Applicability and Limitations, Definitions, Tables, Application Process for Approval to Earn Tax Credits or to Create Transferable Tax Credits, Early Review of an Application for Approval, Application Process for Certification to Take or Transfer ...  

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    DEPARTMENT OF ECONOMIC OPPORTUNITY

    Division of Strategic Business Development

    RULE NOS.:RULE TITLES:

    73A-5.001Applicability and Limitations

    73A-5.002Definitions

    73A-5.003Tables

    73A-5.004Application Process for Approval to Earn Tax Credits or to Create Transferable Tax Credits

    73A-5.005Early Review of an Application for Approval

    73A-5.006Application Process for Certification to Take or Transfer Tax Credits

    73A-5.007Revocation or Modification of Certification to Take or Transfer Tax Credits

    73A-5.008Forms

    NOTICE OF CHANGE

    Notice is hereby given that the following changes have been made to the proposed rule in accordance with subparagraph 120.54(3)(d)1., F.S., published in Vol. 39, No. 143, July 24, 2013 issue of the Florida Administrative Register.

    The changes are in response to written comments submitted by the staff of the Joint Administrative Procedures Committee.

     

    73A-5.001 Applicability and Limitations.

    (1) This chapter applies to any an Applicant, as defined in Rule 73A-5.002, F.A.C., or Taxpayer, as defined in section 220.03, Florida Statutes, that is seeking to take a nontransferable tax credit toward corporate income tax or to create or use a transferable net operating loss tax credit pursuant to the Act.  An Applicant shall submit an Application for Approval and the corresponding using Form DEO/SBD194(1), or an Application for Certification, pursuant to using Form DEO/SBD 194(2), using the parameters provided established in Tables 1 and Table 2, of Rule 73 A-5.003, F.A.C. 73A-5.003, F.A.C., and must be an eligible “Taxpayer” as defined in section 220.03, Florida Statutes.  Copies of these Forms DEO will only process complete submissions received, using the appropriate forms, as provided below; which are available from the Department of Economic Opportunity (DEO) at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, or by going to: on DEO’s website  http://www.floridajobs.org.

    (a) Florida Space Business Incentive: Application for Approval, Florida Department of Economic Opportunity Form DEO/SBD194(1); effective date: _______, 2013, which is hereby adopted and incorporated by reference.

    (b) Florida Space Business Incentive: Application for Certification, Florida Department of Economic Opportunity Form DEO/SBD194(2), effective date of _______, hereby adopted and incorporated by reference.

    (c) Florida Space Business Incentive: Transfer Statement, Florida Department of Economic Opportunity Form DEO/SBD194(3),effective date of _______, hereby adopted and incorporated by reference.

    (2) An Applicant shall not submit an Application for Approval to Earn Nontransferable Corporate Income Tax Credits and an Application for Approval to Create Transferable Net Operating Loss Tax Credits in the same State Fiscal Year.  The deadlines established for submittal of an Application for Approval are shown in Table 1 of Rule 73A-5.003, F.A.C.

    (3)  An Applicant shall not submit an Application for Certification of a Nontransferable Corporate Income Tax Credit and an Application for Certification of a Transferable Net Operating Loss Tax Credit in the same State Fiscal Year.  The deadlines established for submittal of an Application for Certification are shown in Table 1 of Rule 73A-5.003, F.A.C.

    (2)(4) Only one category of Application for Approval may be submitted in a single State Fiscal Year, and only one category of Application for Certification shall be approved in a single State Fiscal Year.  An incomplete Application for Approval will Incomplete applications do not secure a place in the first-come, first-served application line.  In order for an Application for Approval Therefore, the application deadlines established in Table 1 of Rule 73A-5.003, F.A.C., are intended to allow sufficient time for application deficiencies to be corrected. considered complete by DEO, all Sections of Form DEO/SBD194(1) must be complete when submitted.

    (3) DEO will have 60 days to review a complete application once submitted and to advise an Applicant of its intent to deny or approve the application.

    (4) DEO may consult with Space Florida regarding the qualifications of an applicant.

    (5) The maximum Nontransferable Tax Credit amount that shall be approved by DEO, the maximum Nontransferable Corporate Income Tax Credit that shall be certified by DEO, and the minimum amount of Spaceflight Project Job Creation and non-state funded investment amounts which may be included in an application, are shown in Table 2 of Rule 73A-5.003, F.A.C.  No Applications to Earn Nontransferable Corporate Income Tax Credits shall be approved after October 1, 2017; therefore no such Applications shall be accepted by DEO after July 31, 2017.

    (5)(6) Table 2 of Rule 73A-5.003, F.A.C., indicates the maximum amount of tax credits that shall be approved and certified for each Application for Certification.  Table 2 also indicates The maximum Transferable Net Operating Loss Tax Credit that shall be approved by DEO, the maximum Transferable Net Operating Loss Tax Credit that shall be certified by DEO, and the minimum amount of Spaceflight Project Job Creation and non-state funded investment amounts which must be documented in an Application for Certification. may be included in an application are shown in Table 2 of Rule 73A-5.003, F.A.C.  No Applications to Create Nontransferable Corporate Income Tax Credits shall be approved after October 1, 2017; therefore no such Applications shall be accepted by DEO after July 31, 2017.

    (6)(7) An Applicant’s Application for Certification must include the documented creation of the 35 new jobs.” defined by the Act.  The period for the creation of these new jobs does not begin until after an Application for Approval is approved by DEO.  Once the 35 new jobs have been created, and before an Applicant is eligible to submit the relevant Application for Certification, the new employees filling the 35 new jobs must be paid at least 115% of the statewide or countywide average annual private sector wage for 3 years, as described in the Act section 220.194, Florida Statutes, before the Applicant is eligible to submit the relevant Application for Certification.

    (7)(8) An Applicant must submit its application using the application processes adopted pursuant to this Chapter.  Each application will be completely evaluated for completeness and noNo Applicant will receive approval or certification until DEO is able to verify the requirements set forth in subsections Sections 220.194 (4), (5) and (6), Florida Statutes.) of the Act.  Applicants must provide assistance to DEO when verification is necessary and when necessary under subsection (7) DEO may use, but is not limited to, the following methods of verification of the Act information submitted:  Some examples of Applicant assistance are as follows:

    (a) Provide Request more detailed information or explanation to DEO from the Applicant in writing; and/or

    (b) Provide Examine the methods of the calculations used in the application process; and/or

    (c) Discuss any Meet with and/or discuss concerns with DEO may have with a submitted application the Applicant or its designated authority.

    (9) An Applicant seeking a tax credit pursuant to Section 220.194, Florida Statutes, shall use Form DEO/SBD 194(1) or Form DEO/SBD194(2), adopted pursuant to this Chapter and incorporated herein by reference, for the Tax Credit Applications defined in Table 1 of Rule 73A-5.003, F.A.C.  Applicants shall submit their applications to Space Florida at 505 Odyssey Way, Suite 300, Exploration Park, Florida 32953, for preliminary review at least 30 days prior to the submittal deadlines identified in Table 1 of Rule 73A-5.003, F.A.C.  Upon receipt of an Application for Approval or Certification, as provided in the Act and by this Chapter, Space Florida will assist DEO and the Applicant by completely evaluating such application and either providing the Applicant with a written favorable recommendation or a written explanation of the application’s deficiencies within 60 days of receiving the relevant application. The Applicant shall only submit applications to DEO that include a positive recommendation from Space Florida.

    (10) An application for Approval or for Certification will not be considered by DEO unless it includes a written and positive recommendation from Space Florida. The Applicant must submit its application to DEO using the application processes adopted pursuant to this Chapter.

    (8)(11) Applicants must file an their annual report with DEO on the progress of the spaceflight project for each year claimed project’s progress with the Department of Economic Opportunity byAnnual reports must be received by DEO before October 1 of the fiscal year following the fiscal year in which the Application for Certification was submitted relevant year.

    (9)(11) DOR will not disburse any funds in connection with the Nontransferable Corporate Income Tax Credit or with the Transferable Net Operating Loss Tax Credit programs, regardless if the total credits certified exceed the amount of tax owed.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(4) FS. History–New_________.

     

    73A-5.002 Definitions.

    This Rule defines terms and phrases used throughout Chapter 73A-5, F.A.C. In this Chapter, terms and phrases shall have the meanings defined by sSection 220.194, Florida Statutes, or by this Rule.  Terms and phrases not defined by statute or rule shall be construed according to their plain meaning, and in all cases with the objective of advancing the purpose of the rule in which they appear.

    (1) “Act” means Section 15 of Chapter 2011-76, Laws of Florida, codified at Section 220.194, Florida Statutes.

    (2) “Applicant” means a Spaceflight Business registered with the Department of State and engaged in (a) spaceflight project(s), that has submitted an Application for Approval and/or an Application for Certification to the Department of Economic Opportunity.

    (3)  “Application for Approval” means Form DEO/SBD194(1), Florida Space Business Incentive Act: Application for Approval.

    (4) “Application for Certification” means Form DEO/SBD194(2), Florida Space Business Incentive Act: Application for Certification.

    (5) “Certification Letter” means the “Spaceflight Business Incentive Program Certification Decision Letter,” signed by the Department of Economic Opportunity and provided to the Certified Applicant.

    (5)(6) “DOR” means the Florida Department of Revenue, whose email address is: revenueaccounting@dor.state.fl.us.

    (6)(7) “DEO” or “Department of Economic Opportunity” means the Florida Department of Economic Opportunity, whose address is 107 East Madison Street, Caldwell Building, Tallahassee, Florida 32399.

    (7)(8) “Job Creation” means at least 35 new, direct, full-time jobs, located in this state, that have been created as a result of the Applicant’s eligible spaceflight project activities.

    (9) “Letter of Approval” means the letter issued by the Department of Economic Opportunity to an Applicant approving an Application for Approval within 60 days after the receipt of the completed application.

    (10) “Letter of Certification” means the letter issued by the Department of Economic Opportunity to an Applicant approving their Application for Certification within 90 days after the receipt of the completed application. The Department of Economic Opportunity shall include in the Letter of Certification any restrictions imposed. A copy of the Letter of Certification shall be submitted to the Department of Revenue within 10 days of being issued.

    (11) “Notice of Intent to Deny an Application for Approval” means the notice issued by the Department of Economic Opportunity to an Applicant denying their Application for Approval.  Such Notice of Intent to Deny an Application for Approval shall inform the Applicant of the grounds for the denial.

    (12) “Notice of Intent to Deny an Application for Certification” means the notice issued by the Department of Economic Opportunity to an Applicant denying their Application for Certification.  Such Notice of Intent to Deny an Application for Certification shall inform the Applicant of the grounds for the denial.

    (13) “Notice of Revocation or Modification” means the notice issued by the Department of Economic Opportunity to an Applicant and to the Department of Revenue revoking or modifying a Certification.  The Department of Economic Opportunity may issue a Notice of Revocation or Modification where it determines that a certified spaceflight business made a false statement or representation in any application, record, report, plan, or other document filed in an attempt to receive tax credits under the Act and/or this Chapter. The Department of Economic Opportunity shall immediately notify the Department of Revenue of any revoked or modified orders affecting previously granted tax credits. The certified spaceflight business must notify the Department of Economic Opportunity and the Department or Revenue of any change in its claimed tax credit.

    (8)(14) “State” means the State of Florida, either as a political entity or in the sense of geographical boundaries, as made clear from the context.

    (15) “Transfer Statement” means Form DEO/SBD194(3).

    (16) “Transferable Tax Credit” means a certified spaceflight business’s Florida net operating loss that would otherwise be available to be taken on a return filed under this chapter, provided that the activity giving rise to such net operating loss must have occurred after July 1, 2011.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194 FS. HistoryNew__________.

     


    73A-5.003 Tables.

    Table 1: Submittal of Applications for Approval Nontransferable and Transferable Tax Credits per Rules 73A-5.001 and 73A-5.004, F.A.C.

     

    Deadline to submit completed

    Florida Space Business Incentive:

    Applications for Approval

    Form DEO/SBD194(1)

    Applications for Certification

    Type of Tax Credit Requested

    in Section II D of the Application for Approval Type

    Approval” to Earn Nontransferable Corporate Income Tax Credits1

    “Approval” to Create Transferable Net Operating Loss Tax Credits1

    “Certification” of a Nontransferable Corporate Income Tax Credit

    “Certification” of a Transferable Net Operating Loss Tax Credit

    Number of Complete Applications Allowed

    One

    One

    One

    One

    Application Deadline to request for Applicants requesting one type of Tax Credit Certification1

    August July 1, 2017

    August July 1, 2017

    ?

    ?

    Application Deadline to request for Applicants requesting both types of Tax Credit Certification1

    May 1 31, 2017

    May 1 31, 2017

    ?

    ?

     

     

     

     

     

    1 The job creation and investment requirement are per tax credit.  In order to claim both credits the Applicant must have created a minimum of 70 eligible jobs and must have invested at least $30,000,000 as a direct result of the Applicant’s eligible Florida Spaceflight Projects.  The investment cannot be from the use of state funds.

    Table 2: Tax Credit Maximum Amounts and Minimum Requirements for eEligible Spaceflight Projects in Florida

     

    Type of Tax Credit Documented in the Application for Certification

     

    Nontransferable Corporate Income

    Tax Credit

     

    Transferable Net Operating Loss

    Tax Credit

     

    Application Frequency per State Fiscal Year

    Once

    Once

    Nonrefundable Application Fee for Applications for Certification

    $250

    $250

    For Use in Taxable Year Beginning

    October 1, 2015

    October 1, 2015

    Maximum Tax Credit per Applicant and

    Maximum Tax Credits per Program

    $1,000,000/Applicant

    $3,000,000 Cumulative

    $2,500,000/Applicant

    $7,000,000 Cumulative

    Minimum Direct Jobs Created and Investment made during the Preceding 3-years1

    35 Jobs

    $15,000,000 in Investment

    35 Jobs

    $15,000,000 in Investment

    Maximum Percentage of Tax Liability for the Taxable Year in Which the Credit is Taken

    50%

    Not Applicable

    Timeframe for Net Operating Loss Tax Credit

    Not Applicable

    The immediate 3 taxable years before the transfer, but subsequent to July 1, 2011

    1 The job creation and investment requirement are per tax credit.  In order to claim both credits the Applicant must have created a minimum of 70 eligible jobs and must have invested at least $30,000,000 as a direct result of the Applicant’s eligible Florida Spaceflight Projects. The investment cannot be from the use of state funds.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(5), (6) FS. History–New _________.

     

    73A-5.004 Application Process for Approval Process to Earn Tax Credits or to Create Transferable Tax Credits.

    In addition to the approval process outlined in the Act Section 220.194, Florida Statutes, and this Chapter, Applications for Approval are subject to the following requirements:

    (1) In order to request a tax credit pursuant to under the Act and this Chapter, an Application for Approval must be submitted to DEO in accordance with the process established by this Chapter and the timelines established in Table 1 of Rule 73A-5.003, F.A.C.  All Applications for Approval that are submitted to DEO must include a written and positive recommendation from Space Florida addressing the Applicant’s likelihood of receiving a Letter of Approval from DEO.

    (2) Approval of any available tax credits shall be provided on a first-come, first-served basis, based on the date that an Applicant’s submitted completed application is date stamped as being received by DEO.  An Applicant may submit a hardcopy of their Application for Approval to DEO at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, or for applications submitted electronically the at:  http://www.floridajobs.org. The, time indicated on the electronic confirmation will serve as the Applicant’s date stamp.

    (3) Within 30 days of the date stamp, an application shall be reviewed by DEO for completeness and to determine whether the application contains all required information.  If necessary, this review will include an interview with the contact person listed on the application.

    (4) If it is determined DEO determines that all required information has been submitted, DEO it shall deem the application complete and have 60 days to approve begin the process of approving or denying the application.

    (5) If it is determined DEO determines that the Application for Approval is incomplete, DEO shall notify the Applicant by certified mail email, and advise the Applicant on what is missing from the application.  The Applicant shall have 30 days from the date of receipt, as indicated on the certified mail receipt, such email to correct any deficiencies and resubmit the Application for Approval for entry into the first-come, first-served application line.

    (6) Because the Act prevents credits from being approved after October 1, 2017, no Application for Approval will be accepted by DEO less than 60 days from this date.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(5) FS. History–New___________.

     

    73A-5.005.

    In addition to the process outlined in Section 220.194, Florida Statutes, and this Chapter, Applications for Approval are subject to the following:

    (1) An Applicant may submit an electronic copy of its Application for Approval to DEO for early review; however, the electronic copy must include the written and positive recommendation from Space Florida in order to be reviewed.   An application submitted for early review will not secure an Applicant’s place in the first-come, first-served application line.

    (2) DEO will not accept an incomplete placeholder application, but, following review of the application, will advise the Applicant of all known deficiencies for correction.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(7) FS. HistoryNew _________.

     

    73A-5.0056 Application Process for Certification Process to Take or Transfer Tax Credits.

    In addition to the application requirements in the Act section 220.194, Florida Statutes, and this Chapter, Applications for Certification are subject to the following:

    (1) In order to take or transfer tax credits pursuant to under the Act and this Chapter, an aApproved spaceflight business must submit an Application for Certification in accordance with the Act and the minimum requirements provided Section 220.194, Florida Statutes, within the timelines established in Table 21 of Rule 73A-5.003, F.A.C., and the minimum requirements established in Table 2 of Rule 73A-5.003, F.A.C. All Applications for Certification that are submitted to DEO must include a written and positive recommendation from Space Florida addressing the Applicant’s likelihood of receiving a Letter of Certification from DEO.

    (2) An Applicant must may submit a hardcopy of its Application for Certification along with the $250 nonrefundable application review fee to DEO at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399.

    (3) Within 30 days of its receipt, DEO shall review an Application for Certification for completeness and to determine whether the application contains all required information. Applications that do not include the $250 nonrefundable application review fee will not be reviewed. If necessary, the review will include an interview with the contact person listed on the Application for Certification.  Applications that do not include the $250 nonrefundable application review fee will not be reviewed.

    (4) If DEO determines that all the required information has been submitted, it shall deem the Application for Certification application complete and begin the process of approving or denying the application.

    (5) If DEO determines that the Application for Certification is incomplete, DEO shall notify the Applicant by certified via email, and advise the Applicant of what is missing from the application.  The Applicant shall have 30 days from the date of receipt, as indicated on the certified mail receipt, such email to correct any deficiencies and resubmit the Application for Certification.

    (6) DEO may approve an Application for Certification such a transfer in writing or via email, to an Applicant.

    (7) Once transferred, a Net Operating Loss Tax Credit may not be transferred again.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(5), (6) FS. History–New__________.

     

    73A-5.006007 Revocation or Modification of Certification to Take or Transfer Tax Credits.

    (1) At any time, DEO may revoke or modify the terms of its approval of an Application for a Certification Letter granting the eligibility for tax credits if it finds that the certified spaceflight business made a false statement or representation in any application, record, report, plan, or other document filed in an attempt to receive tax credits under the Act or this Chapter by issuingDEO shall notify the certified spaceflight business a Notice of its intent Intent to revoke or modify, as well as its reason(s) Deny an Application for doing so Certification, via certified mail.

    (2) Within 30 days of its receipt of such notice, the a Notice of Intent to Deny an Application for Certification a certified spaceflight business shall notify DEO in writing if it disputes such an action any allegation(s) contained in the Notice. TheIf the certified spaceflight business disputes the revocation or modification of the terms of its approved Application for Certification shall identify all of the allegations it must specifically identify the item(s) it disputes denies and provide an explanation for each specifically identified item explaining explain why it believes DEO’s determination is in error.

    (3) If the certified spaceflight business does not dispute such an action the Notice of Intent to Deny an Application for Certification within 30 days of the certified mail received date, the revocation or modification original notice shall become final and DEO shall issue the certified spaceflight business a Notice of Revocation or Modification.

    (4) A The certified spaceflight business may not use or transfer a tax credit once a revocation Notification of Revocation or modification of an approved Application for Certification Modification has become final been issued; unless: DEO, the DOR and the certified spaceflight business all agree in writing that the Notice of Revocation or Modification was in error.

    (a) DEO, DOR, and the certified spaceflight business, all agree in writing that the revocation or modification was in error; or,

    (b) The revocation or modification is found to be improper by the order of a court with proper jurisdiction to make such a finding.

    (5) DEO may notify DOR electronically that it has revoked or modified submit an electronic copy of a Notice of Intent to Deny an Application for Certification or a Notice of Revocation or Modification to the DOR.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(7) FS. HistoryNew_________.

     

    73A-5.008 Forms.

    (1) The following forms are prescribed for use with these rules and are incorporated by reference:

    (a) Form DEO/SBD194(1), Application for Approval, effective______________.

    (b) Form DEO/SBD194(2), Application for Certification, effective____________.

    (c) Form DEO/SBD194(3), Transfer Statement, effective ______________.

    (2) These forms may be obtained without cost from the Department of Economic Opportunity (DEO) at 107 E. Madison Street, Mail Station 80, Caldwell Building, Tallahassee, Florida 32399, or on DEO’s website:  http://www.floridajobs.org.

    Rulemaking Authority 220.194(8) FS. Law Implemented 220.194(7) FS. HistoryNew_________.

     

    The following changes have been made to the materials incorporated by reference:

     

    Form DEO/SBD194(1): This Form has changed to include statutorily required disclosures by the applicant.

     

    Form DEO/SBD194(2): This Form has changed to include statutorily required disclosures by the applicant.

    Form DEO/SBD194(3): This Form has changed to include statutorily required disclosures by the applicant.