March 2024

Farm Tax Exempt Agricultural Materials (TEAM) Card Program: On February 10, 2024, the Florida Department of Revenue (Department) issued Tax Information Publication No.: 24A01-01 addressing the new TEAM Program, which is effective January 1, 2024. As the Department noted in this Publication, the Department has begun issuing TEAM Cards to farmers who applied to and were approved by the Department. The Department further noted that those TEAM Cards provide a different method for qualifying farmers to claim certain sales tax exemptions provided under Florida law on items purchased for agricultural use. Farmers who have been issued a TEAM Card can present the plastic, wallet-sized card to selling dealers instead of preparing a paper exemption certificate for each purchase. The Department noted that farmers who do not qualify for a TEAM Card or do not wish to obtain a TEAM Card may continue to provide an exemption certificate to purchase items for agricultural purposes tax-exempt; and the exemption certificate must contain the purchaser's name and address, the reason the item qualifies for exemption, and the signature of the purchaser or an authorized representative of the purchaser. The Department also noted in this Publication that selling dealers are required to document the exempt nature of their tax-exempt sale, and dealers who make a tax-exempt sale to a qualified farmer who presents a TEAM Card are required to obtain a copy of the farmer's TEAM Card for purposes of documenting exempt sales to the farmer during the effective period of the Card. The Department also noted in this Publication that a selling dealer who accepts the TEAM Card in good faith will not be liable for any tax due on sales made to a farmer during the effective period indicated on the Card. Further, instead of obtaining a copy of the farmer's TEAM Card, a selling dealer, according to the Department, may document the exempt sale by requesting a transaction authorization number, valid for a single transaction only, from the Department prior to the time of sale. Additionally, with respect to selling dealers who make sales to a purchaser who presented an exemption certificate for items purchased for agricultural use, the Department noted in this Publication that the dealer only is required to obtain one certificate for sales made for the purposes indicated on the certificate, and that selling dealers are not required to obtain an exemption certificate for subsequent sales made to the same purchaser for the exempt purposes indicated on that certificate. Contact information is provided in this Publication for questions. More information can be found here.

February 2024

2024 Governmental Leasehold Intangible Tax Valuation Table: On January 12, 2024, the Florida Department of Revenue (Department) published Tax Information Publication No: 24C02-01 which includes the 2024 governmental leasehold intangible tax valuation factor table. In this Publication, the Department states that Florida law requires that all leasehold estates or related possessory interest in property of the United States, the State of Florida, or any of its political subdivisions or other governmental units are taxed as intangible personal property under certain circumstances. The Department further states in this Publication that these leaseholds are taxed as intangible personal property if the leased property is undeveloped or predominantly used for residential or commercial purposes and rental payments are due in consideration of the leasehold estate or possessory interest. Further, the Department states that unless the leasehold estate qualifies for specific exemptions, lessees of governmentally owned property are required to file an annual intangible tax return. The Department also states in this Publication that the just value of a lessee's leasehold estate or possessory interest reported on the tax return is determined by the rent payments for the remaining term of the lease, at the Federal Reserve-Atlanta-discount rate on the last business day of the previous year, plus one percent. This Publication also includes contact information for the purposes of submitting questions to the Department. More information can be found here.

January 2024

Multi-Tax Credits Available for Fiscal Year 2024-2025: The Florida Department of Revenue (Department) recently published Tax Information Publication No: 23ADM-05 addressing the allocation of multi-tax credits available for the State's fiscal year 2024-2025. According to this Publication, those multi-tax credits include the Live Local Program, the New Worlds Reading Initiative, the Strong Families Program, and the Florida Tax Credit Scholarship Program. The Publication also sets forth the credit caps associated with each of those Programs. The Department states in the Publication that the fastest and easiest way to apply for a tax credit allocation is online, and then provides in the Publication the links for the various Programs. Additionally, a webpage link is provided in the Publication for additional information regarding Tax Incentives for Businesses. More information can be found here.

November 2023

Interest Rate for January 1 through June 30, 2024: The Florida Department of Revenue (Department) recently issued Tax Information Publication No: 23ADM-04 addressing the floating rate of interest for the period beginning January 1, 2024, through June 30, 2024. In this Publication, the Department states that the rate of interest for that period is 12 percent, with such rate being subject to change effective July 1, 2024. The Department in this Publication sets forth various examples as to the calculation of the interest rate, as well as addresses the various taxes that are subject to this interest rate. More information can be found here.

October 2023

Sales Tax Rate Reduction on Real Property Rentals: On September 25, 2023, the Florida Department of Revenue (Department) issued Tax Information Publication No: 23A01-20 (Publication) announcing that effective December 1, 2023, the state sales tax rate imposed under Florida law on the total rent charged for renting, leasing, letting, or granting a license to use real property (commercial rentals) is reduced from 5.5 percent to 4.5 percent. The Department stated in this Publication that some examples of real property rentals subject to tax under Florida law include rentals for commercial office or rental space, warehouses, and self-storage units or mini-warehouses. The Department also noted that total rent charged includes all consideration due and payable by the tenant for the privilege or right to use or occupy the real property. Further, the Department stated that the local option discretionary sales surtax imposed by the county where the real property is located continues to apply to the total rent charged. Further, the Department noted that the reduced state sales tax rate on commercial rentals does not apply to the tax rate imposed on parking or storage of motor vehicles, docking or storage of boats, or tie-down or storage of aircraft. More information can be found here.

September 2023

Motor Fuel Tax Rate Adjustments: In August 2023, the Florida Department of Revenue (Department) issued Tax Information Publication No: 23B05-02 addressing adjustments in the fuel tax rates for the period from September 1, 2023, through December 31, 2023. According to this Publication, the minimum statewide motor fuel tax rate decreased from 35.225 cents per gallon to 26.325 cents per gallon during that time period. The Publication stated that the inspection fee on motor fuel will remain at 0.125 cents per gallon. This Publication also references the local option rates that vary by county, as well as the rate to be collected by terminal suppliers. Additionally, the Publication noted that due to the reduction in the statewide gasoline rate, wholesalers that purchase fuel in August 2023, and carry that inventory into September 2023, will pay an additional 0.089 cents per gallon; likewise, a wholesaler's inventory that is purchased in December 2023, and carried over to January 2024, will receive an additional 0.089 cents per gallon when the fuel is sold. More information can be found here.

August 2023

Adoption of 2023 Internal Revenue Code: On July 28, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No: 23C01-04, entitled "Adoption of 2023 Internal Revenue Code." As noted in the Publication, the Florida Legislature must consider each year the adoption of the current Internal Revenue Code to ensure certain tax definitions and the calculation of adjusted federal income will be consistent between the Internal Revenue Code and the Florida Income Tax Code. The Publication noted that the Florida corporate income tax "piggybacks" federal income tax determinations and uses adjusted federal income as the starting point for computing Florida's net income. The Publication then noted that as a result of a 2023 law enacted in Florida, the Florida Income Tax Code was amended so as to adopt the federal Code retroactively to January 1, 2023, meaning that Florida will continue to follow the computation of federal taxable income. However, Publication also noted that the Florida Income Tax Code requires modifications in certain areas to the federal taxable income, including in areas such as bonus depreciation, depreciation for qualified improvement property placed in service on or after January 1, 2018, business meal expenses, and film, television and live theatrical production expenses. The Publication then reviews specific information regarding the allowance and application of certain tax credits. More information can be found here.

July 2023

Sales Tax Exemption for Building Materials Used in Affordable Housing Construction: On July 5, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No.: 23A01-17, entitled Exemption for Building Materials Used in Construction of Eligible Residential Units for Affordable Housing. As noted in this Publication, and effective July 1, 2023, the Department stated that building materials used to construct eligible residential units for affordable housing are exempt from Florida sales and use tax; and that this exemption is available only through a refund of previously paid sales and use tax and only applies to sales of building materials that occur on or after July 1, 2023. The Publication then sets forth the definition of "affordable housing development", "building materials", "eligible residential units", and "newly constructed". The Department states in this Publication that a refund may be claimed by the person who owns the eligible residential unit at the time it is substantially completed; or by a municipality, county, or other governmental unit or agency, or nonprofit community-based organization if the materials are paid for from the funds of a community development block grant, the State Housing Initiatives Partnership Program, or a similar grant or loan program. The Department further states in the Publication that only one exemption through a refund of previously paid taxes may be claimed for any eligible residential unit. Further, the Department notes that a refund will not be granted unless the amount to be refunded exceeds $500; and, in addition, the refund may not exceed the lesser of $5,000 or 97.5 percent of the Florida sales or use tax paid on the cost of building materials. The Publication then sets forth the forms to be used and submitted for a refund to the Department. More information can be found here.

June 2023

E-Verify System Requirements Effective July 1, 2023: On June 15, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No: 2373B-01 addressing E-Verify System requirements effective July 1, 2023. In this Publication, the Department stated that Florida public agencies and private employers with 25 or more employees are required to use E-Verify effective July 1, 2023. As referenced in this Publication, E-Verify is an internet-based application operated by the U.S. Department of Homeland Security that allows employers to electronically verify employment eligibility of newly hired employees. An employer must verify each new employee's employment eligibility within three business days of the new employee working for salary, wages, or other remuneration. This Publication also reviews the applicability of the E-Verify System to employee leasing companies, as well as addressing other responsibilities of agents and management companies. The Publication states that the Florida Department of Commerce (known prior to July 1, 2023, as the Florida Department of Economic Opportunity) is required to issue a fine of $1,000 per day if it is determined that the E-Verify System was not used three times in a 24-month period; and that the fine will continue to accrue until the employer demonstrates compliance with the law. More information can be found here.

May 2023

Floating Interest Rate of 11 Percent: On May 3, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No: 23ADM-01 addressing the floating rate of interest applicable under Florida law with respect to deficiencies (underpayments), late payments, and overpayments of most taxes and fees based on the adjusted prime rate charged by banks. The Department states in this Publication that the rate of interest for the period July 1, 2023, through December 31, 2023, is 11 percent, and the daily interest rate factor to be used for this period is 0.000301370. This rate is subject to change effective January 1, 2024, according to this Publication. With respect to overpayments, the Department states in this Publication that interest on overpayments of tax is not applicable to reemployment tax; and further, interest on overpayments generally begins to accrue on the 91st day after the Department receives a completed application for refund. The Department in this Publication also sets forth a list of taxes to which this interest applies, together with a few examples to assist in calculating the penalty under certain circumstances. More information can be found here.

April 2023

Solid Mineral Tax Rates for 2023: On April 7, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No.: 23B07-01 setting forth the tax rate per ton for phosphate rock producers as well as heavy minerals producers for the tax period beginning January 1 through December 31, 2023. The tax rate for phosphate rock producers for 2023 according to this Publication is $1.61 per ton, and the tax rate for heavy minerals producers is $3.80 per ton. The Publication stated that there is no change in the tax rate for the production of other solid minerals, and such tax remains at eight percent of the taxable value of other solid minerals produced. This Publication provided contact information if there are questions regarding these announcements. More information can be found here.

March 2023

Electronic Filing of Florida Partnership Information Return: On March 7, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No: 23C01-01, advising that for the tax years beginning on or after January 1, 2022, the Florida Partnership Information Return may be filed electronically. According to this Publication, electronic filing of Form F-1065 is available through the Internal Revenue Service's Modernized e-File federal/state program using approved software. The Publication also states that every partnership doing business, earning income, or existing in Florida that has a partner subject to the Florida Corporate Income/Franchise Tax must file the Florida Form F-1065. Further, the Publication states that a limited liability company is considered a partnership if classified as a partnership for federal income tax purposes. The Publication sets forth various contact information for questions. More information can be found here.

February 2023

2023 Governmental Leasehold Intangible Tax Valuation Factor Table: On January 6, 2023, the Florida Department of Revenue (Department) issued Tax Information Publication (TIP) No. 23C02-01, addressing the governmental leasehold intangible tax valuation factor for 2023. As stated in this TIP, Florida law provides that all leasehold estates or related possessory interests in property of United States, the State of Florida, or any political subdivisions or other governmental units are taxed as intangible personal property if the leased property is undeveloped or predominantly used for residential or commercial purpose and rental payments are due in consideration of the leasehold estate or possessory interests. Unless an exemption applies, lessees of governmentally owned property are required to file an annual intangible tax return. The TIP also states that the just value of a lessee's leasehold estate or possessory interests reported on that return is determined by the rent payments for the remaining term of the lease, at the Federal Reserve-Atlanta discount rate on the last business day of the previous year plus 1 percent. This TIP includes a valuation factor table for the 2023 intangible property tax return. Contact information for the Department is included in the TIP for submitting written questions to the Department More information can be found here.

January 2023

Revised 2023 Fuel and Related Tax Rates: On November 7, 2022, the Florida Department of Revenue (Department) issued Tax Information Publication (TIP) #22B05-06 regarding fuel tax rates and related information adjusted beginning January 1, 2023. The TIP includes not only fuel tax rates for 2023, but also collection allowance, refund, and pollutants tax rate information for the new year. More information can be found here.

October 2022

Hurricane Ian Resulted in Suspension of Second Installment Payment for Estimated Taxes: Among the multitude of emergency measures issued by the State of Florida in regard to Hurricane Ian, the Florida Department of Revenue (Department) issued Emergency Order No. 22-001 on September 27, 2022. That Emergency Order suspended various time requirements for certain local governmental agencies with respect to millage hearings, budgets and many other deadlines. Additionally, the Order suspended the September 30, 2022, due date for the second installment payment for those taxpayers who have elected to pay the applicable taxes by the installment method. The Department states in this Order that the tax collector is authorized to accept the September 30 installment payment and allow the taxpayer a discount applicable to the installment payment through and including October 14, 2022. More information can be found here.

September 2022

Electronic Digital Signatures: On August 24, 2022, the Florida Department of Revenue (Department) issued Tax Information Publication No: 22ADM-07, addressing the use of electronic digital signatures. This Publication stated that the Department accepts electronic digital signatures, because they have the same force and effect as a written signature under Florida law. As noted in this Publication, taxpayers and their representatives may use established, secured messaging systems to submit documents with electronic signatures, such as a power of attorney form or other documents that must be signed. As further noted in this Publication, the Department will accept images with signatures (scanned or photographed) in any of the following file types: TIFF, JPG, JPEG, PDF (Adobe Reader), Microsoft Office suite, or ZIP. Accepted electronic digital signatures, according to the Publication, are those using encryption techniques that provide proof of original and unchanged documentation in one of those file types. Further, the Publication states that Department employees may use electronic digital signatures when signing documents sent to taxpayers or authorized representatives. More information can be found here.

August 2022

Emergency Sales/Use Tax Rule for Purchase of Farm Trailer: The Florida Department of Revenue (Department) recently published Emergency Rule No. 12AER22-11, effective July 1, 2022, implementing changes to the exemption from the sales/use tax with respect to certain agricultural production items. The Department's preamble to this Emergency Rule provides that the Rule implements changes to the exemption from the sales/use tax for the purchase of a trailer by a farmer for agricultural production or to transport farm products from the farm to the place where the farmer transfers ownership of the farm products to another, as well as the new exemption from tax for purchases of materials used to construct or repair fencing used in agricultural production. The text of this Emergency Rule can be found here.

June 2022

Sales Tax Holidays and Electronic Filing Threshold Change: The Florida Department of Revenue (Department) has recently issued notices regarding sales tax holidays including the following: (i) Tax Information Publication #22A01-08 announcing that a sales tax holiday for back-to-school supplies begins July 25, 2022, and ends August 7, 2022, as described in that TIP; and (ii) effective September 3, 2022, and ending September 9, 2022, a sales tax holiday for tools commonly used by skilled trade workers will be effective, as described in TIP #22A01-09. Additionally, the Department announced in TIP #22ADM-06 that beginning January 1, 2023, taxpayers must file tax returns and remit payments of taxes and fees electronically if the tax amount paid in the prior state fiscal year (July 1 through June 30) is $5,000 or more, which is a reduction in the threshold from the previous $20,000.

May 2022

Corporate Income Tax – Adoption of 2022 Internal Revenue Code and Tax Rate: On May 9, 2022, the Florida Department of Revenue (Department) issued Tax Information Publication (TIP) No: 22C01-03 addressing actions in 2022 by the Florida Legislature in adopting the Internal Revenue Code retroactively to January 1, 2022, such that the Department will follow the computation of federal taxable income with several modifications. Those modifications, according to the TIP, included areas such as bonus depreciation under Section 168(k) of the Code; qualified improvement property as referred to in Section 168(e)(6) of the Code; the deductibility of certain business meal expenses; and the amount of deduction to be taken with respect to film, television, and live theatrical production expenses. Additionally, the TIP stated for taxable years beginning on or after January 1, 2022, the Florida corporate income/franchise tax rate is 5.5 percent. More information can be found here.

April 2022

Solid Mineral Tax Rates for 2022: On March 21, 2022, the Florida Department of Revenue (Department) issued Tax Information Publication No: 22B07-01 which sets forth the severance tax rates for phosphate rock producers, heavy mineral producers, and other solid minerals producers. This Publication sets the severance tax rate for the period through December 31, 2022, on a per ton basis. The Publication further states that questions should be addressed in writing to the Department, Taxpayer Services, at the address set forth in the Department's Publication. More information can be found here.

March 2022

Tax Credit Associated with New Worlds Reading Initiative: The Florida Department of Revenue (Department) issued on February 7, 2022, Tax Information Publication No: 22ADM-O1 discussing the method for receiving a tax credit for monetary contributions to the administrator of the New Worlds Reading Initiative or to those eligible charitable organizations of the Strong Families Tax Credit. This Publication states contributions to the foregoing programs are eligible to receive a dollar-for-dollar credit against the following Florida taxes: corporate income tax; excise tax on liquor, wine, and malt beverages; gas and oil production tax; insurance premium tax; and use tax due under a direct pay permit. The Publication further states that taxpayers who wish to participate in either of these programs must apply to the Department to receive a tax credit allocation; and the fastest and easiest way to apply for a tax credit allocation according to this Publication is by visiting the Department’s multi-tax credit webpage at floridarevenue.com/taxes/multitaxcredits. The Publication, which includes various conditions and requirements for receiving the credit, can be found here.

February 2022

Internship Tax Credit For Corporate Income/Franchise Tax: The Florida Department of Revenue (Department) recently issued Tax Information Publication No.: 22C01-01 addressing the benefits and requirement of the Florida Internship Tax Credit Program (Program). As noted by the Department in this Publication, the Program allows a credit for up to five student interns for taxable year per corporation, during the 2022 and 2023 calendar years, with a credit amount of $2,000 per student intern (maximum of $10,000 for each taxable year). To be eligible for the Program, a corporation must be a "qualified" business, which means, according to the Publication, a corporation currently in existence and has been continuously operating for at least three years employing at least one qualified student intern in the 2022 or 2023 taxable years (at least 30 hours per week) for at least nine consecutive weeks. Additionally, and as noted in the Publication, the corporation must (i) show that 20 percent or more of its full-time employees were previously employed by the business as student interns, or (ii) have employed ten or fewer full-time employees on average for three immediately preceding taxable years and have previously hired at least one student intern. As further noted in the Publication, a qualified student intern is a person who has completed at least 60 credit hours at a state university or a Florida College System institution; is enrolled in a career center operated by a Florida school district or a charter technical career center; or is enrolled as a graduate student at a state university in Florida. The student intern must also satisfy other conditions as set forth in the Publication. The Department states in the Publication that verification and approval of tax credits will be made on a first-come, first-served basis, with a total of $2.5 million in credits available for each of the two years in the Program. More information can be found here.

January 2022

Peer-to-Peer Car-Sharing Programs Required to Register and Collect/Remit Sales Tax: On December 21, 2021, the Florida Department of Revenue (Department) issued Tax Information Publication (TIP) No: 21A01-14 which provides that, beginning January 1, 2022, when a motor vehicle is rented through a peer-to-peer car-sharing program, the peer-to-peer car-sharing program must collect and remit the applicable tax and rental surcharge due in connection with the rental. The TIP defines a peer-to-peer car-sharing program as, "a business platform that enables peer-to-peer car sharing by connecting motor vehicle owners with drivers for financial consideration." The TIP states that a peer-to-peer car-sharing program is required to register to collect sales tax, discretionary sales surtax and the rental car surcharge applicable to motor vehicles rented through the peer-to-peer car-sharing program. The peer-to-peer car-sharing program is also required to submit a registration application for each county in which the business is located. More information can be found here.

October 2021

Sales Tax Exemption for Certain Independent Living Items: On October 18, 2021, the Florida Department of Revenue (Department) issued Tax Information Publication No: 21A01-11 addressing a new sales tax exemption which begins as of January 1, 2022 that will assist in independent living. According to this Publication, the items listed in that Publication are exempt from sales tax when purchased for noncommercial home or personal use. The Publication states that purchases of these items by business, including medical institutions and assisted living facilities, are subject to sales tax. More information can be found here.

September 2021

2021 Corporate Income Tax Rate Reduction Confirmed: In our August 2021 edition of this newsletter, reference was made to the Florida Department of Revenue (FDOR) addressing the temporary rate reduction for taxable years beginning on or after January 1, 2021 and before January 1, 2022. The anticipated income tax rate was predicted to likely be 3.535 percent for those tax years. The FDOR has just recently issued Tax Information Publication No: 21C01-02 dated September 14, 2021, confirming that the reduced corporate tax rate for those tax years will be 3.535 percent. The FDOR affirms in this Publication that taxpayers having a 52-53 taxable year beginning on or about January 1 and ending on or about December 31 have the same tax rates as a calendar year-end taxpayer. Further, the Publication states that interest and penalties are not imposed on estimated payments if they meet the criteria set forth in the Publication. The FDOR notes in this Publication that for tax years beginning on or after January 1, 2022 the standard rate will revert back to 5.5 percent unless in the meantime FDOR has posted an additional Publication with different future tax rates. More information can be found here.

August 2021

Adoption of 2021 IRC for Florida Corporate Income Tax Purposes: On July 30, 2021, the Florida Department of Revenue (Department) issued Tax Information Publication No. 21C01-01. The publication addressed the recent legislation enacted by the Florida Legislature which amends the Florida Income Tax Code so as to adopt the Internal Revenue Code retroactively to January 1, 2021, but which also decouples the Florida Income Tax Code from several federal income tax provisions. The publication also highlighted various issues that corporate taxpayers may face in preparing the Florida Corporate Income/Franchise Tax Return as a result of some of the decoupled federal income tax provisions. Additionally, it noted that some taxpayers may have already filed a Florida Corporate Income/Franchise Tax Return under a different basis than what is explained in this Publication; and, if so, those taxpayers should consider filing an Amended Return, Form F-1120X, and explain the reason for the amendment. The publication stated that the Department will work with the taxpayer to resolve any penalty that may be imposed as a result of the amended return involving the issues discussed in the publication. Those issues include, but are not limited to, the limit on net interest deductions; the federally deducted depreciation of qualified improvement property; business meal expenses; film, television, and live theatrical production expenses; and bonus depreciation. Additionally, the publication addressed the manner in which Florida net operating losses are to be treated for Florida income tax purposes; and, on August 13, 2021, the Department issued a revised publication No. 21C01-01R, correcting the explanation of the use of Florida net operating losses. More information, as contained within that revised publication, can be found here.

Rounding for Sales Tax Purposes: As a result of a new law, Chapter 2021-2, Laws of Florida, businesses that collect and remit sales and use taxes to the Department must use a rounding algorithm in place of the previous "bracket system" when calculating the sales tax due on a transaction. Using this algorithm, the computation of the tax must be carried to the third decimal place; if the third decimal place is greater than four, the tax must be rounded up to the next cent. Businesses may apply the rounding algorithm to the aggregate tax amount computed on all taxable items on an invoice or to the taxable amount on each individual item on the invoice. The new law takes effect July 1, 2021, and businesses have until September 30, 2021 to update their point of sale systems. More information can be found here.

2021 Corporate Income Tax Rate Reduction: The standard rate for the Florida Corporate Income Tax is 5.5 percent. However, a temporary tax rate reduction can be triggered when corporate income tax revenue exceeds certain revenue forecasts. Consequently, and as the result of greater than expected revenue in recent years, the corporate income tax rate has been temporarily reduced during those years to 4.4580 percent. Further, and most recently on August 17, 2021, the Revenue Estimating Conference for the General Revenue Fund issued an Executive Summary stating that through June 2021 the revenue collections had exceeded expectations; and, apart from the sales tax, the greatest gain to the forecasts was from the corporate income tax. As a result, the Conference stated in that Summary that the temporary rate reduction is again triggered for taxable years beginning on or after January 1, 2021, and before January 1, 2022. According to information issued by that Conference, the further reduced corporate income tax rate appears to be 3.5350 percent for those tax years beginning on or after January 1, 2021 and before January 1, 2022. Taxpayers are nevertheless cautioned to await an official statement from the Department regarding the rate reduction amount. More information can be found here and here.

July 2021

2021 Sales Tax Holiday: On July 7, 2021, the Florida Department of Revenue (Department) issued Tax Information Publication #21A01-08 announcing a sales tax holiday for the period from Saturday, July 31, 2021 to Monday, August 9, 2021. According to this Publication, and during this sales tax holiday, Florida law directs that no sales tax or local option tax will be collected on purchases of clothing, footwear, and certain accessories for $60 or less per item; purchases of certain school supplies selling for $15 or less per item; and the first $1,000 of the sales price of personal computers and certain computer-related accessories, when purchased for noncommercial home or personal use. Additionally, attached to the Department's Publication are specific examples of the exempt clothing and accessories, school supply items, and computers and computer-related accessories. Examples of taxable items are also included. More information can be found here.

Emergency Rule Requiring Electronic Filing/Payment of Sales Taxes: The Department has promulgated an emergency rule effective July 1, 2021 which provides that a marketplace provider that is a dealer under Florida Statutes Chapter 212, as amended as referenced in that Rule, and a person who is required to collect and remit sales tax on remote sales, must timely file Florida sales and use tax returns and remit sales tax and discretionary sales surtax to the Department by electronic means. This emergency rule, designated as Rule No. 12ER21-6, can be found here.

June 2021

Indexed Tax Amounts Increased: Florida Department of Revenue (Department) has issued Tax Information Publications (TIP) addressing indexed amounts which have been increased. For instance, the Department issued TIP No. 21BO7-O1, dated May 20, 2021, addressing the adjusted tax rates for production of gas and sulfur effective July 1, 2021 through June 30, 2022 (more information can be found here); TIP No. 21BO6-O1 issued May 21, 2021, addressing the increase in the index pricing used by distribution companies to calculate the gross receipts tax on the sale or transportation of natural or manufactured gas to retail consumers effective July 1, 2021 through June 30, 2022 (more information can be found here); and TIP No. 21AO1-O7, dated June 9, 2021, addressing the change in tax rate used by contractors who manufacture and use asphalt during fiscal year July 1, 2021 through June 30, 2022 (more information can be found here).

May 2021

Disaster Preparedness Sales Tax Holiday: The Florida Department of Revenue (Department) issued Tax Information Bulletin #21A01-04 dated May 21, 2021, stating that the Disaster Preparedness Sales Tax Holiday begins May 28, 2021 and ends June 6, 2021; and during this holiday period various qualifying items related to disaster preparedness are exempt from sales tax. This publication references a list of those qualifying items and also sets forth various examples and other guidance with respect to application of the exemption. More information may be found here.

This is but one of three sales tax holidays enacted in this year's legislative session. The others are the traditional tax-free period to purchase school supplies which will run between July 31 and August 9 and a new "Freedom Week," July 1 – 7, 2021. During Freedom Week, sales tax will not be imposed on purchases of certain outdoor equipment such as tents, grills, bicycles, kayaks and fishing gear, as well as no tax on tickets bought for things that take place before the end of the year such as live music, athletic contests, in-theater movies, cultural events, museums, state parks, and fitness.

Florida Enacts Online Sales Tax Bill: On April 19, 2021 Governor Ron DeSantis signed into law Senate Bill 50, which provides that, effective July 1, 2021, all businesses making remote sales into the state are required to collect and electronically remit sales and use tax, including any applicable discretionary sales surtax, if the business has made taxable remote sales in excess of $100,000 over the previous calendar year. The Department has issued Tax Information Publication (TIP) #21A01-03 outlining the requirement that marketplace providers are required by July 1 to register to collect and electronically remit sales and use tax on taxable sales they facilitate for marketplace sellers for delivery into Florida (more information may be found here). The law's estimated annual $1 billion of new revenue is earmarked for the Florida unemployment trust fund, which became depleted because of massive job losses during the COVID-19 pandemic. After the fund is replenished, the revenue will be used to make a cut in the commercial rent tax from 5.5 percent to 2 percent. More details about this new enactment will follow in next month's alert.

April 2021

Remote Seller/Marketplace Provider Legislation: On April 8, 2021, Senate Bill 50 was passed by the Florida Legislature. That bill constitutes Florida's initiative to impose sales tax requirements upon remote sellers and marketplace providers. Governor DeSantis is expected to sign this legislative initiative that, effective July 1, 2021, will start the process of allowing the Florida Department of Revenue to impose sales tax collection and remittance requirements on remote sellers and marketplace facilitators. This legislative initiative is complex, so we will await the Governor's signature before further reviewing these new tax provisions in our next edition. More information can be found here.

Update On Hillsborough County Sales Tax Rate: On March 16, 2021, the Florida Department of Revenue (Department) issued Tax Information Publication No: 21A01-01 addressing the sales tax rate in Hillsborough County as the result of the Florida Supreme Court ruling that the 1 percent transportation discretionary sales tax adopted in that County was unconstitutional. According to this TIP, the revised rate in that county effective immediately is 7.5 percent; and such rate is composed of the 6 percent state sales tax plus the 0.5 percent school capital outlay surtax, the 0.5 percent indigent care surtax, and the 0.5 percent local government infrastructure surtax. This TIP states that dealers should collect only the combined 7.5 percent rate, and that all tax and surtaxes collected must be reported and remitted to the Department.

March 2021

Updates Reported – It has been nearly three years since the U.S. Supreme Court decided the Wayfair case in June 2018, holding that states can require out-of-state sellers to collect and remit sales tax on sales to in-state consumers even if the seller has no physical presence in the consumer's state. In doing so, the Court overruled 50 years of its own precedent. While a large majority of states quickly changed their laws to facilitate collection of the additional tax, Florida has not and remains one of the lone holdouts. Very resistant to anything that might be characterized as a tax increase, the Republican-led Florida Legislature has been on the fence about collecting online sales taxes. Now the pandemic has put the sales tax issue at the center of debate because of the need to replace lost tax revenues. The details are far from certain, but leadership in the Legislature appears to have cut a deal to approve taxation of online sales to residents. The estimated $1.2 billion in revenue from the tax on online sales is proposed to be dedicated to replenish the state's unemployment trust fund and lower the unemployment tax on businesses. Considerable controversy has been generated about reforming the unemployment compensation system if the sales tax revenue is directed to it. Much remains to be sorted out, but taxation of online sales in Florida now seems likely, with the effect on the unemployment tax system yet to be determined. Once this year's legislative session has ended we will report on the details of the new law.

February 2021

Updates Reported – In January 2021, the Florida Department of Revenue published a Calendar of Electronic Payment Deadlines pertaining to various taxes administered by the Department. According to this publication, the banking process requires one business day to complete an electronic payment; and, therefore, the taxpayer must initiate the payment and receive a confirmation number no later than 5 p.m. E.T. on the date shown in the Calendar. The publication also states that electronic payments that receive a confirmation number later than 5 p.m. E.T. on the date specified in the Calendar, will not be processed until the next business day resulting in a late payment. More information can be found here.

January 2021

Updates Reported – On January 8, 2021, the Florida Department of Revenue released Tax Information Publication No. 21C02-01 (TIP), setting forth the 2021 Governmental Leasehold Intangible Tax Valuation Factor Table. As stated in this TIP, Florida law provides that all leasehold estates or related possessory interests in property of the U.S., the State of Florida, or any political subdivisions thereof, are taxed as intangible personal property if the leased property is undeveloped or predominantly used for residential or commercial purposes and rental payments are due in consideration of the leasehold estate or possessory interest. Unless certain exemptions apply, lessees of governmentally owned property are required to file the annual intangible tax return. The just value of the leasehold estate or possessory interest reported on the tax return is determined by the rent payments for the remaining term of the lease, using the Federal Reserve (Atlanta) discount rate on the last business day of the previous year, plus 1 percent. This TIP further states that the Department annually determines valuation factors based on that discount rate plus 1 percent.

December 2020

Updates Reported – The Florida Department of Revenue recently announced, in Tax Information Publication No. 20ADM-02, that the rate of interest for the period from January 1, 2021 through June 30, 2021, will be seven percent. This rate of interest will apply to deficiencies (underpayments) and late payments, as well as to overpayments. The Publication also noted that interest on overpayments generally begins to accrue on the 91st day after the Department receives a completed application for refund. The Publication also noted that the seven percent rate is subject to change effective July 1, 2021.

November 2020

Updates Reported – On October 19, 2020, the Florida Supreme Court denied certiorari in a closely-watched lawsuit involving sales and tourist-development taxes on rooms booked through certain digital platforms. In that regard, Airbnb, TripAdvisor, HomeAway and other digital platforms operating in Florida's $31 billion short-term vacation rental industry scored a recent victory when the Florida Supreme Court declined to review a decision by the Florida Fourth District Court of Appeal in Gannon v. Airbnb, Inc., et al., Case No. 4D19-541 (Fla. 4th DCA, Mar. 25, 2020). Anne Gannon, the Palm Beach County Tax Collector, had sought a declaratory judgment that digital platforms are "dealers" under state law and, therefore, are responsible for paying sales and tourist-development taxes (TDTs) or "bed taxes" on rooms booked through them. The Fourth District, however, determined in a 2-1 decision that a dealer is "one who can grant a possessory interest in the property," which only owners can do. In a subsequent order, that court had also denied Gannon's request to certify the case as one of "great public importance." The dissenting judge in disagreeing with the denial of certification for further review by the Supreme Court summed up his view that:

Tourism is the lifeblood of Florida. Covid-19 has shuttered the tourism industry, but that will not always be so. When Florida emerges from the economic impact of the pandemic, local governments will be starved for revenue. Whether the appellee corporations have the obligation to collect a Tourist Development Tax and remit it to the taxing authority is a question of great public importance and of statutory interpretation that the Florida Supreme Court should resolve for all the citizens and local governments of the state. Therefore, I would certify the following question: Does section 125.0104(f)-(g), Florida Statutes, require that the person "receiving the consideration" also have the ability to grant a possessory interest in the property?

In a 2015 agreement with the Florida Department of Revenue, online platforms were authorized to arrange with individual counties to collect taxes voluntarily. In few counties, however, have any of the online digital platforms agreed to do so. Hotels are required to collect sales taxes and TDTs on customer bills and remit the money, but enforcement against owners of individual private dwellings has proved elusive. The decision by the Fourth District Court of Appeal, which is now effectively final, can be found here.

October 2020

Updates Reported – On September 23, 2020, the Florida Department of Revenue issued Tax Information Publication No. 20C01-02 addressing the corporate income tax rate for the taxable years beginning on or after January 1, 2020 but before January 1, 2022. Pursuant to that TIP, the corporate income tax rate for taxable years beginning during that period will remain at 4.458 percent. That TIP also states that taxpayers that have a 52-53 week taxable period beginning on or about January 1 and ending on or about December 31 have the same tax rates as a calendar year-end taxpayer. Unless subsequently adjusted, the tax rate for taxable years beginning on or after January 1, 2022 will revert to 5.5 percent.

September 2020

Coronavirus Tax Payment and Return Filing Responsibilities (September 30) - Updates Reported: On September 18, 2020, Governor DeSantis signed House Bill 7095 which adopts the Internal Revenue Code for purposes of the Florida corporate income tax, adopting the Code in effect on January 1, 2020. Pursuant to House Bill 7095, references to the "Internal Revenue Code" mean the United State Internal Revenue Code of 1986, as amended and in effect on January 1, 2020, with certain exceptions. The law was effective September 18 and operates retroactively to January 1, 2020. More information can be found here.

July 2020

Coronavirus Tax Payment and Return Filing Responsibilities (July 27) - Updates Reported: The Florida Department of Revenue has placed on its website a publication entitled "Property Tax Oversight COVID-19 Frequently Asked Questions" with the current version being dated July 15, 2020. These FAQs address several questions relating to the payment of property taxes as well as the dispute of such taxes. Just by way of example, in response to the question of whether COVID-19 pandemic affected the assessed value of property, the FAQs state that the county property appraiser assesses the value of each property on January 1 of each tax year, and that "the COVID-19 pandemic has no effect on the assessed value placed on the property as of January 1, 2020." In addition, with respect to those situations where the taxpayer believes the property taxes are too high "due to the onset of COVID-19", the FAQs state that the taxpayer should contact the county property appraiser regarding the Truth in Millage (TRIM) hearings for 2020 property taxes. Virtual TRIM hearings are also addressed in the FAQs.

June 2020

Coronavirus Tax Payment and Return Filing Responsibilities (June 25) - Updates Reported: Florida has not followed the lead of the 38 other states that, consistent with the U.S. Supreme Court's mid-2018 decision in South Dakota v. Wayfair, have given a green light to the collection of tax from online sellers. In-state retailers have decried this refusal as unfair to them. Sales taxes collections in Florida have declined precipitously in recent months, falling almost $600 million. All the while, more and more packages have been flowing untaxed into the state as a result of households increasing the amount of their purchases made online. Of course, online customers are supposed to voluntarily pay the tax themselves, yet few do. Imposition of the use tax has long been in effect, but before Wayfair states had no practical means to ensure its collection.

State Senator Joe Gruters estimates are that by not collecting sales tax on online sales, Florida has been foregoing at least $700 million a year in revenue. Gruters predicts that "as a result of the crisis and the move to more online purchases being made, that could turn into a billion dollars or more." Until new revenue reports come out in late June and July, however, showing how deep a hole the state is really in, it is unlikely there will be any action, particularly since the legislative session is over for this year. Every state is certain to be looking for any opportunities for revenue enhancement to partially counterbalance the inevitable shortfalls. Florida has an obvious partial fix, bringing it in line with other states. The Governor and more legislators may come around to Gruters' view and see that collection of sales tax from all online sellers is imperative for Florida's future fiscal health. More information not available at present.

Coronavirus Tax Payment and Return Filing Responsibilities (June 2) - Updates Reported: By Tax Information Publication No.: 20B07-02, issued May 21, 2020, the Florida Department of Revenue published the tax rates for production of gas and sulfur effective July 1, 2020. According to this Publication, the adjusted rates must be used when completing the Declaration of Estimated Gas and Sulfur Production Form beginning with the July 2020 estimated payment. Also according to that Publication, that Form will be mailed by the Department to all active accounts during the last week of July.

May 2020

Coronavirus Tax Payment and Return Filing Responsibilities (May 8) - Further Updates Reported: On April 27, 2020, the executive director of the Florida Department of Revenue issued Order of Emergency Waiver/Deviation #20-52-DOR-003 which extends the due dates for Florida corporate income tax payments and returns as follows: (1) for entities with a fiscal year ending December 31, 2019, the Florida corporate income tax return otherwise due on May 1, 2020 is extended to August 3, 2020, with the May 1 due date for payments associated with that return extended to June 1, and with the due date to submit a request for extension of time to file the return and make tentative payments extended to June 1; (2) for entities with a fiscal year ending January 31, 2020, the June 1 due date for the return is extended to August 3, and the June 1 due date for making payments or submitting a request for extension of time to file remains June 1; and (3) for entities with a fiscal year ending February 29, 2020, the July 1 due date for the return is extended to August 3, and the due date for making payments or submitting a request for extension of time to file remains July 1. The Order also states that Florida corporate income tax payments "should be based on the corporation's best estimate of the amount that would be due with the returns" and that this Order does not change the current due dates of the estimated payments which are due between April 1, 2020 and July 15, 2020. More information can be found here.

March 2020

Coronavirus Tax Payment and Return Filing Responsibilities (March 30) - Further Due Date Changes Reported: On March 26, 2020, the Florida Department of Revenue issued two Emergency Orders, the first dealing with sales taxes and the second dealing with property taxes. As to sales taxes, the Order stated that while sales/use tax and other related tax returns and payments are normally due on the first day of the month and are late after the twentieth day of the month, this Order allows taxpayers who have been adversely affected by COVID-19 to extend the due date to April 30, 2020 for sales/use tax and related taxes collected in March; however, taxpayers not adversely affected by COVID-19 continue to be subject to the April 20 deadline. That Order further stated that taxpayers who were unable to meet the March 20 due date for taxes collected in February will have penalties and interest waived if those taxes are reported and remitted by March 31. The phrase "adversely affected" means the business closed in compliance with a state or local government order and had no taxable sales transactions as a result; the business experienced sales tax collections in March that are less than 75 percent of March 2019 sales tax collections; the business was established after March 2019; or the business is registered with the Department to file quarterly. As to property taxes, that Order applies to all 67 Florida counties, and allows payments for the 2019 year to be considered timely paid if made by April 15, 2020 rather than the normal due date of March 31. More information can be found here.

Coronavirus Tax Payment and Return Filing Responsibilities (March 19) - Possible Changes: As of March 16, 2020, the Governor of the State of Florida reportedly has announced that the Department of Revenue will offer flexibility on deadlines of taxes due, including corporate income taxes and sales taxes, to help businesses adversely affected by the coronavirus. Also, according to that report, the Governor noted that some corporate income tax payments can be deferred until the end of the fiscal year. No other specifics are available at this time. The Florida Department of Revenue has said it is closely monitoring developments pertaining to the novel coronavirus (COVID-19) and has established a dedicated team to address tax-related issues. For tax inquiries pertaining to COVID-19, and Florida tax reporting and payment obligations, the Department has a dedicated email address, COVID19TAXHELP@FloridaRevenue.com, where businesses and individuals can address their questions and concerns. The Department is encouraging all dealings with it be conducted by use of its online services, which include its website at FloridaRevenue.com, eServices applications to file and pay taxes, or its call center at 850.488.6800.

Sales Tax/Wayfair: Since the 2018 U.S. Supreme Court Wayfair decision, which ruled that states can apply reasonable requirements to compel remote vendors having no physical presence in the state to collect taxes on sales to residents, every state except Florida and Missouri has taken steps to subject out-of-state vendors to payment of sales tax. As this year's Florida legislative session nears a close however, resistance from the Florida House will mean the state again still has not addressed this issue. Senate Bill 126, sponsored by Sen. Joe Gruters, was passed by the Senate Commerce and Tourism Committee and the Finance and Tax Committee. The comparable House Bill (HB 159) never even received a committee hearing. As a result, the full Senate has taken no action on its bill, apparently deeming it to be futile. Florida continues to place the responsibility on its residents and businesses located in the state who buy from remote vendors to pay use tax. Compliance is rare, and enforcement of the use tax is impractical. As a result, unlike nearly all other states, remote sales by vendors without a physical presence in Florida still largely escape taxation. Florida Tax Watch has estimated that the state is losing more than $700 million in legally owed revenue from such sales. No change in the law appears likely however within the next year.

Senate Bill 126 can be found here.

February 2020

Leasehold Property Tax: For many years, Florida's intangible personal property tax was assessed annually on the market value of intangible property, such as stocks, bonds, and mutual fund shares, owned by Florida residents and businesses. In 2006, the Florida legislature repealed most parts of the tax, but left in place a tax on all leasehold estates, or related possessory interests in Florida property owned by any federal, state, local, or other governmental body. These leases are taxed as intangible personal property if the lessee pays rent to the government. An annual intangible tax return must be filed by any lessee of government owned property, unless the lessee is performing a governmental function on the property, in which case the lease is exempt from taxation. In reporting the intangible tax due, the just value of a lessee's leasehold estate that must be reported on the tax return is determined by the remaining rent payments under the lease using a formula based on the Federal Reserve discount rate – Atlanta – on the last business day of the previous year, plus one percent. Valuation factor tables, determined using this formula, are published annually by the Department of Revenue. On January 8, 2020, the Florida Department of Revenue issued Taxpayer Information Publication No. 20C02-01, providing the most recent valuation factor table.

November 2019

Rental Sales Tax Rate: On October 30, 2019, the Florida Department of Revenue issued Tax Information Publication No. 19A01-11, noting that effective January 1, 2020, the State sales tax rate on total rent charged for renting, leasing, letting, or granting a license to use real property will decrease from 5.7 percent to 5.5 percent. As also noted in this Publication, the total rent charged includes all consideration due and payable by the tenant to the landlord for the privilege or right to occupy the real property. Further, rental charges paid on or after January 1, 2020 for rental periods prior to January 1, 2020 continue to be subject to the 5.7 percent State sales tax; and that rental payments made prior to January 1, 2020 that entitle the tenant to occupy the real property on or after January 1, 2020 are subject to the 5.5 percent rate, with both situations including any applicable local option discretionary sales surtax.

October 2019

Corporate Income/Franchise Tax: In mid-September 2019, the Florida Department of Revenue issued Tax Information Publication No. 19C01-04, notifying taxpayers that the corporate income tax rate for years beginning January 1, 2019 through December 31, 2021 is reduced from 5.5 percent to 4.458 percent. Taxpayers with a 52 – 53-week taxable year beginning on or about January 1 and ending on or about December 31 have the same tax rates as calendar year taxpayers. Unless subsequently adjusted, the tax rate for taxable years beginning on or after January 1, 2022 will revert to 5.5 percent.

September 2019

Corporate Income Tax: On August 26, 2019, the Florida Department of Revenue issued Tax Information Publication No. 19C01-03. Shortly thereafter, the Department updated that Notice as of September 5, 2019. The purpose of the Notice was to remind those taxpayers that file a Florida corporate income/franchise tax return for any taxable year beginning during the 2018 or 2019 calendar year, to report additional information for each taxable year to the Department. For taxpayers timely filing a return by September 3, 2019, the required additional information was initially considered by the Department to be due if submitted by September 3, 2019; however, the update to that Notice states that the September 3 due date for such additional information is extended to October 27, 2019 because of the substantial impact caused by Hurricane Dorian. Further, additional information which is due after October 27, 2019 may now be submitted under this update within ten days of the extended due date or the date the related return is filed, whichever is earlier.

August 2019

Corporate Income Tax: On July 31, 2019, the Florida Department of Revenue issued two Tax Information Publications (TIP) dealing with the impact of the Federal Tax Cuts and Jobs Act of 2017 (TCJA) on the Florida corporate income tax. TIP No. 19C01-02 advises that the Florida Income Tax Code now adopts the Internal Revenue Code retroactively to January 1, 2019, and also addresses certain adjustments such as bonus depreciation and foreign source income provisions which are required in computing Florida adjusted federal income. TIP No. 19C01-01 reminds that all taxpayers filing a Florida corporate income tax return are required to submit certain information from their federal income tax return on the Department's website concerning the TCJA impacts on their Florida corporate income tax. The Department webpage is to be available on or before September 3, 2019. That TIP also briefly explains how certain sections within the Internal Revenue Code affected by the TCJA flow into the Florida corporate income/franchise tax return. The referenced sections include net operating losses, foreign-source income adjustments, and the limitation on net interest deductions.

July 2019

Interest Rate: For the period from July 1, 2019 through December 31, 2019, the Florida Department of Revenue earlier announced in Tax Information Publication No. 19ADM-01 that the floating interest rate remains at nine percent based on the adjusted prime rate charged by banks. The floating rate of interest applies to deficiencies (underpayments), late payments and overpayments.

June 2019

Fuel Tax: Effective June 4, 2019, the Florida Department of Revenue promulgated an emergency rule addressing the exemption from tax on fuel purchases in Florida between October 10, 2018 and June 30, 2019 where such fuel is used in the State for agricultural shipment or hurricane debris removal. The emergency rule sets forth various definitions and other important information pertaining to the exemption. A copy of the emergency rule can be found here.