Bill Text: FL S1692 | 2019 | Regular Session | Introduced


Bill Title: Corporate Income Tax

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2019-03-26 - Laid on Table [S1692 Detail]

Download: Florida-2019-S1692-Introduced.html
       Florida Senate - 2019                                    SB 1692
       
       
        
       By Senator Rodriguez
       
       
       
       
       
       37-00912B-19                                          20191692__
    1                        A bill to be entitled                      
    2         An act relating to the corporate income tax; amending
    3         s. 220.03, F.S.; revising the definition of the term
    4         “taxpayer”; defining terms; amending s. 220.13, F.S.;
    5         revising the definition of the term “adjusted federal
    6         income” to prohibit specified deductions, to limit
    7         certain carryovers, and to require subtractions of
    8         certain dividends paid and received within a water’s
    9         edge group for the purpose of determining subtractions
   10         from taxable income; conforming provisions to changes
   11         made by the act; repealing s. 220.131, F.S., relating
   12         to the adjusted federal income of affiliated groups;
   13         creating s. 220.136, F.S.; specifying circumstances
   14         under which a corporation is presumed to be, deemed to
   15         be, or deemed not to be a member of a water’s edge
   16         group; providing construction; defining the term
   17         “United States”; creating s. 220.1363, F.S.; defining
   18         the term “water’s edge reporting method”; specifying
   19         requirements for, limitations on, and prohibitions in
   20         calculating and reporting income in a water’s edge
   21         group return; requiring all members of a water’s edge
   22         group to use the water’s edge reporting method;
   23         defining the term “sale”; specifying requirements for
   24         designating the filing member and the taxable year of
   25         the water’s edge group; specifying income reporting
   26         requirements for certain members of the water’s edge
   27         group; requiring that a water’s edge group return
   28         include a specified computational schedule and
   29         domestic disclosure spreadsheet; authorizing the
   30         Department of Revenue to adopt rules; providing
   31         legislative intent regarding the adoption of rules;
   32         amending s. 220.14, F.S.; revising the calculation for
   33         prorating a certain corporate income tax exemption to
   34         reflect leap years; conforming a provision to changes
   35         made by the act; amending ss. 220.15, 220.183,
   36         220.1845, 220.1875, 220.191, 220.192, 220.193, and
   37         220.51, F.S.; conforming provisions to changes made by
   38         the act; amending s. 220.64, F.S.; providing
   39         applicability of water’s edge group provisions to the
   40         franchise tax; conforming provisions to changes made
   41         by the act; amending ss. 288.1254 and 376.30781, F.S.;
   42         conforming provisions to changes made by the act;
   43         specifying, beginning on a specified date,
   44         requirements for corporate tax return filings for
   45         certain taxpayers; requiring that recaptured funds be
   46         appropriated for a certain purpose; providing an
   47         effective date.
   48  
   49         WHEREAS, the Legislature finds that the separate accounting
   50  system used to measure the income of multistate and
   51  multinational corporations for tax purposes often places Florida
   52  corporations at a competitive disadvantage and, moreover, that
   53  corporate business is increasingly conducted through groups of
   54  commonly owned corporations, and
   55         WHEREAS, the Legislature intends to more accurately measure
   56  the business activities of corporations by adopting a combined
   57  system of income tax reporting, NOW, THEREFORE,
   58  
   59  Be It Enacted by the Legislature of the State of Florida:
   60  
   61         Section 1. Paragraph (z) of subsection (1) of section
   62  220.03, Florida Statutes, is amended, and paragraphs (gg), (hh),
   63  and (ii) are added to that subsection, to read:
   64         220.03 Definitions.—
   65         (1) SPECIFIC TERMS.—When used in this code, and when not
   66  otherwise distinctly expressed or manifestly incompatible with
   67  the intent thereof, the following terms shall have the following
   68  meanings:
   69         (z) “Taxpayer” means any corporation subject to the tax
   70  imposed by this code, and includes all corporations that are
   71  members of a water’s edge group for which a consolidated return
   72  is filed under s. 220.131. However, the term “taxpayer” does not
   73  include a corporation having no individuals, (including
   74  individuals employed by an affiliate,) receiving compensation in
   75  this state as defined in s. 220.15 when the only property owned
   76  or leased by the said corporation, (including an affiliate,) in
   77  this state is located at the premises of a printer with which it
   78  has contracted for printing, if such property consists of the
   79  final printed product, property which becomes a part of the
   80  final printed product, or property from which the printed
   81  product is produced.
   82         (gg)“Tax haven” means a jurisdiction to which any of the
   83  following apply for a particular taxable year:
   84         1. It is identified by the Organization for Economic Co
   85  operation and Development as a tax haven or as having harmful
   86  tax practices or a preferential tax regime.
   87         2.It is a jurisdiction that does not impose any, or
   88  imposes only a nominal, effective tax on relevant income.
   89         3.It has laws or practices that prevent the effective
   90  exchange of information with other governments for tax purposes,
   91  regarding taxpayers who are subject to, or are benefiting from,
   92  the tax regime.
   93         4.It lacks transparency. For purposes of this
   94  subparagraph, a tax regime lacks transparency if the details of
   95  legislative, legal, or administrative requirements are not open
   96  to public scrutiny and apparent or are not consistently applied
   97  among similarly situated taxpayers.
   98         5.It facilitates the establishment of foreign-owned
   99  entities without the need for a local substantive presence or
  100  prohibits the entities from having any commercial impact on the
  101  local economy.
  102         6.It explicitly or implicitly excludes the jurisdiction’s
  103  resident taxpayers from taking advantage of the tax regime’s
  104  benefits or prohibits enterprises that benefit from the regime
  105  from operating in the jurisdiction’s domestic market.
  106         7.It has created a tax regime that is favorable for tax
  107  avoidance based on an overall assessment of relevant factors,
  108  including whether the jurisdiction has a significant untaxed
  109  offshore financial or other services sector relative to its
  110  overall economy.
  111         (hh)Tax regime” means a set or system of rules, laws,
  112  regulations, or practices by which taxes are imposed on any
  113  person, corporation, or entity or on any income, property,
  114  incident, indicia, or activity pursuant to government authority.
  115         (ii)“Water’s edge group” means a group of corporations
  116  related through common ownership whose business activities are
  117  integrated with, dependent upon, or contribute to a flow of
  118  value among members of the group.
  119         Section 2. Section 220.13, Florida Statutes, is amended to
  120  read:
  121         220.13 “Adjusted federal income” defined.—
  122         (1) The term “adjusted federal income” means an amount
  123  equal to the taxpayer’s taxable income as defined in subsection
  124  (2), or such taxable income of a water’s edge group more than
  125  one taxpayer as provided in s. 220.1363 s. 220.131, for the
  126  taxable year, adjusted as follows:
  127         (a) Additions.—There shall be added to such taxable income:
  128         1.a. The amount of any tax upon or measured by income,
  129  excluding taxes based on gross receipts or revenues, paid or
  130  accrued as a liability to the District of Columbia or any state
  131  of the United States which is deductible from gross income in
  132  the computation of taxable income for the taxable year.
  133         b. Notwithstanding sub-subparagraph a., if a credit taken
  134  under s. 220.1875 is added to taxable income in a previous
  135  taxable year under subparagraph 11. and is taken as a deduction
  136  for federal tax purposes in the current taxable year, the amount
  137  of the deduction allowed shall not be added to taxable income in
  138  the current year. The exception in this sub-subparagraph is
  139  intended to ensure that the credit under s. 220.1875 is added in
  140  the applicable taxable year and does not result in a duplicate
  141  addition in a subsequent year.
  142         2. The amount of interest which is excluded from taxable
  143  income under s. 103(a) of the Internal Revenue Code or any other
  144  federal law, less the associated expenses disallowed in the
  145  computation of taxable income under s. 265 of the Internal
  146  Revenue Code or any other law, excluding 60 percent of any
  147  amounts included in alternative minimum taxable income, as
  148  defined in s. 55(b)(2) of the Internal Revenue Code, if the
  149  taxpayer pays tax under s. 220.11(3).
  150         3. In the case of a regulated investment company or real
  151  estate investment trust, an amount equal to the excess of the
  152  net long-term capital gain for the taxable year over the amount
  153  of the capital gain dividends attributable to the taxable year.
  154         4. That portion of the wages or salaries paid or incurred
  155  for the taxable year which is equal to the amount of the credit
  156  allowable for the taxable year under s. 220.181. This
  157  subparagraph shall expire on the date specified in s. 290.016
  158  for the expiration of the Florida Enterprise Zone Act.
  159         5. That portion of the ad valorem school taxes paid or
  160  incurred for the taxable year which is equal to the amount of
  161  the credit allowable for the taxable year under s. 220.182. This
  162  subparagraph shall expire on the date specified in s. 290.016
  163  for the expiration of the Florida Enterprise Zone Act.
  164         6. The amount taken as a credit under s. 220.195 which is
  165  deductible from gross income in the computation of taxable
  166  income for the taxable year.
  167         7. That portion of assessments to fund a guaranty
  168  association incurred for the taxable year which is equal to the
  169  amount of the credit allowable for the taxable year.
  170         8. In the case of a nonprofit corporation which holds a
  171  pari-mutuel permit and which is exempt from federal income tax
  172  as a farmers’ cooperative, an amount equal to the excess of the
  173  gross income attributable to the pari-mutuel operations over the
  174  attributable expenses for the taxable year.
  175         9. The amount taken as a credit for the taxable year under
  176  s. 220.1895.
  177         10. Up to nine percent of the eligible basis of any
  178  designated project which is equal to the credit allowable for
  179  the taxable year under s. 220.185.
  180         11. The amount taken as a credit for the taxable year under
  181  s. 220.1875. The addition in this subparagraph is intended to
  182  ensure that the same amount is not allowed for the tax purposes
  183  of this state as both a deduction from income and a credit
  184  against the tax. This addition is not intended to result in
  185  adding the same expense back to income more than once.
  186         12. The amount taken as a credit for the taxable year under
  187  s. 220.192.
  188         13. The amount taken as a credit for the taxable year under
  189  s. 220.193.
  190         14. Any portion of a qualified investment, as defined in s.
  191  288.9913, which is claimed as a deduction by the taxpayer and
  192  taken as a credit against income tax pursuant to s. 288.9916.
  193         15. The costs to acquire a tax credit pursuant to s.
  194  288.1254(5) that are deducted from or otherwise reduce federal
  195  taxable income for the taxable year.
  196         16. The amount taken as a credit for the taxable year
  197  pursuant to s. 220.194.
  198         17. The amount taken as a credit for the taxable year under
  199  s. 220.196. The addition in this subparagraph is intended to
  200  ensure that the same amount is not allowed for the tax purposes
  201  of this state as both a deduction from income and a credit
  202  against the tax. The addition is not intended to result in
  203  adding the same expense back to income more than once.
  204         (b) Subtractions.—
  205         1. There shall be subtracted from such taxable income:
  206         a. The net operating loss deduction allowable for federal
  207  income tax purposes under s. 172 of the Internal Revenue Code
  208  for the taxable year, except that any net operating loss that is
  209  transferred pursuant to s. 220.194(6) may not be deducted by the
  210  seller,
  211         b. The net capital loss allowable for federal income tax
  212  purposes under s. 1212 of the Internal Revenue Code for the
  213  taxable year,
  214         c. The excess charitable contribution deduction allowable
  215  for federal income tax purposes under s. 170(d)(2) of the
  216  Internal Revenue Code for the taxable year, and
  217         d. The excess contributions deductions allowable for
  218  federal income tax purposes under s. 404 of the Internal Revenue
  219  Code for the taxable year.
  220  
  221  However, a net operating loss and a capital loss shall never be
  222  carried back as a deduction to a prior taxable year, but all
  223  deductions attributable to such losses shall be deemed net
  224  operating loss carryovers and capital loss carryovers,
  225  respectively, and treated in the same manner, to the same
  226  extent, and for the same time periods as are prescribed for such
  227  carryovers in ss. 172 and 1212, respectively, of the Internal
  228  Revenue Code. A deduction is not allowed for net operating
  229  losses, net capital losses, or excess contribution deductions
  230  under 26 U.S.C. ss. 170(d)(2), 172, 1212, and 404 for a member
  231  of a water’s edge group which is not a United States member.
  232  Carryovers of net operating losses, net capital losses, or
  233  excess contribution deductions under 26 U.S.C. ss. 170(d)(2),
  234  172, 1212, and 404 may be subtracted only by the member of the
  235  water’s edge group which generates a carryover.
  236         2. There shall be subtracted from such taxable income any
  237  amount to the extent included therein the following:
  238         a. Dividends treated as received from sources without the
  239  United States, as determined under s. 862 of the Internal
  240  Revenue Code.
  241         b. All amounts included in taxable income under s. 78 or s.
  242  951 of the Internal Revenue Code.
  243  
  244  However, as to any amount subtracted under this subparagraph,
  245  there shall be added to such taxable income all expenses
  246  deducted on the taxpayer’s return for the taxable year which are
  247  attributable, directly or indirectly, to such subtracted amount.
  248  Further, no amount shall be subtracted with respect to dividends
  249  paid or deemed paid by a Domestic International Sales
  250  Corporation.
  251         3.Amounts received by a member of a water’s edge group as
  252  dividends paid by another member of the water’s edge group must
  253  be subtracted from the taxable income to the extent that the
  254  dividends are included in the taxable income.
  255         4.3. In computing “adjusted federal income” for taxable
  256  years beginning after December 31, 1976, there shall be allowed
  257  as a deduction the amount of wages and salaries paid or incurred
  258  within this state for the taxable year for which no deduction is
  259  allowed pursuant to s. 280C(a) of the Internal Revenue Code
  260  (relating to credit for employment of certain new employees).
  261         5.4. There shall be subtracted from such taxable income any
  262  amount of nonbusiness income included therein.
  263         6.5. There shall be subtracted any amount of taxes of
  264  foreign countries allowable as credits for taxable years
  265  beginning on or after September 1, 1985, under s. 901 of the
  266  Internal Revenue Code to any corporation which derived less than
  267  20 percent of its gross income or loss for its taxable year
  268  ended in 1984 from sources within the United States, as
  269  described in s. 861(a)(2)(A) of the Internal Revenue Code, not
  270  including credits allowed under ss. 902 and 960 of the Internal
  271  Revenue Code, withholding taxes on dividends within the meaning
  272  of sub-subparagraph 2.a., and withholding taxes on royalties,
  273  interest, technical service fees, and capital gains.
  274         7.6. Notwithstanding any other provision of this code,
  275  except with respect to amounts subtracted pursuant to
  276  subparagraphs 1. and 4. 3., any increment of any apportionment
  277  factor which is directly related to an increment of gross
  278  receipts or income which is deducted, subtracted, or otherwise
  279  excluded in determining adjusted federal income shall be
  280  excluded from both the numerator and denominator of such
  281  apportionment factor. Further, all valuations made for
  282  apportionment factor purposes shall be made on a basis
  283  consistent with the taxpayer’s method of accounting for federal
  284  income tax purposes.
  285         (c) Installment sales occurring after October 19, 1980.—
  286         1. In the case of any disposition made after October 19,
  287  1980, the income from an installment sale shall be taken into
  288  account for the purposes of this code in the same manner that
  289  such income is taken into account for federal income tax
  290  purposes.
  291         2. Any taxpayer who regularly sells or otherwise disposes
  292  of personal property on the installment plan and reports the
  293  income therefrom on the installment method for federal income
  294  tax purposes under s. 453(a) of the Internal Revenue Code shall
  295  report such income in the same manner under this code.
  296         (d) Nonallowable deductions.—A deduction for net operating
  297  losses, net capital losses, or excess contributions deductions
  298  under ss. 170(d)(2), 172, 1212, and 404 of the Internal Revenue
  299  Code which has been allowed in a prior taxable year for Florida
  300  tax purposes shall not be allowed for Florida tax purposes,
  301  notwithstanding the fact that such deduction has not been fully
  302  utilized for federal tax purposes.
  303         (e) Adjustments related to federal acts.—Taxpayers shall be
  304  required to make the adjustments prescribed in this paragraph
  305  for Florida tax purposes with respect to certain tax benefits
  306  received pursuant to the Economic Stimulus Act of 2008, the
  307  American Recovery and Reinvestment Act of 2009, the Small
  308  Business Jobs Act of 2010, the Tax Relief, Unemployment
  309  Insurance Reauthorization, and Job Creation Act of 2010, the
  310  American Taxpayer Relief Act of 2012, the Tax Increase
  311  Prevention Act of 2014, the Consolidated Appropriations Act,
  312  2016, and the Tax Cuts and Jobs Act of 2017.
  313         1. There shall be added to such taxable income an amount
  314  equal to 100 percent of any amount deducted for federal income
  315  tax purposes as bonus depreciation for the taxable year pursuant
  316  to ss. 167 and 168(k) of the Internal Revenue Code of 1986, as
  317  amended by s. 103 of Pub. L. No. 110-185, s. 1201 of Pub. L. No.
  318  111-5, s. 2022 of Pub. L. No. 111-240, s. 401 of Pub. L. No.
  319  111-312, s. 331 of Pub. L. No. 112-240, s. 125 of Pub. L. No.
  320  113-295, s. 143 of Division Q of Pub. L. No. 114-113, and s.
  321  13201 of Pub. L. No. 115-97, for property placed in service
  322  after December 31, 2007, and before January 1, 2027. For the
  323  taxable year and for each of the 6 subsequent taxable years,
  324  there shall be subtracted from such taxable income an amount
  325  equal to one-seventh of the amount by which taxable income was
  326  increased pursuant to this subparagraph, notwithstanding any
  327  sale or other disposition of the property that is the subject of
  328  the adjustments and regardless of whether such property remains
  329  in service in the hands of the taxpayer.
  330         2. There shall be added to such taxable income an amount
  331  equal to 100 percent of any amount in excess of $128,000
  332  deducted for federal income tax purposes for the taxable year
  333  pursuant to s. 179 of the Internal Revenue Code of 1986, as
  334  amended by s. 102 of Pub. L. No. 110-185, s. 1202 of Pub. L. No.
  335  111-5, s. 2021 of Pub. L. No. 111-240, s. 402 of Pub. L. No.
  336  111-312, s. 315 of Pub. L. No. 112-240, and s. 127 of Pub. L.
  337  No. 113-295, for taxable years beginning after December 31,
  338  2007, and before January 1, 2015. For the taxable year and for
  339  each of the 6 subsequent taxable years, there shall be
  340  subtracted from such taxable income one-seventh of the amount by
  341  which taxable income was increased pursuant to this
  342  subparagraph, notwithstanding any sale or other disposition of
  343  the property that is the subject of the adjustments and
  344  regardless of whether such property remains in service in the
  345  hands of the taxpayer.
  346         3. There shall be added to such taxable income an amount
  347  equal to the amount of deferred income not included in such
  348  taxable income pursuant to s. 108(i)(1) of the Internal Revenue
  349  Code of 1986, as amended by s. 1231 of Pub. L. No. 111-5. There
  350  shall be subtracted from such taxable income an amount equal to
  351  the amount of deferred income included in such taxable income
  352  pursuant to s. 108(i)(1) of the Internal Revenue Code of 1986,
  353  as amended by s. 1231 of Pub. L. No. 111-5.
  354         4. Subtractions available under this paragraph may be
  355  transferred to the surviving or acquiring entity following a
  356  merger or acquisition and used in the same manner and with the
  357  same limitations as specified by this paragraph.
  358         5. The additions and subtractions specified in this
  359  paragraph are intended to adjust taxable income for Florida tax
  360  purposes, and, notwithstanding any other provision of this code,
  361  such additions and subtractions shall be permitted to change a
  362  taxpayer’s net operating loss for Florida tax purposes.
  363         (2) For purposes of this section, a taxpayer’s taxable
  364  income for the taxable year means taxable income as defined in
  365  s. 63 of the Internal Revenue Code and properly reportable for
  366  federal income tax purposes for the taxable year, but subject to
  367  the limitations set forth in paragraph (1)(b) with respect to
  368  the deductions provided by ss. 172 (relating to net operating
  369  losses), 170(d)(2) (relating to excess charitable
  370  contributions), 404(a)(1)(D) (relating to excess pension trust
  371  contributions), 404(a)(3)(A) and (B) (to the extent relating to
  372  excess stock bonus and profit-sharing trust contributions), and
  373  1212 (relating to capital losses) of the Internal Revenue Code,
  374  except that, subject to the same limitations, the term:
  375         (a) “Taxable income,” in the case of a life insurance
  376  company subject to the tax imposed by s. 801 of the Internal
  377  Revenue Code, means life insurance company taxable income;
  378  however, for purposes of this code, the total of any amounts
  379  subject to tax under s. 815(a)(2) of the Internal Revenue Code
  380  pursuant to s. 801(c) of the Internal Revenue Code shall not
  381  exceed, cumulatively, the total of any amounts determined under
  382  s. 815(c)(2) of the Internal Revenue Code of 1954, as amended,
  383  from January 1, 1972, to December 31, 1983;
  384         (b) “Taxable income,” in the case of an insurance company
  385  subject to the tax imposed by s. 831(b) of the Internal Revenue
  386  Code, means taxable investment income;
  387         (c) “Taxable income,” in the case of an insurance company
  388  subject to the tax imposed by s. 831(a) of the Internal Revenue
  389  Code, means insurance company taxable income;
  390         (d) “Taxable income,” in the case of a regulated investment
  391  company subject to the tax imposed by s. 852 of the Internal
  392  Revenue Code, means investment company taxable income;
  393         (e) “Taxable income,” in the case of a real estate
  394  investment trust subject to the tax imposed by s. 857 of the
  395  Internal Revenue Code, means the income subject to tax, computed
  396  as provided in s. 857 of the Internal Revenue Code;
  397         (f) “Taxable income,” in the case of a corporation which is
  398  a member of an affiliated group of corporations filing a
  399  consolidated income tax return for the taxable year for federal
  400  income tax purposes, means taxable income of such corporation
  401  for federal income tax purposes as if such corporation had filed
  402  a separate federal income tax return for the taxable year and
  403  each preceding taxable year for which it was a member of an
  404  affiliated group, unless a consolidated return for the taxpayer
  405  and others is required or elected under s. 220.131;
  406         (g) “Taxable income,” in the case of a cooperative
  407  corporation or association, means the taxable income of such
  408  organization determined in accordance with the provisions of ss.
  409  1381-1388 of the Internal Revenue Code;
  410         (h) “Taxable income,” in the case of an organization which
  411  is exempt from the federal income tax by reason of s. 501(a) of
  412  the Internal Revenue Code, means its unrelated business taxable
  413  income as determined under s. 512 of the Internal Revenue Code;
  414         (i) “Taxable income,” in the case of a corporation for
  415  which there is in effect for the taxable year an election under
  416  s. 1362(a) of the Internal Revenue Code, means the amounts
  417  subject to tax under s. 1374 or s. 1375 of the Internal Revenue
  418  Code for each taxable year;
  419         (j) “Taxable income,” in the case of a limited liability
  420  company, other than a limited liability company classified as a
  421  partnership for federal income tax purposes, as defined in and
  422  organized pursuant to chapter 605 or qualified to do business in
  423  this state as a foreign limited liability company or other than
  424  a similar limited liability company classified as a partnership
  425  for federal income tax purposes and created as an artificial
  426  entity pursuant to the statutes of the United States or any
  427  other state, territory, possession, or jurisdiction, if such
  428  limited liability company or similar entity is taxable as a
  429  corporation for federal income tax purposes, means taxable
  430  income determined as if such limited liability company were
  431  required to file or had filed a federal corporate income tax
  432  return under the Internal Revenue Code;
  433         (k) “Taxable income,” in the case of a taxpayer liable for
  434  the alternative minimum tax as defined in s. 55 of the Internal
  435  Revenue Code, means the alternative minimum taxable income as
  436  defined in s. 55(b)(2) of the Internal Revenue Code, less the
  437  exemption amount computed under s. 55(d) of the Internal Revenue
  438  Code. A taxpayer is not liable for the alternative minimum tax
  439  unless the taxpayer’s federal tax return, or related federal
  440  consolidated tax return, if included in a consolidated return
  441  for federal tax purposes, reflect a liability on the return
  442  filed for the alternative minimum tax as defined in s. 55(b)(2)
  443  of the Internal Revenue Code;
  444         (l) “Taxable income,” in the case of a taxpayer whose
  445  taxable income is not otherwise defined in this subsection,
  446  means the sum of amounts to which a tax rate specified in s. 11
  447  of the Internal Revenue Code plus the amount to which a tax rate
  448  specified in s. 1201(a)(2) of the Internal Revenue Code are
  449  applied for federal income tax purposes.
  450         Section 3. Section 220.131, Florida Statutes, is repealed.
  451         Section 4. Section 220.136, Florida Statutes, is created to
  452  read:
  453         220.136 Determination of the members of a water’s edge
  454  group.—
  455         (1)A corporation having 50 percent or more of its
  456  outstanding voting stock directly or indirectly owned or
  457  controlled by a water’s edge group is presumed to be a member of
  458  the water’s edge group. A corporation having less than 50
  459  percent of its outstanding voting stock directly or indirectly
  460  owned or controlled by a water’s edge group is a member of the
  461  water’s edge group if the business activities of the corporation
  462  show that the corporation is a member of the water’s edge group.
  463  All of the income of a corporation that is a member of a water’s
  464  edge group is presumed to be unitary. For purposes of this
  465  subsection, the attribution rules of 26 U.S.C. s. 318 must be
  466  used to determine whether voting stock is indirectly owned.
  467         (2)(a)A corporation that conducts business outside the
  468  United States is not a member of a water’s edge group if 80
  469  percent or more of the corporation’s property and payroll, as
  470  determined by the apportionment factors described in ss. 220.15
  471  and 220.1363, may be assigned to locations outside of the United
  472  States. However, such corporations that are incorporated in a
  473  tax haven may be a member of a water’s edge group pursuant to
  474  subsection (1). This subsection does not exempt a corporation
  475  that is not a member of a water’s edge group from this chapter.
  476         (b) As used in this subsection, the term “United States”
  477  means the 50 states, the District of Columbia, and Puerto Rico.
  478         (c)The apportionment factors described in ss. 220.1363 and
  479  220.15 must be used to determine whether a special industry
  480  corporation has engaged in a sufficient amount of activities
  481  outside of the United States to exclude it from treatment as a
  482  member of a water’s edge group.
  483         Section 5. Section 220.1363, Florida Statutes, is created
  484  to read:
  485         220.1363 Water’s edge groups; special requirements.—
  486         (1) For purposes of this section, the term “water’s edge
  487  reporting method” is a method to determine the taxable business
  488  profits of a group of entities conducting a unitary business.
  489  Under this method, the net income of the entities must be added
  490  together, along with the additions and subtractions under s.
  491  220.13, and apportioned to this state as a single taxpayer under
  492  ss. 220.15 and 220.151. However, each special industry member
  493  included in a water’s edge group return, which would otherwise
  494  be permitted to use a special method of apportionment under s.
  495  220.151, shall convert its single-factor apportionment to a
  496  three-factor apportionment of property, payroll, and sales. The
  497  special industry member shall calculate the denominator of its
  498  property, payroll, and sales factors in the same manner as those
  499  denominators are calculated by members that are not special
  500  industry members. The numerator of its sales, property, and
  501  payroll factors is the product of the denominator of each factor
  502  multiplied by the premiums or revenue-miles-factor ratio
  503  otherwise applicable under s. 220.151.
  504         (2)All members of a water’s edge group must use the
  505  water’s edge reporting method, under which:
  506         (a)Adjusted federal income, for purposes of s. 220.12,
  507  means the sum of adjusted federal income of all members of the
  508  water’s edge group as determined for a concurrent taxable year.
  509         (b)The numerators and denominators of the apportionment
  510  factors must be calculated for all members of the water’s edge
  511  group combined.
  512         (c)Intercompany sales transactions between members of the
  513  water’s edge group are not included in the numerator or
  514  denominator of the sales factor under ss. 220.15 and 220.151,
  515  regardless of whether indicia of a sale exist.
  516         (d)For sales of intangibles, including, but not limited
  517  to, accounts receivable, notes, bonds, and stock, which are made
  518  to entities outside the group, only the net proceeds are
  519  included in the numerator and denominator of the sales factor.
  520         (e)Sales that are not allocated or apportioned to any
  521  taxing jurisdiction, otherwise known as “nowhere sales,” may not
  522  be included in the numerator or denominator of the sales factor.
  523         (f)The income attributable to the Florida activities of a
  524  corporation that is exempt from taxation under the Interstate
  525  Income Act of 1959, Pub. L. No. 86-272, is excluded from the
  526  apportionment factor numerators in the calculation of corporate
  527  income tax, even if another member of the water’s edge group has
  528  nexus with this state and is subject to tax.
  529  
  530  As used in this subsection, the term “sale” includes, but is not
  531  limited to, loans, payments for the use of intangibles,
  532  dividends, and management fees.
  533         (3)(a)If a parent corporation is a member of the water’s
  534  edge group and has nexus with this state, a single water’s edge
  535  group return must be filed in the name and under the federal
  536  employer identification number of the parent corporation. If the
  537  water’s edge group does not have a parent corporation, if the
  538  parent corporation is not a member of the water’s edge group, or
  539  if the parent corporation does not have nexus with this state,
  540  then the members of the water’s edge group must choose a member
  541  subject to the tax imposed by this chapter to file the return.
  542  The members of the water’s edge group may not choose another
  543  member to file a corporate income tax return in subsequent years
  544  unless the filing member does not maintain nexus with this state
  545  or does not remain a member of the water’s edge group. The
  546  return must be signed by an authorized officer of the filing
  547  member as the agent for the water’s edge group.
  548         (b)If members of a water’s edge group have different
  549  taxable years, the taxable year of a majority of the members of
  550  the water’s edge group is the taxable year of the water’s edge
  551  group. If the taxable years of a majority of the members of a
  552  water’s edge group do not correspond, the taxable year of the
  553  member that must file the return for the water’s edge group is
  554  the taxable year of the water’s edge group.
  555         (c)1.A member of a water’s edge group having a taxable
  556  year that does not correspond to the taxable year of the water’s
  557  edge group shall determine its income for inclusion on the tax
  558  return for the water’s edge group. The member shall use:
  559         a.The precise amount of taxable income received during the
  560  months corresponding to the taxable year of the water’s edge
  561  group, if the precise amount can be readily determined from the
  562  member’s books and records.
  563         b.The taxable income of the member converted to conform to
  564  the taxable year of the water’s edge group on the basis of the
  565  number of months falling within the taxable year of the water’s
  566  edge group. For example, if the taxable year of the water’s edge
  567  group is a calendar year and a member operates on a fiscal year
  568  ending on April 30, the income of the member must include 8/12
  569  of the income from the current taxable year and 4/12 of the
  570  income from the preceding taxable year. This method to determine
  571  the income of a member may be used only if the return can be
  572  timely filed after the end of the taxable year of the water’s
  573  edge group.
  574         c.The taxable income of the member during its taxable year
  575  that ends within the taxable year of the water’s edge group.
  576         2.The method of determining the income of a member of a
  577  water’s edge group whose taxable year does not correspond to the
  578  taxable year of the water’s edge group may not change as long as
  579  the member remains a member of the water’s edge group. The
  580  apportionment factors for the member must be applied to the
  581  income of the member for the taxable year of the water’s edge
  582  group.
  583         (4)(a)A water’s edge group return must include a
  584  computational schedule that:
  585         1.Combines the federal income of all members of the
  586  water’s edge group;
  587         2.Shows all intercompany eliminations;
  588         3.Shows Florida additions and subtractions under s.
  589  220.13; and
  590         4.Shows the calculation of the combined apportionment
  591  factors.
  592         (b)In addition to its return, a water’s edge group shall
  593  also file a domestic disclosure spreadsheet. The spreadsheet
  594  must fully disclose:
  595         1.The income reported to each state;
  596         2.The state tax liability;
  597         3.The method used for apportioning or allocating income to
  598  the various states; and
  599         4.Other information required by department rule in order
  600  to determine the proper amount of tax due to each state and to
  601  identify the water’s edge group.
  602         (5)The department may adopt rules and forms to administer
  603  this section. The Legislature intends to grant the department
  604  extensive authority to adopt rules and forms describing and
  605  defining principles for determining the existence of a water’s
  606  edge business, definitions of common control, methods of
  607  reporting, and related forms, principles, and other definitions.
  608         Section 6. Section 220.14, Florida Statutes, is amended to
  609  read:
  610         220.14 Exemption.—
  611         (1) In computing a taxpayer’s liability for tax under this
  612  code, there shall be exempt from the tax $50,000 of net income
  613  as defined in s. 220.12 or such lesser amount as will, without
  614  increasing the taxpayer’s federal income tax liability, provide
  615  the state with an amount under this code which is equal to the
  616  maximum federal income tax credit which may be available from
  617  time to time under federal law.
  618         (2) In the case of a taxable year for a period of less than
  619  12 months, the exemption allowed by this section must shall be
  620  prorated on the basis of the number of days in such year to 365
  621  days, or, in a leap year, 366 days.
  622         (3) Only one exemption shall be allowed to taxpayers filing
  623  a water’s edge group consolidated return under this code.
  624         (4) Notwithstanding any other provision of this code, not
  625  more than one exemption under this section may be allowed to the
  626  Florida members of a controlled group of corporations, as
  627  defined in s. 1563 of the Internal Revenue Code with respect to
  628  taxable years ending on or after December 31, 1970, filing
  629  separate returns under this code. The exemption described in
  630  this section shall be divided equally among such Florida members
  631  of the group, unless all of such members consent, at such time
  632  and in such manner as the department shall by regulation
  633  prescribe, to an apportionment plan providing for an unequal
  634  allocation of such exemption.
  635         Section 7. Paragraph (c) of subsection (5) of section
  636  220.15, Florida Statutes, is amended to read:
  637         220.15 Apportionment of adjusted federal income.—
  638         (5) The sales factor is a fraction the numerator of which
  639  is the total sales of the taxpayer in this state during the
  640  taxable year or period and the denominator of which is the total
  641  sales of the taxpayer everywhere during the taxable year or
  642  period.
  643         (c) Sales of a financial organization, including, but not
  644  limited to, banking and savings institutions, investment
  645  companies, real estate investment trusts, and brokerage
  646  companies, occur in this state if derived from:
  647         1. Fees, commissions, or other compensation for financial
  648  services rendered within this state;
  649         2. Gross profits from trading in stocks, bonds, or other
  650  securities managed within this state;
  651         3. Interest received within this state, other than interest
  652  from loans secured by mortgages, deeds of trust, or other liens
  653  upon real or tangible personal property located without this
  654  state, and dividends received within this state;
  655         4. Interest charged to customers at places of business
  656  maintained within this state for carrying debit balances of
  657  margin accounts, without deduction of any costs incurred in
  658  carrying such accounts;
  659         5. Interest, fees, commissions, or other charges or gains
  660  from loans secured by mortgages, deeds of trust, or other liens
  661  upon real or tangible personal property located in this state or
  662  from installment sale agreements originally executed by a
  663  taxpayer or the taxpayer’s agent to sell real or tangible
  664  personal property located in this state;
  665         6. Rents from real or tangible personal property located in
  666  this state; or
  667         7. Any other gross income, including other interest,
  668  resulting from the operation as a financial organization within
  669  this state.
  670  
  671  In computing the amounts under this paragraph, any amount
  672  received by a member of an affiliated group (determined under s.
  673  1504(a) of the Internal Revenue Code, but without reference to
  674  whether any such corporation is an “includable corporation”
  675  under s. 1504(b) of the Internal Revenue Code) from another
  676  member of such group shall be included only to the extent such
  677  amount exceeds expenses of the recipient directly related
  678  thereto.
  679         Section 8. Paragraph (f) of subsection (1) of section
  680  220.183, Florida Statutes, is amended to read:
  681         220.183 Community contribution tax credit.—
  682         (1) AUTHORIZATION TO GRANT COMMUNITY CONTRIBUTION TAX
  683  CREDITS; LIMITATIONS ON INDIVIDUAL CREDITS AND PROGRAM
  684  SPENDING.—
  685         (f) A taxpayer who files a Florida consolidated return as a
  686  member of an affiliated group pursuant to s. 220.131(1) may be
  687  allowed the credit on a consolidated return basis.
  688         Section 9. Paragraphs (b), (c), and (d) of subsection (2)
  689  of section 220.1845, Florida Statutes, are amended to read:
  690         220.1845 Contaminated site rehabilitation tax credit.—
  691         (2) AUTHORIZATION FOR TAX CREDIT; LIMITATIONS.—
  692         (b) A tax credit applicant, or multiple tax credit
  693  applicants working jointly to clean up a single site, may not be
  694  granted more than $500,000 per year in tax credits for each site
  695  voluntarily rehabilitated. Multiple tax credit applicants shall
  696  be granted tax credits in the same proportion as their
  697  contribution to payment of cleanup costs. Subject to the same
  698  conditions and limitations as provided in this section, a
  699  municipality, county, or other tax credit applicant which
  700  voluntarily rehabilitates a site may receive not more than
  701  $500,000 per year in tax credits which it can subsequently
  702  transfer subject to the provisions in paragraph (f) (g).
  703         (c) If the credit granted under this section is not fully
  704  used in any one year because of insufficient tax liability on
  705  the part of the corporation, the unused amount may be carried
  706  forward for up to 5 years. The carryover credit may be used in a
  707  subsequent year if the tax imposed by this chapter for that year
  708  exceeds the credit for which the corporation is eligible in that
  709  year after applying the other credits and unused carryovers in
  710  the order provided by s. 220.02(8). If during the 5-year period
  711  the credit is transferred, in whole or in part, pursuant to
  712  paragraph (f) (g), each transferee has 5 years after the date of
  713  transfer to use its credit.
  714         (d) A taxpayer that files a consolidated return in this
  715  state as a member of an affiliated group under s. 220.131(1) may
  716  be allowed the credit on a consolidated return basis up to the
  717  amount of tax imposed upon the consolidated group.
  718         Section 10. Subsection (2) of section 220.1875, Florida
  719  Statutes, is amended to read:
  720         220.1875 Credit for contributions to eligible nonprofit
  721  scholarship-funding organizations.—
  722         (2) A taxpayer who files a Florida consolidated return as a
  723  member of an affiliated group pursuant to s. 220.131(1) may be
  724  allowed the credit on a consolidated return basis; however, the
  725  total credit taken by the affiliated group is subject to the
  726  limitation established under subsection (1).
  727         Section 11. Paragraphs (a) and (c) of subsection (3) of
  728  section 220.191, Florida Statutes, are amended to read:
  729         220.191 Capital investment tax credit.—
  730         (3)(a) Notwithstanding subsection (2), an annual credit
  731  against the tax imposed by this chapter shall be granted to a
  732  qualifying business which establishes a qualifying project
  733  pursuant to subparagraph (1)(g)3., in an amount equal to the
  734  lesser of $15 million or 5 percent of the eligible capital costs
  735  made in connection with a qualifying project, for a period not
  736  to exceed 20 years beginning with the commencement of operations
  737  of the project. The tax credit shall be granted against the
  738  corporate income tax liability of the qualifying business and as
  739  further provided in paragraph (c). The total tax credit provided
  740  pursuant to this subsection shall be equal to no more than 100
  741  percent of the eligible capital costs of the qualifying project.
  742         (c) The credit granted under this subsection may be used in
  743  whole or in part by the qualifying business or any corporation
  744  that is either a member of that qualifying business’s affiliated
  745  group of corporations, is a related entity taxable as a
  746  cooperative under subchapter T of the Internal Revenue Code, or,
  747  if the qualifying business is an entity taxable as a cooperative
  748  under subchapter T of the Internal Revenue Code, is related to
  749  the qualifying business. Any entity related to the qualifying
  750  business may continue to file as a member of a Florida-nexus
  751  consolidated group pursuant to a prior election made under s.
  752  220.131(1), Florida Statutes (1985), even if the parent of the
  753  group changes due to a direct or indirect acquisition of the
  754  former common parent of the group. Any credit can be used by any
  755  of the affiliated companies or related entities referenced in
  756  this paragraph to the same extent as it could have been used by
  757  the qualifying business. However, any such use shall not operate
  758  to increase the amount of the credit or extend the period within
  759  which the credit must be used.
  760         Section 12. Subsection (2) of section 220.192, Florida
  761  Statutes, is amended to read:
  762         220.192 Renewable energy technologies investment tax
  763  credit.—
  764         (2) TAX CREDIT.—For tax years beginning on or after January
  765  1, 2013, a credit against the tax imposed by this chapter shall
  766  be granted in an amount equal to the eligible costs. Credits may
  767  be used in tax years beginning January 1, 2013, and ending
  768  December 31, 2016, after which the credit shall expire. If the
  769  credit is not fully used in any one tax year because of
  770  insufficient tax liability on the part of the corporation, the
  771  unused amount may be carried forward and used in tax years
  772  beginning January 1, 2013, and ending December 31, 2018, after
  773  which the credit carryover expires and may not be used. A
  774  taxpayer that files a consolidated return in this state as a
  775  member of an affiliated group under s. 220.131(1) may be allowed
  776  the credit on a consolidated return basis up to the amount of
  777  tax imposed upon the consolidated group. Any eligible cost for
  778  which a credit is claimed and which is deducted or otherwise
  779  reduces federal taxable income shall be added back in computing
  780  adjusted federal income under s. 220.13.
  781         Section 13. Paragraphs (c) and (e) of subsection (3) of
  782  section 220.193, Florida Statutes, are amended to read:
  783         220.193 Florida renewable energy production credit.—
  784         (3) An annual credit against the tax imposed by this
  785  section shall be allowed to a taxpayer, based on the taxpayer’s
  786  production and sale of electricity from a new or expanded
  787  Florida renewable energy facility. For a new facility, the
  788  credit shall be based on the taxpayer’s sale of the facility’s
  789  entire electrical production. For an expanded facility, the
  790  credit shall be based on the increases in the facility’s
  791  electrical production that are achieved after May 1, 2012.
  792         (c) If the amount of credits applied for each year exceeds
  793  the amount authorized in paragraph (f) (g), the Department of
  794  Agriculture and Consumer Services shall allocate credits to
  795  qualified applicants based on the following priority:
  796         1. An applicant who places a new facility in operation
  797  after May 1, 2012, shall be allocated credits first, up to a
  798  maximum of $250,000 each, with any remaining credits to be
  799  granted pursuant to subparagraph 3., but if the claims for
  800  credits under this subparagraph exceed the state fiscal year cap
  801  in paragraph (f) (g), credits shall be allocated pursuant to
  802  this subparagraph on a prorated basis based upon each
  803  applicant’s qualified production and sales as a percentage of
  804  total production and sales for all applicants in this category
  805  for the fiscal year.
  806         2. An applicant who does not qualify under subparagraph 1.
  807  but who claims a credit of $50,000 or less shall be allocated
  808  credits next, but if the claims for credits under this
  809  subparagraph, combined with credits allocated in subparagraph
  810  1., exceed the state fiscal year cap in paragraph (f) (g),
  811  credits shall be allocated pursuant to this subparagraph on a
  812  prorated basis based upon each applicant’s qualified production
  813  and sales as a percentage of total qualified production and
  814  sales for all applicants in this category for the fiscal year.
  815         3. An applicant who does not qualify under subparagraph 1.
  816  or subparagraph 2. and an applicant whose credits have not been
  817  fully allocated under subparagraph 1. shall be allocated credits
  818  next. If there is insufficient capacity within the amount
  819  authorized for the state fiscal year in paragraph (f) (g), and
  820  after allocations pursuant to subparagraphs 1. and 2., the
  821  credits allocated under this subparagraph shall be prorated
  822  based upon each applicant’s unallocated claims for qualified
  823  production and sales as a percentage of total unallocated claims
  824  for qualified production and sales of all applicants in this
  825  category, up to a maximum of $1 million per taxpayer per state
  826  fiscal year. If, after application of this $1 million cap, there
  827  is excess capacity under the state fiscal year cap in paragraph
  828  (f) (g) in any state fiscal year, that remaining capacity shall
  829  be used to allocate additional credits with priority given in
  830  the order set forth in this subparagraph and without regard to
  831  the $1 million per taxpayer cap.
  832         (e) A taxpayer that files a consolidated return in this
  833  state as a member of an affiliated group under s. 220.131(1) may
  834  be allowed the credit on a consolidated return basis up to the
  835  amount of tax imposed upon the consolidated group.
  836         Section 14. Section 220.51, Florida Statutes, is amended to
  837  read:
  838         220.51 Adoption Promulgation of rules and regulations.—In
  839  accordance with the Administrative Procedure Act, chapter 120,
  840  the department is authorized to make, adopt promulgate, and
  841  enforce such reasonable rules and regulations, and to prescribe
  842  such forms relating to the administration and enforcement of the
  843  provisions of this code, as it may deem appropriate, including:
  844         (1) Rules for initial implementation of this code and for
  845  taxpayers’ transitional taxable years commencing before and
  846  ending after January 1, 1972; and
  847         (2) Rules or regulations to clarify whether certain groups,
  848  organizations, or associations formed under the laws of this
  849  state or any other state, country, or jurisdiction shall be
  850  deemed “taxpayers” for the purposes of this code, in accordance
  851  with the legislative declarations of intent in s. 220.02; and
  852         (3) Regulations relating to consolidated reporting for
  853  affiliated groups of corporations, in order to provide for an
  854  equitable and just administration of this code with respect to
  855  multicorporate taxpayers.
  856         Section 15. Section 220.64, Florida Statutes, is amended to
  857  read:
  858         220.64 Other provisions applicable to franchise tax.—To the
  859  extent that they are not manifestly incompatible with the
  860  provisions of this part, parts I, III, IV, V, VI, VIII, IX, and
  861  X of this code and ss. 220.12, 220.13, 220.136, 220.1363,
  862  220.15, and 220.16 apply to the franchise tax imposed by this
  863  part. Under rules prescribed by the department in s. 220.131, a
  864  consolidated return may be filed by any affiliated group of
  865  corporations composed of one or more banks or savings
  866  associations, its or their Florida parent corporations
  867  corporation, and any nonbank or nonsavings subsidiaries of such
  868  parent corporations corporation.
  869         Section 16. Paragraph (f) of subsection (4) and paragraph
  870  (a) of subsection (5) of section 288.1254, Florida Statutes, are
  871  amended to read:
  872         288.1254 Entertainment industry financial incentive
  873  program.—
  874         (4) TAX CREDIT ELIGIBILITY; TAX CREDIT AWARDS; QUEUES;
  875  ELECTION AND DISTRIBUTION; CARRYFORWARD; CONSOLIDATED RETURNS;
  876  PARTNERSHIP AND NONCORPORATE DISTRIBUTIONS; MERGERS AND
  877  ACQUISITIONS.—
  878         (f) Consolidated returns.—A certified production company
  879  that files a Florida consolidated return as a member of an
  880  affiliated group under s. 220.131(1) may be allowed the credit
  881  on a consolidated return basis up to the amount of the tax
  882  imposed upon the consolidated group under chapter 220.
  883         (5) TRANSFER OF TAX CREDITS.—
  884         (a) Authorization.—Upon application to the Office of Film
  885  and Entertainment and approval by the department, a certified
  886  production company, or a partner or member that has received a
  887  distribution under paragraph (4)(f) (4)(g), may elect to
  888  transfer, in whole or in part, any unused credit amount granted
  889  under this section. An election to transfer any unused tax
  890  credit amount under chapter 212 or chapter 220 must be made no
  891  later than 5 years after the date the credit is awarded, after
  892  which period the credit expires and may not be used. The
  893  department shall notify the Department of Revenue of the
  894  election and transfer.
  895         Section 17. Subsections (9) and (10) of section 376.30781,
  896  Florida Statutes, are amended to read:
  897         376.30781 Tax credits for rehabilitation of drycleaning
  898  solvent-contaminated sites and brownfield sites in designated
  899  brownfield areas; application process; rulemaking authority;
  900  revocation authority.—
  901         (9) On or before May 1, the Department of Environmental
  902  Protection shall inform each tax credit applicant that is
  903  subject to the January 31 annual application deadline of the
  904  applicant’s eligibility status and the amount of any tax credit
  905  due. The department shall provide each eligible tax credit
  906  applicant with a tax credit certificate that must be submitted
  907  with its tax return to the Department of Revenue to claim the
  908  tax credit or be transferred pursuant to s. 220.1845(2)(f) s.
  909  220.1845(2)(g). The May 1 deadline for annual site
  910  rehabilitation tax credit certificate awards shall not apply to
  911  any tax credit application for which the department has issued a
  912  notice of deficiency pursuant to subsection (8). The department
  913  shall respond within 90 days after receiving a response from the
  914  tax credit applicant to such a notice of deficiency. Credits may
  915  not result in the payment of refunds if total credits exceed the
  916  amount of tax owed.
  917         (10) For solid waste removal, new health care facility or
  918  health care provider, and affordable housing tax credit
  919  applications, the Department of Environmental Protection shall
  920  inform the applicant of the department’s determination within 90
  921  days after the application is deemed complete. Each eligible tax
  922  credit applicant shall be informed of the amount of its tax
  923  credit and provided with a tax credit certificate that must be
  924  submitted with its tax return to the Department of Revenue to
  925  claim the tax credit or be transferred pursuant to s.
  926  220.1845(2)(f) s. 220.1845(2)(g). Credits may not result in the
  927  payment of refunds if total credits exceed the amount of tax
  928  owed.
  929         Section 18. Transitional rules.—
  930         (1)For the first taxable year beginning on or after
  931  January 1, 2020, a taxpayer that filed a Florida corporate
  932  income tax return in the preceding taxable year and that is a
  933  member of a water’s edge group shall compute its income together
  934  with all members of its water’s edge group and file a combined
  935  Florida corporate income tax return with all members of its
  936  water’s edge group.
  937         (2)An affiliated group of corporations which filed a
  938  Florida consolidated corporate income tax return pursuant to an
  939  election provided in former s. 220.131, Florida Statutes, shall
  940  cease filing a Florida consolidated return for taxable years
  941  beginning on or after January 1, 2020, and shall file a combined
  942  Florida corporate income tax return with all members of its
  943  water’s edge group.
  944         (3)An affiliated group of corporations which filed a
  945  Florida consolidated corporate income tax return pursuant to the
  946  election in s. 220.131(1), Florida Statutes (1985), which
  947  allowed the affiliated group to make an election within 90 days
  948  after December 20, 1984, or upon filing the taxpayer’s first
  949  return after December 20, 1984, whichever was later, shall cease
  950  filing a Florida consolidated corporate income tax return using
  951  that method for taxable years beginning on or after January 1,
  952  2020, and shall file a combined Florida corporate income tax
  953  return with all members of its water’s edge group.
  954         (4)A taxpayer that is not a member of a water’s edge group
  955  remains subject to chapter 220, Florida Statutes, and shall file
  956  a separate Florida corporate income tax return as previously
  957  required.
  958         (5)For taxable years beginning on or after January 1,
  959  2020, a tax return for a member of a water’s edge group must be
  960  a combined Florida corporate income tax return that includes tax
  961  information for all members of the water’s edge group. The tax
  962  return must be filed by a member that has a nexus with this
  963  state.
  964         Section 19. Funds recaptured pursuant to this act must be
  965  appropriated in the General Appropriations Act to the various
  966  school districts to reduce the required local effort millage.
  967         Section 20. This act shall take effect July 1, 2019.

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