 of Pub. L. No. 115-97, for property placed in service
287 after December 31, 2007, and before January 1, 2027.
288 b. For the taxable year and for each of the 6 subsequent
289 taxable years, there shall be subtracted from such taxable
290 income an amount equal to one-seventh of the amount by which
291 taxable income was increased pursuant to this subparagraph,
292 notwithstanding any sale or other disposition of the property
293 that is the subject of the adjustments and regardless of whether
294 such property remains in service in the hands of the taxpayer.
295 c. The provisions of sub-subparagraph b. do not apply to
296 amounts by which taxable income was increased pursuant to this
297 subparagraph for amounts deducted for federal income tax
298 purposes as bonus depreciation for qualified improvement
299 property as defined in s. 168(e)(6) of the Internal Revenue Code
300 of 1986, as amended by s. 13204 of Pub. L. No. 115-97.
301 2. There shall be added to such taxable income an amount
302 equal to 100 percent of any amount in excess of $128,000
303 deducted for federal income tax purposes for the taxable year
304 pursuant to s. 179 of the Internal Revenue Code of 1986, as
305 amended by s. 102 of Pub. L. No. 110-185; s. 1202 of Pub. L. No.
306 111-5; s. 2021 of Pub. L. No. 111-240; s. 402 of Pub. L. No.
307 111-312; s. 315 of Pub. L. No. 112-240; and s. 127 of Pub. L.
308 No. 113-295, for taxable years beginning after December 31,
309 2007, and before January 1, 2015. For the taxable year and for
310 each of the 6 subsequent taxable years, there shall be
311 subtracted from such taxable income one-seventh of the amount by
312 which taxable income was increased pursuant to this
313 subparagraph, notwithstanding any sale or other disposition of
314 the property that is the subject of the adjustments and
315 regardless of whether such property remains in service in the
316 hands of the taxpayer.
317 3. There shall be added to such taxable income an amount
318 equal to the amount of deferred income not included in such
319 taxable income pursuant to s. 108(i)(1) of the Internal Revenue
320 Code of 1986, as amended by s. 1231 of Pub. L. No. 111-5. There
321 shall be subtracted from such taxable income an amount equal to
322 the amount of deferred income included in such taxable income
323 pursuant to s. 108(i)(1) of the Internal Revenue Code of 1986,
324 as amended by s. 1231 of Pub. L. No. 111-5.
325 4. For taxable years beginning after December 31, 2018, and
326 before January 1, 2021, there shall be added to such taxable
327 income an amount equal to the excess, if any, of:
328 a. One hundred percent of any amount deducted for federal
329 income tax purposes as business interest expense for the taxable
330 year pursuant to s. 163(j) of the Internal Revenue Code of 1986,
331 as amended by s. 2306 of Pub. L. No. 116-136; over
332 b. One hundred percent of the amount that would be
333 deductible for federal income tax purposes as business interest
334 expense for the taxable year if calculated pursuant to s. 163(j)
335 of the Internal Revenue Code of 1986, as amended by s. 13301 of
336 Pub. L. No. 115-97.
338 Any expense added back pursuant to this subparagraph shall be
339 treated as a disallowed business expense carryforward from prior
340 years for the year or years following the addition, until such
341 time as the expense has been used.
342 5. With respect to qualified improvement property as
343 defined in s. 168(e)(6) of the Internal Revenue Code of 1986, as
344 amended by s. 13204 of Pub. L. No. 115-97, that was placed in
345 service on or after January 1, 2018:
346 a. There shall be added to such taxable income an amount
347 equal to 100 percent of any amount deducted for federal income
348 tax purposes under s. 167(a) of the Internal Revenue Code of
349 1986. There shall be subtracted an amount equal to the amount of
350 depreciation that would have been deductible pursuant to s.
351 167(a) of the Internal Revenue Code of 1986 in effect on January
352 1, 2020 and without regard to s. 2307 of Pub. L. No. 116-136,
353 notwithstanding any sale or other disposition of the property
354 that is the subject of the adjustments and regardless of whether
355 such property remains in service in the hands of the taxpayer.
356 b. The department may adopt rules necessary to administer
357 the provisions of this subparagraph, including rules, forms, and
358 guidelines for computing depreciation on qualified improvement
359 property, as defined in s. 168(e)(6) of the Internal Revenue
360 Code of 1986.
361 6. For taxable years beginning after December 31, 2020, and
362 before January 1, 2026, the changes made to the Internal Revenue
363 Code by Pub. L. No. 116-260, Division EE, Title I, s. 116 and
364 Title II, s. 210 shall not apply to this chapter. Taxable income
365 under this section shall be calculated as though changes made by
366 those sections were not made to the Internal Revenue Code. The
367 Department of Revenue may adopt rules necessary to administer
368 the provisions of this subparagraph, including rules, forms, and
369 guidelines for treatment of expenses and depreciation related to
370 these changes.
371 7. Subtractions available under this paragraph may be
372 transferred to the surviving or acquiring entity following a
373 merger or acquisition and used in the same manner and with the
374 same limitations as specified by this paragraph.
375 8. The additions and subtractions specified in this
376 paragraph are intended to adjust taxable income for Florida tax
377 purposes, and, notwithstanding any other provision of this code,
378 such additions and subtractions shall be permitted to change a
379 taxpayer’s net operating loss for Florida tax purposes.
380 (2) For purposes of this section, a taxpayer’s taxable
381 income for the taxable year means taxable income as defined in
382 s. 63 of the Internal Revenue Code and properly reportable for
383 federal income tax purposes for the taxable year, but subject to
384 the limitations set forth in paragraph (1)(b) with respect to
385 the deductions provided by ss. 172 (relating to net operating
386 losses), 170(d)(2) (relating to excess charitable
387 contributions), 404(a)(1)(D) (relating to excess pension trust
388 contributions), 404(a)(3)(A) and (B) (to the extent relating to
389 excess stock bonus and profit-sharing trust contributions), and
390 1212 (relating to capital losses) of the Internal Revenue Code,
391 except that, subject to the same limitations, the term:
392 (a) “Taxable income,” in the case of a life insurance
393 company subject to the tax imposed by s. 801 of the Internal
394 Revenue Code, means life insurance company taxable income;
395 however, for purposes of this code, the total of any amounts
396 subject to tax under s. 815(a)(2) of the Internal Revenue Code
397 pursuant to s. 801(c) of the Internal Revenue Code shall not
398 exceed, cumulatively, the total of any amounts determined under
399 s. 815(c)(2) of the Internal Revenue Code of 1954, as amended,
400 from January 1, 1972, to December 31, 1983;
401 (b) “Taxable income,” in the case of an insurance company
402 subject to the tax imposed by s. 831(b) of the Internal Revenue
403 Code, means taxable investment income;
404 (c) “Taxable income,” in the case of an insurance company
405 subject to the tax imposed by s. 831(a) of the Internal Revenue
406 Code, means insurance company taxable income;
407 (d) “Taxable income,” in the case of a regulated investment
408 company subject to the tax imposed by s. 852 of the Internal
409 Revenue Code, means investment company taxable income;
410 (e) “Taxable income,” in the case of a real estate
411 investment trust subject to the tax imposed by s. 857 of the
412 Internal Revenue Code, means the income subject to tax, computed
413 as provided in s. 857 of the Internal Revenue Code;
414 (f) “Taxable income,” in the case of a corporation which is
415 a member of an affiliated group of corporations filing a
416 consolidated income tax return for the taxable year for federal
417 income tax purposes, means taxable income of such corporation
418 for federal income tax purposes as if such corporation had filed
419 a separate federal income tax return for the taxable year and
420 each preceding taxable year for which it was a member of an
421 affiliated group , unless a consolidated return for the taxpayer
422 and others is required or elected under s. 220.131 ;
423 (g) “Taxable income,” in the case of a cooperative
424 corporation or association, means the taxable income of such
425 organization determined in accordance with the provisions of ss.
426 1381-1388 of the Internal Revenue Code;
427 (h) “Taxable income,” in the case of an organization which
428 is exempt from the federal income tax by reason of s. 501(a) of
429 the Internal Revenue Code, means its unrelated business taxable
430 income as determined under s. 512 of the Internal Revenue Code;
431 (i) “Taxable income,” in the case of a corporation for
432 which there is in effect for the taxable year an election under
433 s. 1362(a) of the Internal Revenue Code, means the amounts
434 subject to tax under s. 1374 or s. 1375 of the Internal Revenue
435 Code for each taxable year;
436 (j) “Taxable income,” in the case of a limited liability
437 company, other than a limited liability company classified as a
438 partnership for federal income tax purposes, as defined in and
439 organized pursuant to chapter 605 or qualified to do business in
440 this state as a foreign limited liability company or other than
441 a similar limited liability company classified as a partnership
442 for federal income tax purposes and created as an artificial
443 entity pursuant to the statutes of the United States or any
444 other state, territory, possession, or jurisdiction, if such
445 limited liability company or similar entity is taxable as a
446 corporation for federal income tax purposes, means taxable
447 income determined as if such limited liability company were
448 required to file or had filed a federal corporate income tax
449 return under the Internal Revenue Code;
450 (k) “Taxable income,” in the case of a taxpayer liable for
451 the alternative minimum tax as defined in s. 55 of the Internal
452 Revenue Code, means the alternative minimum taxable income as
453 defined in s. 55(b)(2) of the Internal Revenue Code, less the
454 exemption amount computed under s. 55(d) of the Internal Revenue
455 Code. A taxpayer is not liable for the alternative minimum tax
456 unless the taxpayer’s federal tax return, or related federal
457 consolidated tax return, if included in a consolidated return
458 for federal tax purposes, reflect a liability on the return
459 filed for the alternative minimum tax as defined in s. 55(b)(2)
460 of the Internal Revenue Code;
461 (l) “Taxable income,” in the case of a taxpayer whose
462 taxable income is not otherwise defined in this subsection,
463 means the sum of amounts to which a tax rate specified in s. 11
464 of the Internal Revenue Code plus the amount to which a tax rate
465 specified in s. 1201(a)(2) of the Internal Revenue Code are
466 applied for federal income tax purposes.
467 Section 3. Section 220.131, Florida Statutes, is repealed.
468 Section 4. Section 220.136, Florida Statutes, is created to
469 read:
470 220.136 Determination of the members of a unitary combined
471 group.—A corporation having 50 percent or more of its
472 outstanding voting stock directly or indirectly owned or
473 controlled by a unitary combined group is considered a member of
474 the unitary combined group. A corporation having less than 50
475 percent of its outstanding voting stock directly or indirectly
476 owned or controlled by a unitary combined group is considered a
477 member of the unitary combined group if the business activities
478 of the corporation are of such a nature that the corporation is
479 considered functionally integrated with, and therefore a member
480 of, the unitary combined group. All of the income of a
481 corporation that is a member of a unitary combined group is
482 unitary. For purposes of this section, the attribution rules of
483 26 U.S.C. s. 318 must be used to determine whether voting stock
484 is indirectly owned.
485 Section 5. Section 220.1363, Florida Statutes, is created
486 to read:
487 220.1363 Unitary combined groups; special requirements.—
488 (1) As used in this section, the term “unitary combined
489 reporting method” means a method used to determine the taxable
490 business profits of a group of entities conducting a unitary
491 business. Under this method, the net income of the entities must
492 be added together, along with the additions and subtractions
493 under s. 220.13, and apportioned to this state as a single
494 taxpayer under ss. 220.15 and 220.151. However, each special
495 industry member included in a unitary combined group return
496 which would otherwise be permitted to use a special method of
497 apportionment under s. 220.151 shall convert its single-factor
498 apportionment to a three-factor apportionment of property,
499 payroll, and sales. The special industry member shall calculate
500 the denominator of its property, payroll, and sales factors in
501 the same manner as those denominators are calculated by members
502 that are not special industry members. The numerator of sales,
503 property, and payroll factors is the product of the denominator
504 of each factor multiplied by the premiums or revenue-miles
505 factor ratio otherwise applicable under s. 220.151.
506 (2) All members of a unitary combined group must use the
507 unitary combined reporting method, under which all of the
508 following apply:
509 (a) Adjusted federal income, for purposes of s. 220.12, is
510 the sum of adjusted federal income of all members of the unitary
511 combined group as determined for a concurrent taxable year.
512 (b) The numerators and denominators of the apportionment
513 factors must be calculated for all members of the unitary
514 combined group combined.
515 (c) Intercompany sales transactions between members of the
516 unitary combined group are not included in the numerator or
517 denominator of the sales factor under ss. 220.15 and 220.151,
518 regardless of whether indicia of a sale exist.
519 (d) For sales of intangibles, including, but not limited
520 to, accounts receivable, notes, bonds, and stock, which are made
521 to entities outside the group, only the net proceeds are
522 included in the numerator and denominator of the sales factor.
524 As used in this subsection, the term “sale” includes, but is not
525 limited to, loans, payments for the use of intangibles,
526 dividends, and management fees.
527 (3)(a) If a parent corporation is a member of the unitary
528 combined group and has nexus with this state, a single unitary
529 combined group return must be filed in the name and under the
530 federal employer identification number of the parent
531 corporation. If the unitary combined group does not have a
532 parent corporation, if the parent corporation is not a member of
533 the unitary combined group, or if the parent corporation does
534 not have nexus with this state, the members of the unitary
535 combined group must choose a member subject to the tax imposed
536 by this chapter to file the return. The members of the unitary
537 combined group may not choose another member to file a corporate
538 income tax return in subsequent years unless the filing member
539 does not maintain nexus with this state or does not remain a
540 member of the unitary combined group. The return must be signed
541 by an authorized officer of the filing member as the agent for
542 the unitary combined group.
543 (b) If members of a unitary combined group have different
544 taxable years, the taxable year of a majority of the members of
545 the unitary combined group is the taxable year of the unitary
546 combined group. If the taxable years of a majority of the
547 members of a unitary combined group do not correspond, the
548 taxable year of the member that files the return for the unitary
549 combined group is the taxable year of the unitary combined
550 group.
551 (c)1. A member of a unitary combined group having a taxable
552 year that does not correspond to the taxable year of the unitary
553 combined group shall determine its income for inclusion on the
554 tax return of the unitary combined group using all of the
555 following:
556 a. The precise amount of taxable income received during the
557 months corresponding to the taxable year of the unitary combined
558 group, if the precise amount can be readily determined from the
559 member’s books and records.
560 b. The taxable income of the member converted to conform to
561 the taxable year of the unitary combined group on the basis of
562 the number of months falling within the taxable year of the
563 unitary combined group. For example, if the taxable year of the
564 unitary combined group is a calendar year and a member operates
565 on a fiscal year ending on April 30, the income of the member
566 must include 8/12 of the income from the current taxable year
567 and 4/12 of the income from the preceding taxable year. This
568 method to determine the income of a member may be used only if
569 the return can be timely filed after the end of the taxable year
570 of the unitary combined group.
571 c. The taxable income of the member during its taxable year
572 that ends within the taxable year of the unitary combined group.
573 2. The method of determining the income of a member of a
574 unitary combined group whose taxable year does not correspond to
575 the taxable year of the unitary combined group may not change as
576 long as the member remains a member of the unitary combined
577 group. The apportionment factors for the member must be applied
578 to the income of the member for the taxable year of the unitary
579 combined group.
580 (4)(a) A unitary combined group return must include a
581 computational schedule that does all of the following:
582 1. Combines the adjusted federal income of all members of
583 the unitary combined group;
584 2. Shows all intercompany eliminations;
585 3. Shows Florida additions and subtractions under s.
586 220.13; and
587 4. Shows the calculation of the combined apportionment
588 factors.
589 (b) In addition to its return, a unitary combined group
590 shall also file a domestic disclosure spreadsheet. The
591 spreadsheet must fully disclose all of the following:
592 1. The income reported to each state in which the group
593 operates;
594 2. The combined state tax liability;
595 3. The method used for apportioning or allocating income to
596 each state in which the group operates; and
597 4. Other information required by department rule in order
598 to determine the proper amount of tax due to each state and to
599 identify the unitary combined group.
600 (5) The executive director of the department may take any
601 of the following actions if he or she believes such action is
602 necessary to prevent substantial tax avoidance by the unitary
603 combined group:
604 (a) Add the income or apportionment factors of a related
605 entity to the unitary combined group return if the related
606 entity is not subject to corporate income tax.
607 (b) Adjust the income or apportionment factor of a member
608 of the unitary combined group if such member is subject to
609 industry-specific apportionment rules.
610 (6) The department may adopt rules and forms to administer
611 this section. The Legislature intends to grant the department
612 extensive authority to adopt rules and forms describing and
613 defining principles for determining the existence of a unitary
614 combined group, definitions of common control, methods of
615 reporting, and related forms, principles, and other definitions.
616 Section 6. Subsections (2), (3), and (4) of section 220.14,
617 Florida Statutes, are amended to read:
618 220.14 Exemption.—
619 (2) In the case of a taxable year for a period of less than
620 12 months, the exemption allowed by this section must shall be
621 prorated on the basis of the number of days in such year to 365
622 days, or, in a leap year, 366 days .
623 (3) Only one exemption is shall be allowed to taxpayers
624 filing a unitary combined group consolidated return under this
625 code.
626 (4) Notwithstanding any other provision of this code, not
627 more than one exemption under this section may be allowed to the
628 Florida members of a controlled group of corporations, as
629 defined in s. 1563 of the Internal Revenue Code with respect to
630 taxable years ending on or after December 31, 1970, filing
631 separate returns under this code. The exemption described in
632 this section must shall be divided equally among such Florida
633 members of the group , unless all of such members consent, at
634 such time and in such manner as the department shall by
635 regulation prescribe, to an apportionment plan providing for an
636 unequal allocation of such exemption.
637 Section 7. Paragraphs (b) and (c) of subsection (5) of
638 section 220.15, Florida Statutes, are amended to read:
639 220.15 Apportionment of adjusted federal income.—
640 (5) The sales factor is a fraction the numerator of which
641 is the total sales of the taxpayer in this state during the
642 taxable year or period and the denominator of which is the total
643 sales of the taxpayer everywhere during the taxable year or
644 period.
645 (b)1. Sales of tangible personal property occur in this
646 state if :
647 a. The property is delivered or shipped to a purchaser ,
648 other than the United States Government, within this state,
649 regardless of the f.o.b. point, other conditions of the sale, or
650 ultimate destination of the property, unless shipment is made
651 via a common or contract carrier ; or
652 b. The property is shipped from an office, a store, a
653 warehouse, a factory, or other place of storage in this state,
654 and the purchaser is the United States Government or the
655 taxpayer is not taxable in the purchaser’s state .
657 However, for industries in NAICS National Number 311411, if the
658 ultimate destination of the product is to a location outside
659 this state, regardless of the method of shipment or f.o.b.
660 point, the sale shall not be deemed to occur in this state. As
661 used in this paragraph, “NAICS” means those classifications
662 contained in the North American Industry Classification System,
663 as published in 2007 by the Office of Management and Budget,
664 Executive Office of the President.
665 2. When citrus fruit is delivered by a cooperative for a
666 grower-member, by a grower-member to a cooperative, or by a
667 grower-participant to a Florida processor, the sales factor for
668 the growers for such citrus fruit delivered to such processor
669 shall be the same as the sales factor for the most recent
670 taxable year of that processor. That sales factor, expressed
671 only as a percentage and not in terms of the dollar volume of
672 sales, so as to protect the confidentiality of the sales of the
673 processor, shall be furnished on the request of such a grower
674 promptly after it has been determined for that taxable year.
675 3. Reimbursement of expenses under an agency contract
676 between a cooperative, a grower-member of a cooperative, or a
677 grower and a processor is not a sale within this state.
678 (c) Sales of a financial organization, including, but not
679 limited to, banking and savings institutions, investment
680 companies, real estate investment trusts, and brokerage
681 companies, occur in this state if derived from:
682 1. Fees, commissions, or other compensation for financial
683 services rendered within this state;
684 2. Gross profits from trading in stocks, bonds, or other
685 securities managed within this state;
686 3. Interest received within this state, other than interest
687 from loans secured by mortgages, deeds of trust, or other liens
688 upon real or tangible personal property located without this
689 state, and dividends received within this state;
690 4. Interest charged to customers at places of business
691 maintained within this state for carrying debit balances of
692 margin accounts, without deduction of any costs incurred in
693 carrying such accounts;
694 5. Interest, fees, commissions, or other charges or gains
695 from loans secured by mortgages, deeds of trust, or other liens
696 upon real or tangible personal property located in this state or
697 from installment sale agreements originally executed by a
698 taxpayer or the taxpayer’s agent to sell real or tangible
699 personal property located in this state;
700 6. Rents from real or tangible personal property located in
701 this state; or
702 7. Any other gross income, including other interest,
703 resulting from the operation as a financial organization within
704 this state.
706 In computing the amounts under this paragraph, any amount
707 received by a member of an affiliated group (determined under s.
708 1504(a) of the Internal Revenue Code, but without reference to
709 whether any such corporation is an “includable corporation”
710 under s. 1504(b) of the Internal Revenue Code) from another
711 member of such group shall be included only to the extent such
712 amount exceeds expenses of the recipient directly related
713 thereto.
714 Section 8. Paragraph (f) of subsection (1) of section
715 220.183, Florida Statutes, is amended to read:
716 220.183 Community contribution tax credit.—
717 (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
718 CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
719 SPENDING.—
720 (f) A taxpayer who files a Florida consolidated return as a
721 member of an affiliated group pursuant to s. 220.131(1) may be
722 allowed the credit on a consolidated return basis.
723 Section 9. Paragraphs (b), (c), and (d) of subsection (2)
724 of section 220.1845, Florida Statutes, are amended to read:
725 220.1845 Contaminated site rehabilitation tax credit.—
726 (2) AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.—
727 (b) A tax credit applicant, or multiple tax credit
728 applicants working jointly to clean up a single site, may not be
729 granted more than $500,000 per year in tax credits for each site
730 voluntarily rehabilitated. Multiple tax credit applicants shall
731 be granted tax credits in the same proportion as their
732 contribution to payment of cleanup costs. Subject to the same
733 conditions and limitations as provided in this section, a
734 municipality, county, or other tax credit applicant which
735 voluntarily rehabilitates a site may receive not more than
736 $500,000 per year in tax credits which it can subsequently
737 transfer subject to the provisions in paragraph (f) (g) .
738 (c) If the credit granted under this section is not fully
739 used in any one year because of insufficient tax liability on
740 the part of the corporation, the unused amount may be carried
741 forward for up to 5 years. The carryover credit may be used in a
742 subsequent year if the tax imposed by this chapter for that year
743 exceeds the credit for which the corporation is eligible in that
744 year after applying the other credits and unused carryovers in
745 the order provided by s. 220.02(8). If during the 5-year period
746 the credit is transferred, in whole or in part, pursuant to
747 paragraph (f) (g) , each transferee has 5 years after the date of
748 transfer to use its credit.
749 (d) A taxpayer that files a consolidated return in this
750 state as a member of an affiliated group under s. 220.131(1) may
751 be allowed the credit on a consolidated return basis up to the
752 amount of tax imposed upon the consolidated group.
753 Section 10. Subsection (2) of section 220.1875, Florida
754 Statutes, is amended to read:
755 220.1875 Credit for contributions to eligible nonprofit
756 scholarship-funding organizations.—
757 (2) A taxpayer who files a Florida consolidated return as a
758 member of an affiliated group pursuant to s. 220.131(1) may be
759 allowed the credit on a consolidated return basis; however, the
760 total credit taken by the affiliated group is subject to the
761 limitation established under subsection (1).
762 Section 11. Subsection (2) of section 220.1876, Florida
763 Statutes, is amended to read:
764 220.1876 Credit for contributions to the New Worlds Reading
765 Initiative.—
766 (2) A taxpayer who files a Florida consolidated return as a
767 member of an affiliated group pursuant to s. 220.131(1) may be
768 allowed the credit on a consolidated return basis; however, the
769 total credit taken by the affiliated group is subject to the
770 limitation established under subsection (1).
771 Section 12. Subsection (2) of section 220.1877, Florida
772 Statutes, is amended to read:
773 220.1877 Credit for contributions to eligible charitable
774 organizations.—
775 (2) A taxpayer who files a Florida consolidated return as a
776 member of an affiliated group pursuant to s. 220.131(1) may be
777 allowed the credit on a consolidated return basis; however, the
778 total credit taken by the affiliated group is subject to the
779 limitation established under subsection (1).
780 Section 13. Subsection (2) of section 220.18775, Florida
781 Statutes, is amended to read:
782 220.18775 Credit for contributions to eligible charitable
783 organizations for the Home Away From Home Tax Credit.—
784 (2) A taxpayer who files a Florida consolidated return as a
785 member of an affiliated group pursuant to s. 220.131(1) may be
786 allowed the credit on a consolidated return basis; however, the
787 total credit taken by the affiliated group is subject to the
788 limitation established under subsection (1).
789 Section 14. Subsection (2) of section 220.1878, Florida
790 Statutes, is amended to read:
791 220.1878 Credit for contributions to the Live Local
792 Program.—
793 (2) A taxpayer who files a Florida consolidated return as a
794 member of an affiliated group pursuant to s. 220.131(1) may be
795 allowed the credit on a consolidated return basis; however, the
796 total credit taken by the affiliated group is subject to the
797 limitation established under subsection (1).
798 Section 15. Subsection (2) of section 220.19, Florida
799 Statutes, is amended to read:
800 220.19 Child care tax credits.—
801 (2) A taxpayer that files a consolidated return in this
802 state as a member of an affiliated group under s. 220.131(1) may
803 be allowed the credit on a consolidated return basis; however,
804 the total credit taken by the affiliated group is subject to the
805 limitation established under s. 402.261(2)(d).
806 Section 16. Paragraphs (a) and (c) of subsection (3) of
807 section 220.191, Florida Statutes, are amended to read:
808 220.191 Capital investment tax credit.—
809 (3)(a) Notwithstanding subsection (2), an annual credit
810 against the tax imposed by this chapter shall be granted to a
811 qualifying business which establishes a qualifying project
812 pursuant to subparagraph (1)(h)3., in an amount equal to the
813 lesser of $15 million or 5 percent of the eligible capital costs
814 made in connection with a qualifying project, for a period not
815 to exceed 20 years beginning with the commencement of operations
816 of the project. The tax credit shall be granted against the
817 corporate income tax liability of the qualifying business and as
818 further provided in paragraph (c) . The total tax credit provided
819 pursuant to this subsection shall be equal to no more than 100
820 percent of the eligible capital costs of the qualifying project.
821 (c) The credit granted under this subsection may be used in
822 whole or in part by the qualifying business or any corporation
823 that is either a member of that qualifying business’s affiliated
824 group of corporations, is a related entity taxable as a
825 cooperative under subchapter T of the Internal Revenue Code, or,
826 if the qualifying business is an entity taxable as a cooperative
827 under subchapter T of the Internal Revenue Code, is related to
828 the qualifying business. Any entity related to the qualifying
829 business may continue to file as a member of a Florida-nexus
830 consolidated group pursuant to a prior election made under s.
831 220.131(1), Florida Statutes (1985), even if the parent of the
832 group changes due to a direct or indirect acquisition of the
833 former common parent of the group. Any credit can be used by any
834 of the affiliated companies or related entities referenced in
835 this paragraph to the same extent as it could have been used by
836 the qualifying business. However, any such use shall not operate
837 to increase the amount of the credit or extend the period within
838 which the credit must be used .
839 Section 17. Paragraph (a) of subsection (4) of section
840 220.1991, Florida Statutes, is amended to read:
841 220.1991 Credit for manufacturing of human breast milk
842 derived human milk fortifiers.—
843 (4) (a) A taxpayer who files a Florida consolidated return
844 as a member of an affiliated group pursuant to s. 220.131(1) may
845 be allowed the credit on a consolidated return basis.
846 Section 18. Section 220.51, Florida Statutes, is amended to
847 read:
848 220.51 Adoption Promulgation of rules and regulations.—In
849 accordance with the Administrative Procedure Act, chapter 120,
850 the department is authorized to make, adopt promulgate , and
851 enforce such reasonable rules and regulations, and to prescribe
852 such forms relating to the administration and enforcement of the
853 provisions of this code, as it may deem appropriate, including:
854 (1) Rules for initial implementation of this code and for
855 taxpayers’ transitional taxable years commencing before and
856 ending after January 1, 1972; and
857 (2) Rules or regulations to clarify whether certain groups,
858 organizations, or associations formed under the laws of this
859 state or any other state, country, or jurisdiction shall be
860 deemed “taxpayers” for the purposes of this code, in accordance
861 with the legislative declarations of intent in s. 220.02 ; and
862 (3) Regulations relating to consolidated reporting for
863 affiliated groups of corporations, in order to provide for an
864 equitable and just administration of this code with respect to
865 multicorporate taxpayers .
866 Section 19. Section 220.64, Florida Statutes, is amended to
867 read:
868 220.64 Other provisions applicable to franchise tax.—To the
869 extent that they are not manifestly incompatible with the
870 provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
871 X of this code and ss. 220.12, 220.13, 220.136, 220.1363,
872 220.15, and 220.16 apply to the franchise tax imposed by this
873 part. Under rules prescribed by the department in s. 220.131 , a
874 consolidated return may be filed by any affiliated group of
875 corporations composed of one or more banks or savings
876 associations, its or their Florida parent corporations
877 corporation , and any nonbank or nonsavings subsidiaries of such
878 parent corporations corporation .
879 Section 20. Subsections (9) and (10) of section 376.30781,
880 Florida Statutes, are amended to read:
881 376.30781 Tax credits for rehabilitation of drycleaning
882 solvent-contaminated sites and brownfield sites in designated
883 brownfield areas; application process; rulemaking authority;
884 revocation authority.—
885 (9) On or before June 1, the Department of Environmental
886 Protection shall inform each tax credit applicant subject to the
887 January 31 annual application deadline of the applicant’s
888 eligibility status and the amount of any tax credit due. The
889 department shall provide each eligible tax credit applicant with
890 a tax credit certificate that must be submitted with its tax
891 return to the Department of Revenue to claim the tax credit or
892 be transferred pursuant to s. 220.1845(2)(f) s. 220.1845(2)(g) .
893 The June 1 deadline for annual site rehabilitation tax credit
894 certificate awards does not apply to any tax credit application
895 for which the department has issued a notice of deficiency
896 pursuant to subsection (8). The department shall respond within
897 120 days after receiving a response from the tax credit
898 applicant to such a notice of deficiency. Credits may not result
899 in the payment of refunds if total credits exceed the amount of
900 tax owed.
901 (10) For solid waste removal, new health care facility or
902 health care provider, and affordable housing tax credit
903 applications, the Department of Environmental Protection shall
904 inform the applicant of the department’s determination within 90
905 days after the application is deemed complete. Each eligible tax
906 credit applicant shall be informed of the amount of its tax
907 credit and provided with a tax credit certificate that must be
908 submitted with its tax return to the Department of Revenue to
909 claim the tax credit or be transferred pursuant to s.
910 220.1845(2)(f) s. 220.1845(2)(g) . Credits may not result in the
911 payment of refunds if total credits exceed the amount of tax
912 owed.
913 Section 21. Transitional rules.—
914 (1) For the first taxable year beginning on or after
915 January 1, 2027, a taxpayer that filed a Florida corporate
916 income tax return in the preceding taxable year and that is a
917 member of a unitary combined group shall compute its income
918 together with all members of its unitary combined group and file
919 a combined Florida corporate income tax return with all members
920 of its unitary combined group.
921 (2) An affiliated group of corporations which filed a
922 Florida consolidated corporate income tax return pursuant to an
923 election provided in former s. 220.131, Florida Statutes, shall
924 cease filing a Florida consolidated return for taxable years
925 beginning on or after January 1, 2027, and shall file a combined
926 Florida corporate income tax return with all members of its
927 unitary combined group.
928 (3) An affiliated group of corporations which filed a
929 Florida consolidated corporate income tax return pursuant to the
930 election in former s. 220.131(1), Florida Statutes (1985), which
931 allowed the affiliated group to make an election within 90 days
932 after December 20, 1984, or upon filing the taxpayer’s first
933 return after December 20, 1984, whichever was later, shall cease
934 filing a Florida consolidated corporate income tax return using
935 that method for taxable years beginning on or after January 1,
936 2027, and shall file a combined Florida corporate income tax
937 return with all members of its unitary combined group.
938 (4) A taxpayer that is not a member of a unitary combined
939 group remains subject to chapter 220, Florida Statutes, and
940 shall file a separate Florida corporate income tax return as
941 previously required.
942 (5) For taxable years beginning on or after January 1,
943 2027, a tax return for a member of a unitary combined group must
944 be a combined Florida corporate income tax return that includes
945 tax information for all members of the unitary combined group.
946 The tax return must be filed by a member that has nexus with
947 this state.
948 Section 22. Any additional revenue received as a result of
949 the enactment of this act must be deposited into the General
950 Revenue Fund.
951 Section 23. This act shall take effect July 1, 2026.