Sections 21, 34, and 41, Chapter 2023-17, L.O.F., provide for a corporate income tax credit (s. 220.1878, F.S.) and insurance premium tax credit (s. 624. 51058, F.S.) for contributions to the Florida Housing Finance Corporation ....

 

DEPARTMENT OF REVENUE

RULE NOS.:RULE TITLES:

12-29.001Scope

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

12-29.003Public Use Forms

12-29.005The New Worlds Reading Initiative; Participation; Allocation; Carryforward; Transfer; Rescindment

12-29.006Live Local Program; Participation; Allocation; Carryforward; Transfer; Rescindment

PURPOSE AND EFFECT: Sections 21, 34, and 41, Chapter 2023-17, L.O.F., provide for a corporate income tax credit (s. 220.1878, F.S.) and insurance premium tax credit (s. 624. 51058, F.S.) for contributions to the Florida Housing Finance Corporation under the Live Local Program (s. 420.50872, F.S.). The purpose of the proposed amendments to Rule Chapter 12-29, F.A.C., is to provide for administration of the tax credits available under the Live Local Program.

SUMMARY: The proposed amendments to Rule 12-29.001, F.A.C. (Scope), provides that Rule Chapter 12-29, F.A.C., sets forth the rules to be used in administration of the tax credits available under the Live Local Program.

The proposed amendments to Rules 12-29.002, F.A.C. (Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Transfer; Rescindment), and 12-29.005, F.A.C. (The New Worlds Reading Initiative; Participation; Allocation; Carryforward; Transfer; Rescindment), reflect the order of the insurance premium tax credits to be received when receiving credits from the Florida Tax Credit Scholarship Program and the Live Local Program or the New Worlds Reading Initiative and the Live Local Program.

The proposed amendments to Rule 12-29.003, F.A.C. (Public Use Forms), adopt, by reference, the application to apply for an allocation of the available tax credit, the application to rescind previously allocated credit that has not been used, and the notice of the transfer of unused credit between members of the same affiliated group of corporations or transfer to another entity as a part of the transfer of all assets of the entity in the same transaction.

Proposed new Rule 12-29.006, F.A.C. (Live Local Program; Participation; Allocation; Carryforward; Transfer; Rescindment), provides for administration of the Live Local Program including eligibility criteria for qualified businesses to participate in the program, how to apply for an allocation of the available credit, requirements for contributions to the Florida Housing Finance Corporation to receive a tax credit, procedures for receiving credits against corporate income tax and insurance premium tax, and procedures to carryforward any unused tax credits for a period not to exceed ten years, to transfer any unused tax credits to another entity, and to rescind any unused tax credits.

SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS AND LEGISLATIVE RATIFICATION:

The Agency has determined that this will not 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), 402.62(7)(b), 1002.395(12)(b), 1003.485(7)(b) F.S., s. 34, Ch. 2023-17, LOF F.

LAW IMPLEMENTED: 211.0251, 211.0252, 211.0253, 212.1831, 212.1833, 212.1834, 213.06(1), 213.37, 220.1875, 220.1876, 220.1877, 402.62(5), 561.1211, 561.1212, 561.1213, 624.51055, 624.51056, 624.51057, 1002.395(5), 1003.485(5), (7) FS., ss. 21, 34, 41, Ch. 2023-17, LOF F.

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 12, 2023, 9:00 a.m.

PLACE: 2450 Shumard Oak Boulevard, Building One, Room 1221, Tallahassee, Florida 32399. If a meeting is requested in writing, members of the public can also attend electronically via webinar; participants will need to register for the webinar using the following link: https://attendee.gotowebinar.com/register/265558880189094743

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: Brinton Hevey, 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:

 

12-29.001 Scope.

(1) This rule chapter sets forth the rules to be used in the administration of tax credits for contributions made to the following:

(a)(2) No change.

(b) through (c) No change.

(d) The Florida Housing Finance Corporation under Section 420.50872, F.S., Live Local Program. That program allows taxpayers to receive a credit allocation for contributions made to the Florida Housing Finance Corporation.

(2)(3) No change.

Rulemaking Authority 213.06(1), 402.62(7)(b), 1002.395(12)(b), 1003.485(7)(b) F.S., s. 34, Ch. 2023-17, LOF. Law Implemented 211.0251, 211.0252, 211.0253, 212.1831, 212.1833, 212.1834, 220.1875, 220.1876, 220.1877, 402.62(5), 561.1211, 561.1212, 561,1213, 624.51055, 624.51056, 624.51057, 1002.395(5), 1003.485(5) FS. ss. 21, 34, 41, Ch. 2023-17, LOF  History–New 6-6-11, Amended 7-28-15, 1-8-19, 5-23-22,          .

 

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

(1) through (4) No change.

(5) Tax Credits.

(a) 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. Assessments made pursuant to Section 440.51, F.S. (workers’ compensation administrative assessments);

b. Credits for taxes paid under Sections 175.101 and 185.08, F.S. (firefighters’ and police officers’ pension trust funds);

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

d. The amount of the Strong Families Tax credit under Section 624.51057, F.S.; and

e. The amount of the Live Local Program credit under Section 624.51058, F.S.

2. No change.

(c) through (f) No change. 

(6) through (8) No change.

Rulemaking Authority 213.06(1), 402.62(7)(b), 1002.395(12)(b), 1003.485(7)(b) F.S., s. 34, Ch. 2023-17, LOF. Law Implemented 211.0251, 211.0252, 211.0253, 212.1831, 212.1833, 212.1834, 220.1875, 220.1876, 220.1877, 402.62(5), 561.1211, 561.1212, 561,1213, 624.51055, 624.51056, 624.51057, 1002.395(5), 1003.485(5) FS., s. 41, Ch. 2023-17, LOF. History–New 6-6-11, Amended 7-28-15, 1-8-19, 5-23-22,             .

 

12-29.003 Public Use Forms.

(1)(a) The following application forms and instructions are used by the Department in its administration of the Florida Tax Credit Scholarship program, Strong Families Tax Credit program, and The New Worlds Initiative Tax Credit program, and the Live Local program. These forms are hereby incorporated by reference in this rule.

(b) No change.

Form Number	Title	Effective Date
(2) through (4) No change.
(5)(a) DR-446000	Live Local Program – Application for Tax Credit Allocation for Contributions to the Florida Housing Finance Corporation (http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX)	XX/XX
(b) DR-446100	Live Local Program – Application for Rescindment of Previous Allocation of Tax Credit (http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX)	XX/XX
(c) DR-446200	Live Local Program – Notice of Intent to Transfer a Tax Credit (http://www.flrules.org/Gateway/reference.asp?No=Ref-XXXXX)	XX/XX

Rulemaking Authority 213.06(1), 402.62(7)(b), 1002.395(12)(b), 1003.485(7)(b) F.S., s. 34, Ch. 2023-17, LOF. Law Implemented 211.0251, 211.0252, 211.0253, 212.1831, 212.1833, 212.1834, 213.37, 220.1875, 220.1876, 220.1877, 220.1878, 402.62(5), 420.50872(3), 561.1211, 561.1212, 561.1213, 624.51055, 624.51056, 624.510.57, 624.51058, 1002.395(5), 1003.485(5) FS., ss. 21, 34, 41, Ch. 2023-17, LOF. History–New 6-6-11, Amended 1-25-12, 7-28-15, 1-17-18, 1-8-19, 12-12-19, 5-23-22,       .

 

12-29.005 The New Worlds Reading Initiative; Participation; Allocation; Carryforward; Transfer; Rescindment.

(1) through (4) No change.

(5) Tax Credits.

(a) 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. Assessments made pursuant to Section 440.51, F.S. (workers’ compensation administrative assessments);

b. Credits for taxes paid under Sections 175.101 and 185.08, F.S. (firefighters’ and police officers’ pension trust funds); and,

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

d. The amount of the Strong Families Tax Credit under Section 624.51057, F.S., the amount of the Live Local Program credit under Section 624.51058, F.S., and the Florida Tax Credit Scholarship Program credit under Section 624.51055, F.S.

2. No change.

(c) through (f) No change.

(6) through (8) No change.

Rulemaking Authority 213.06(1), 1003.485(7)(b) FS., s. 34, Ch. 2023-17, LOF. Law Implemented 211.0252, 212.1833, 220.1876, 561.1212, 624.51056, 1003.485(5) FS., s. 41, Ch. 2023-17, LOF. History–New 5-23-22,              .

 

12-29.006 Live Local Program; Participation; Allocation; Carryforward; Transfer; Rescindment.

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

(a) “Corporation” means the Florida Housing Finance Corporation as defined in Section 420.0004, F.S., and designated to administer the Live Local Program.

(b) “Affiliated group of corporations” is given the same meaning as the definition provided in Section 220.03(1)(b), F.S.

(c) “Contribution” or “eligible contribution” means a monetary contribution from a taxpayer to the corporation.

(d) “Credit allocation” means an allocation to a taxpayer of an annual tax credit cap authorized under the Live Local Program.

(e) “State fiscal year” means the annual period beginning July 1 through June 30 of the following year.

(f) “Tax credit cap” means the maximum annual tax credit amount that the Department is authorized by Section 420.50872, F.S., to allocate.

(2) Taxpayers eligible to participate in the program. Taxpayers who pay any of the following taxes may apply to the Department for a credit allocation:

(a) Florida corporate income tax imposed under Chapter 220, F.S.

(b) Florida insurance premium tax imposed under Section 624.509, F.S.

(3) Applications for credit allocations.

(a) To apply for an allocation of the available program credits, taxpayers must submit a Live Local Program – Application for Tax Credit Allocation for Contributions to the Florida Housing Finance Corporation (Form DR-446000, incorporated by reference in Rule 12-29.003, F.A.C.) to the Department.

1. Taxpayers required to file returns and remit payments by electronic means pursuant to Section 213.755, F.S., and Rule Chapter 12-24, F.A.C., must apply online using the Department’s website. When the application is completed and submitted online, a confirmation number will be provided with the date and time of submission.

2. The fastest and easiest way to apply for an allocation is online at floridarevenue.com/taxes/multitaxcredits. Taxpayers who are not required to file returns and remit payments by electronic means pursuant to Section 213.755, F.S., and Rule Chapter 12-24, F.A.C., may also apply by submitting a paper application with the Department.

(b) A separate application to receive a credit allocation is required for each tax credit cap year.

(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. 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 2024-2025 state fiscal year credit beginning on January 2, 2024. The application must be submitted before May 1, 2025; 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, 2025.

b. Example: A taxpayer with a tax year beginning December 1, 2024, and ending November 30, 2025, may apply for a credit allocation for the 2024-2025 state fiscal year credit beginning on January 2, 2024. The application must be submitted before April 1, 2026; 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, 2026.

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 2024-2025 state fiscal year tax credit cap, a taxpayer may submit an application for a credit allocation beginning on January 2, 2024. The application must be made on or before February 28, 2025.

(d) The Department will accept applications until either the tax credit cap is reached or until on or before the day the taxpayer’s insurance premium tax return is due; 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) Notification.

(a) The Department will approve credit allocations on a first-come, first-served basis. Following receipt of an application, the Department will send written correspondence regarding the amount of the credit allocation for each tax applied for, or the reason the credit allocation could not be approved.

(b) When the Department is not able to approve an application, a letter explaining the reason for the denial will be mailed to the taxpayer. The taxpayer may protest the denial pursuant to Sections 120.569 and 120.57, F.S. The Department will reserve the denied amount of the allocation for the taxpayer during the protest period.

(c) When approved, the Department’s approval letter will specify the period in which the contribution to the corporation must be made. Contributions must be made during the period specified in the approval letter. The corporation will issue the taxpayer a certificate of contribution signed by an authorized representative of the corporation containing:

1. Contributor’s name;

2. Contributor’s federal identification number;

3. Amount of contribution; and

4. Date of contribution.

(d) The amount of tax credit claimed on a tax return is limited to the amount of contribution contained in the certificate of contribution issued by the corporation. The taxpayer must make the contribution before the credit is claimed on a tax return.

(e) No tax credit will be allowed when a taxpayer:

1. Fails to make the designated contribution;

2. Fails to make a contribution before claiming the tax credit on a tax return;

3. Claims the credit against tax due prior to the date the contribution is made; or

4. Makes the contribution outside the period specified in the Department’s approval letter.

(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. Is taken in the order of the credits provided against the corporate income tax in Section 220.02(8), F.S.

b. Must be reduced by the difference in federal corporate income tax due computed with the credit and without the credit.

c. Must be added back to taxable income in determining Florida corporate income tax due. If the amount of a credit taken under Section 220.1878, 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 220.1878, 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. Is revoked and rescinded when a taxpayer applies for a credit allocation after timely requesting an extension of time in which to file its Florida corporate income/franchise tax return and fails to remit sufficient tentative tax, such that its extension is not valid under Sections 220.222 and 220.32, F.S.

2. Taxpayers must attach a copy of the certificate of contribution from the corporation to the Florida corporate income/franchise tax return on which the credit allocation, or a portion of the credit allocation, is taken as a tax credit.

(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. Assessments made pursuant to Section 440.51, F.S. (workers’ compensation administrative assessments);

b. Credits for taxes paid under Sections 175.101 and 185.08, F.S. (firefighters’ and police officers’ pension trust funds); and,

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

d. The amount of the Strong Families Tax Credit under Section 624.51057, F.S.

2. Taxpayers must attach a copy of the certificate of contribution from the corporation to the tax return on which the credit allocation, or a portion of the credit allocation, is taken as a tax credit.

(c) Contributions to the corporation are not payments of estimated tax or installment payments of tax. However, credits earned for contributions to the corporation 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) Carryforward of unused credits.

(a) When a taxpayer is unable to use a tax credit during the period specified by the Department in the approval letter, because the taxpayer’s liability is insufficient, the taxpayer may carry forward the unused tax credit amount for a period not to exceed ten years.

(b) Examples.

1. Corporate Income Tax Example – A calendar year taxpayer applied for and was approved for a credit allocation against corporate income tax for the tax year ending December 31, 2024. Any unused carryforward from its tax year ending December 31, 2024, expires on the due date pursuant to Section 220.222, F.S., for the Florida corporate income/franchise tax return for the taxable year ending December 31, 2034.

2. Insurance Premium Tax Example – A taxpayer applied for and was approved for a credit allocation against insurance premium tax due for calendar year 2024. Any unused carryforward from its tax year ending December 31, 2024, expires on December 31, 2034.

(7) Transfers of unused tax credits.

(a) A taxpayer may not convey, assign, or transfer a credit allocation or tax credit to another entity unless all of the assets of the taxpayer are conveyed, assigned, or transferred in the same transaction. However, the following credit allocations or tax credits may be transferred between members of the same affiliated group of corporations:

1. A tax credit allocation for which a contribution has not been made to the corporation by the transferring member. The receiving member must make a contribution to the corporation during the same period that the transferring member was required to make the contribution. In addition, the contribution must be made before the receiving member may claim the tax credit.

2. A tax credit allocation for which a contribution has been made to the corporation by the transferring member, but the tax credit has not been claimed on a tax return.

3. A carryforward tax credit amount that has not been claimed on a tax return.

(b) A transferred credit allocation or tax credit may only be used against the same tax as the original credit allocation or tax credit approved by the Department.

(c) A transferred tax credit may only be taken by the receiving member of the affiliated group during the same period that the transferring member was approved to take the credit.

(d) A transferred carryforward amount may only be taken as a tax credit during the same time period as the transferring member was authorized to take the carryforward tax credit amount.

(e)1. A taxpayer must notify the Department of its intent to transfer a credit allocation or tax credit to another member of its affiliated group by submitting Live Local Program – Notice of Intent to Transfer a Tax Credit (Form DR-446200, incorporated by reference in Rule 12-29.003, F.A.C.). A separate notice must be submitted for each member of an affiliated group of corporations receiving a transfer.

2. Taxpayers must submit an application for transfer of any unused credit allocation or tax credit to:

Florida Department of Revenue

Revenue Accounting

P.O. Box 6609

Tallahassee, FL 32314-6609

(f) The Department must approve the application for transfer of the unused credit allocation or tax credit before the receiving member may claim the tax credit on a tax return. 

(g) Following receipt of an application, the Department will send written correspondence approving the transfer or providing the reason the transfer could not be approved. The taxpayer may protest the denial pursuant to Sections 120.569 and 120.57, F.S.

(h) If the transfer is approved, a copy of the approval letter will be sent to both the transferring member and the receiving member. The approval letter will include instructions on how the receiving member may claim the tax credit on a tax return.

(8) Rescindment of unused tax credits.

(a) The rescindment provision allows credit allocations that will not be used by the taxpayer to be reallocated to other taxpayers who may use the credit allocation. Taxpayers must apply online using the Department’s website at floridarevenue.com or submit a Live Local Program – Application for Rescindment of Previous Allocation of Tax Credit (Form DR-446100, incorporated by reference in Rule 12-29.003, F.A.C.) to the Department to rescind all or a portion of an unused credit allocation. See paragraph (3)(a) for submitting the application to the Department.

(b) An application for rescindment of the unused credit allocation by the Department will not be approved when:

1. The amount of credit allocation requested to be rescinded has been claimed as a credit on a previously filed return; or

2. The allocation year is closed for all taxpayers. The allocation period for a calendar year is closed for all taxes and all taxpayers on October 1 of the third year following the January 1 opening of the allocation period, regardless of whether the annual tax credit cap has been reached. For example, the allocation period beginning January 1, 2024, for the state fiscal year beginning July 1, 2024, closes for all taxpayers on October 1, 2026.

(c) Following receipt of an application, the Department will send written correspondence regarding the amount of the rescindment, or the reason rescindment could not be approved. The taxpayer may protest the denial pursuant to Sections 120.569 and 120.57, F.S.

(d) When the approval of a rescindment allows the tax credit cap for a state fiscal year to be reopened and available for allocation, the Department will notify the corporation that the tax credit cap is available for allocation.

Rulemaking Authority 213.06(1), FS., s. 34, Ch. 2023-17, LOF. Law Implemented ss. 21,34,41, Ch. 2023-17, LOF. History–New               .  

 

NAME OF PERSON ORIGINATING PROPOSED RULE: Brinton Hevey

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

DATE PROPOSED RULE APPROVED BY AGENCY HEAD: September 18, 2023

DATE NOTICE OF PROPOSED RULE DEVELOPMENT PUBLISHED IN FAR: June 30, 2023