Florida Senate - 2022 CS for SB 1090 By the Committee on Finance and Tax; and Senator Gruters 593-02694-22 20221090c1 1 A bill to be entitled 2 An act relating to the corporate income tax; amending 3 s. 220.03, F.S.; adopting the 2022 version of the 4 Internal Revenue Code for purposes of the state 5 corporate income tax code; providing for retroactive 6 operation; amending s. 220.13, F.S.; providing 7 applicability for adjustments taxpayers must make to 8 adjusted federal income with respect to bonus 9 depreciation; revising the adjustments taxpayers must 10 make to adjusted federal income with respect to 11 business interest; providing effective dates. 12 13 Be It Enacted by the Legislature of the State of Florida: 14 15 Section 1.Effective upon becoming a law and operating 16 retroactively to January 1, 2022, paragraph (n) of subsection 17 (1) and paragraph (c) of subsection (2) of section 220.03, 18 Florida Statutes, are amended to read: 19 220.03Definitions. 20 (1)SPECIFIC TERMS.When used in this code, and when not 21 otherwise distinctly expressed or manifestly incompatible with 22 the intent thereof, the following terms shall have the following 23 meanings: 24 (n)Internal Revenue Code means the United States 25 Internal Revenue Code of 1986, as amended and in effect on 26 January 1, 2022 2021, except as provided in subsection (3). 27 (2)DEFINITIONAL RULES.When used in this code and neither 28 otherwise distinctly expressed nor manifestly incompatible with 29 the intent thereof: 30 (c)Any term used in this code has the same meaning as when 31 used in a comparable context in the Internal Revenue Code and 32 other statutes of the United States relating to federal income 33 taxes, as such code and statutes are in effect on January 1, 34 2022 2021. However, if subsection (3) is implemented, the 35 meaning of a term shall be taken at the time the term is applied 36 under this code. 37 Section 2.Effective January 1, 2023, paragraph (e) of 38 subsection (1) of section 220.13, Florida Statutes, is amended 39 to read: 40 220.13Adjusted federal income defined. 41 (1)The term adjusted federal income means an amount 42 equal to the taxpayers taxable income as defined in subsection 43 (2), or such taxable income of more than one taxpayer as 44 provided in s. 220.131, for the taxable year, adjusted as 45 follows: 46 (e)Adjustments related to federal acts.Taxpayers shall be 47 required to make the adjustments prescribed in this paragraph 48 for Florida tax purposes with respect to certain tax benefits 49 received pursuant to the Economic Stimulus Act of 2008; the 50 American Recovery and Reinvestment Act of 2009; the Small 51 Business Jobs Act of 2010; the Tax Relief, Unemployment 52 Insurance Reauthorization, and Job Creation Act of 2010; the 53 American Taxpayer Relief Act of 2012; the Tax Increase 54 Prevention Act of 2014; the Consolidated Appropriations Act, 55 2016; the Tax Cuts and Jobs Act of 2017; and the Coronavirus 56 Aid, Relief, and Economic Security Act of 2020. 57 1.a.There shall be added to such taxable income an amount 58 equal to 100 percent of any amount deducted for federal income 59 tax purposes as bonus depreciation for the taxable year pursuant 60 to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as 61 amended by s. 103 of Pub. L. No. 110-185; s. 1201 of Pub. L. No. 62 111-5; s. 2022 of Pub. L. No. 111-240; s. 401 of Pub. L. No. 63 111-312; s. 331 of Pub. L. No. 112-240; s. 125 of Pub. L. No. 64 113-295; s. 143 of Division Q of Pub. L. No. 114-113; and s. 65 13201 of Pub. L. No. 115-97, for property placed in service 66 after December 31, 2007, and before January 1, 2027. 67 b.For the taxable year and for each of the 6 subsequent 68 taxable years, there shall be subtracted from such taxable 69 income an amount equal to one-seventh of the amount by which 70 taxable income was increased pursuant to this subparagraph, 71 notwithstanding any sale or other disposition of the property 72 that is the subject of the adjustments and regardless of whether 73 such property remains in service in the hands of the taxpayer. 74 c.The provisions of Sub-subparagraph b. does do not apply 75 to amounts by which taxable income was increased pursuant to 76 this subparagraph for amounts deducted for federal income tax 77 purposes as bonus depreciation for qualified improvement 78 property as defined in s. 168(e)(6) of the Internal Revenue Code 79 of 1986, as amended by s. 13204 of Pub. L. No. 115-97. 80 81 This subparagraph does not apply to property placed in service 82 in taxable years beginning on or after January 1, 2023. 83 2.There shall be added to such taxable income an amount 84 equal to 100 percent of any amount in excess of $128,000 85 deducted for federal income tax purposes for the taxable year 86 pursuant to s. 179 of the Internal Revenue Code of 1986, as 87 amended by s. 102 of Pub. L. No. 110-185; s. 1202 of Pub. L. No. 88 111-5; s. 2021 of Pub. L. No. 111-240; s. 402 of Pub. L. No. 89 111-312; s. 315 of Pub. L. No. 112-240; and s. 127 of Pub. L. 90 No. 113-295, for taxable years beginning after December 31, 91 2007, and before January 1, 2015. For the taxable year and for 92 each of the 6 subsequent taxable years, there shall be 93 subtracted from such taxable income one-seventh of the amount by 94 which taxable income was increased pursuant to this 95 subparagraph, notwithstanding any sale or other disposition of 96 the property that is the subject of the adjustments and 97 regardless of whether such property remains in service in the 98 hands of the taxpayer. 99 3.There shall be added to such taxable income an amount 100 equal to the amount of deferred income not included in such 101 taxable income pursuant to s. 108(i)(1) of the Internal Revenue 102 Code of 1986, as amended by s. 1231 of Pub. L. No. 111-5. There 103 shall be subtracted from such taxable income an amount equal to 104 the amount of deferred income included in such taxable income 105 pursuant to s. 108(i)(1) of the Internal Revenue Code of 1986, 106 as amended by s. 1231 of Pub. L. No. 111-5. 107 4.For taxable years beginning on or after January 1, 2023, 108 there shall be added to such taxable income an amount equal to 109 the amount of business interest taken as a deduction for federal 110 tax purposes subject to the limitation provided in s. 163(j) of 111 the Internal Revenue Code. There shall be subtracted from such 112 taxable income the amount of business interest paid or accrued 113 within the taxable year which would have been deductible at the 114 federal level consistent with s. 163 of the Internal Revenue 115 Code as it existed and applied immediately before the enactment 116 of the Tax Cuts and Jobs Act of 2017, Pub. L. No. 115-97 For 117 taxable years beginning after December 31, 2018, and before 118 January 1, 2021, there shall be added to such taxable income an 119 amount equal to the excess, if any, of: 120 a.One hundred percent of any amount deducted for federal 121 income tax purposes as business interest expense for the taxable 122 year pursuant to s. 163(j) of the Internal Revenue Code of 1986, 123 as amended by s. 2306 of Pub. L. No. 116-136; over 124 b.One hundred percent of the amount that would be 125 deductible for federal income tax purposes as business interest 126 expense for the taxable year if calculated pursuant to s. 163(j) 127 of the Internal Revenue Code of 1986, as amended by s. 13301 of 128 Pub. L. No. 115-97. 129 130 Any expense added back pursuant to this subparagraph shall be 131 treated as a disallowed business expense carryforward from prior 132 years for the year or years following the addition, until such 133 time as the expense has been used. 134 5.With respect to qualified improvement property as 135 defined in s. 168(e)(6) of the Internal Revenue Code of 1986, as 136 amended by s. 13204 of Pub. L. No. 115-97, that was placed in 137 service on or after January 1, 2018: 138 a.There shall be added to such taxable income an amount 139 equal to 100 percent of any amount deducted for federal income 140 tax purposes under s. 167(a) of the Internal Revenue Code of 141 1986. There shall be subtracted an amount equal to the amount of 142 depreciation that would have been deductible pursuant to s. 143 167(a) of the Internal Revenue Code of 1986 in effect on January 144 1, 2020, and without regard to s. 2307 of Pub. L. No. 116-136, 145 notwithstanding any sale or other disposition of the property 146 that is the subject of the adjustments and regardless of whether 147 such property remains in service in the hands of the taxpayer. 148 b.The department may adopt rules necessary to administer 149 the provisions of this subparagraph, including rules, forms, and 150 guidelines for computing depreciation on qualified improvement 151 property, as defined in s. 168(e)(6) of the Internal Revenue 152 Code of 1986. 153 6.For taxable years beginning after December 31, 2020, and 154 before January 1, 2026, the changes made to the Internal Revenue 155 Code by Pub. L. No. 116-260, Division EE, Title I, s. 116 and 156 Title II, s. 210 shall not apply to this chapter. Taxable income 157 under this section shall be calculated as though changes made by 158 those sections were not made to the Internal Revenue Code. The 159 Department of Revenue may adopt rules necessary to administer 160 the provisions of this subparagraph, including rules, forms, and 161 guidelines for treatment of expenses and depreciation related to 162 these changes. 163 7.Subtractions available under this paragraph may be 164 transferred to the surviving or acquiring entity following a 165 merger or acquisition and used in the same manner and with the 166 same limitations as specified by this paragraph. 167 8.The additions and subtractions specified in this 168 paragraph are intended to adjust taxable income for Florida tax 169 purposes, and, notwithstanding any other provision of this code, 170 such additions and subtractions shall be permitted to change a 171 taxpayers net operating loss for Florida tax purposes. 172 Section 3.Except as otherwise expressly provided in this 173 act, this act shall take effect upon becoming a law.