The purpose of the proposed amendments to Rules 12-29.002 and 12-29.003, F.A.C., is to incorporate statutory changes made by Sections 10 and 13, Chapter 2019-42, L.O.F.

 

DEPARTMENT OF REVENUE

RULE NOS.:RULE TITLES:

12-29.002Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Transfer; Rescindment

12-29.003Florida Tax Credit Scholarship Program; Applications

PURPOSE AND EFFECT: The purpose of the proposed amendments to Rules 12-29.002 and 12-29.003, F.A.C., is to incorporate statutory changes made by Sections 10 and 13, Chapter 2019-42, L.O.F.

SUMMARY: Eligible contributions to an eligible nonprofit scholarship-funding organization must be made on or before the date taxpayers are required to file a return. Taxpayers may now apply for a credit beginning in January of the taxable year through the last day before the deadline for filing a return. Taxpayers, after earning a tax credit, may reduce any installment payment for the tax year in which the credit is granted.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will have an adverse impact on small business or likely increase directly or indirectly regulatory costs in excess of $200,000 in the aggregate within one year after the implementation of the rule. A SERC has not been prepared by the Agency.

The Agency has determined that the proposed rule is not expected to require legislative ratification based on the statement of estimated regulatory costs or if no SERC is required, the information expressly relied upon and described herein: 1) no requirement for the Statement of Economic Regulatory Costs (SERC) was triggered under Section 120.541(1), F.S.; and

2) based on past experiences regarding rules of this nature, the adverse impact or regulatory cost, if any, do not exceed nor would exceed any one of the economic analysis criteria in a SERC, as set forth in Section 120.541(2)(a), F.S.

Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.

RULEMAKING AUTHORITY: 213.06(1), 1002.395(13), FS.

LAW IMPLEMENTED: 92.525(1)(b), 211.0251, 212.1831, 213.37, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (5), (13), FS.

IF REQUESTED WITHIN 21 DAYS OF THE DATE OF THIS NOTICE, A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW (IF NOT REQUESTED, THIS HEARING WILL NOT BE HELD):

DATE AND TIME: October 16, 2019, 10:00 a.m.

PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1220, Tallahassee, Florida. If a meeting is requested in writing, members of the public can also attend electronically via webinar; registration information will be posted to the Department’s website at http://floridarevenue.com/publicmeetings.

Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tonya Fulford at [phone]. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).

THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Danielle Boudreaux, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone [phone], email [e-mail].

 

THE FULL TEXT OF THE PROPOSED RULE IS:

 

12-29.002 Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Transfer; Rescindment.

(1) Definitions. For purpose of this rule, the following terms mean:

(a) through (e) No change.

(f) “Eligible nonprofit scholarship funding organization” or “SFO” means a charitable organization as defined in section 1002.395(2), F.S. A list of SFOs, approved established by the Department of Education, is available at http://fldoe.org/schools/school-choice/k-12-scholarship-programs/sfo/ www.fldoe.org/school/school-choice.

(g) through (h) No change.

(2) No change.

(3) Applications for credit allocations.

(a) through (b) No change.

(c) Taxpayers are eligible to apply during the following periods to receive a credit allocation from each annual tax credit cap for the following taxes as follows:

1. Corporate Income Tax – A taxpayer may make an application for a credit allocation on the first business day of January of each calendar year for its tax year that begins during that calendar year. For tax years beginning before January 1, 2018, the application must be submitted on or before the last day of the taxpayer’s corporate income tax year. For tax years beginning January 1, 2018, or later, The the application must be submitted before the date the taxpayer is required to file its corporate income/franchise tax return for that tax year pursuant to section 220.222, F.S., including a valid extended due date.

a. Example: A calendar year taxpayer may apply for a credit allocation for the 2017-2018 state fiscal year credit beginning on January 3, 2017. The application must be submitted on or before December 31, 2017.

b. Example: A taxpayer with a tax year beginning December 1, 2017, and ending November 30, 2018, may apply for a credit allocation for the 2017-2018 state fiscal year beginning on January 3, 2017. The application must be submitted on or before November 30, 2018.

a. c. Example: A calendar year taxpayer may apply for a credit allocation for the 2018-2019 state fiscal year credit beginning on January 2, 2018. The application must be submitted before May 1, 2019; however, if the due date of the taxpayer’s corporate income/franchise tax return is validly extended, the application may be submitted before November 1, 2019.

b. d. Example: A taxpayer with a tax year beginning December 1, 2018, and ending November 30, 2019, may apply for a credit allocation for the 2018-2019 state fiscal year credit beginning on January 2, 2018. The application must be submitted before April 1, 2020; however, if the due date of the taxpayer’s corporate income/franchise tax return is validly extended, the application may be submitted before October 1, 2020.

2. Insurance Premium Tax – A taxpayer may make an application for a credit allocation on the first business day of January of each calendar year and before the due date of the insurance premium taxes and fees return, which is March 1 following the taxable year. Example: For the 2019-2020 state fiscal year tax credit cap, a taxpayer may submit an application for a credit allocation beginning on January 2, 2019. The application must be made on or before February 29, 2020. An application for a credit allocation may be made beginning on the first business day of January of each calendar year and may not be made after December 31 of that calendar year. Example: For the 2018-2019 state fiscal year tax credit cap, a taxpayer may submit an application for a credit allocation beginning on January 2, 2018. The application must be made on or before December 31, 2018.

3. No change.

(d) The Department will accept applications until either the tax credit cap is reached or until the end of the state fiscal year for sales and use tax, the tax on oil and gas production, and the excise taxes on liquor, wine, and malt beverages; until on or before the day the taxpayer’s insurance premium tax return is due the end of the tax year for insurance premium tax; or until the day before the due date of the taxpayer’s corporate income/franchise tax return for corporate income tax, whichever occurs first.

(4) No change.

(5) Tax Credits.

(a)1. Corporate Income Tax – A tax credit of 100 percent of the contribution against any corporate income tax due for the tax year is allowed. The amount of the tax credit for a tax year:

a. through b. No change.

c. Must be added back to taxable income in determining Florida corporate income tax due. For tax years beginning on or after January 1, 2018, If if the amount of a credit taken under section 220.1875, F.S., is added to federal taxable income on the Florida corporate income/franchise tax return in a previous tax year and is taken as a deduction for federal tax purposes in the current tax year, the amount of the federal deduction is not required to be added to federal taxable income on the Florida corporate income/franchise tax return in the current year. This provision ensures that the amount of the credit taken under section 220.1875, F.S., is added to federal taxable income in the applicable tax year and does not result in a duplicate addition in a subsequent tax year.

d. No change.

2. No change.

(b)1. Insurance Premium Tax – A tax credit of 100 percent of the contribution against any insurance premium tax due under section 624.509(1), F.S., for the tax year is allowed. The amount of the tax credit for a tax year is limited to the insurance premium tax due after deducting:

a. through b. No change.

c. Credits for income taxes paid under chapter 220, F.S., and the salary credit allowed under section Section 624.509(5), F.S., as these are limited by section 624.509(6), F.S. (the 65 percent limitation).

2. No change.

(c) through (e) No change.

(f) Contributions to an SFO are not payments of estimated tax or installment payments of tax. However, credits earned for contributions to an SFO made on or after July 1, 2014, for corporate income tax or insurance premium tax will be taken into account when determining the estimated payment amounts required to meet the prior year exceptions for each tax. Cross reference: rules 12C-1.034 and 12B-8.001, F.A.C.

(6) through (8) No change.

Rulemaking Authority 1002.395(13) F.S. Law Implemented 92.525(1)(b), 211.0251, 212.1831, 213.37, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (5), (13) FS. History–New 6-6-11, Amended 1-25-12, 7-28-15, 1-8-19,____.

 

12-29.003 Florida Tax Credit Scholarship Program; Applications.

(1) No change.

Form Number		Title	Effective Date
(2)(a) DR-116000		Florida Tax Credit Scholarship Program – Application for Tax Credit Allocation for Contributions to Nonprofit Scholarship-Funding Organizations (http://www.flrules.org/Gateway/reference.asp?No=Ref-      10165)	XX/XX 1/19
(b) through (c)		No change.

Rulemaking Authority 213.06(1), 1002.395(13) F.S. Law Implemented 92.525(1)(b), 211.0251, 212.1831, 213.37, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (5), (13) FS. History–New 6-6-11, Amended 1-25-12, 7-28-15, 1-17-18, 1-8-19,_____.

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Tammy Miller

NAME OF AGENCY HEAD WHO APPROVED THE PROPOSED RULE: Governor and Cabinet

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 24, 2019

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: August 21, 2019