House votes not to mirror corporate income tax deduction in Florida
Chalk this one up to the “go figure” category. If the Florida Legislature has its way, the federal government will offer a more generous tax break to corporations than Florida does. Florida's corporate income tax usually tracks the federal language -- except when that costs the state money. This year, if the state were to adopt the federal definition of corporate income, the state would lose $560 million, plunging the $3.8 billion budget deficit even deeper.
So the House Finance and Tax Committee voted 10-5 on Thursday to rewrite Florida’s corporate income tax provisions to no longer track the federal definition of taxable income.
Congress passed changes to the corporate income tax last year that give businesses the ability to accelerate the depreciation on their capital investments in an attempt to boost economic development. The federal acts were called the Small Business Jobs Acts of 2010 and the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.
Gov. Rick Scott has called for phasing out of the 5.5 percent income tax on corporations doing business in Florida. But neither the House or Senate appear to have budgeted for the cuts.
Finance and Tax PCB 11-01 updates the Florida income tax code to reflect the changes in the IRS code except those relating to depreciation and instead allows corporations to receive those tax credits over seven years.
Nancy Stevens of the Florida Manufacturers Association said that the seven-year depreciation “doesn’t really stimulate the manufacturing sector” since most of Florida’s manufacturers replace their equipment every three to five years.
Frank Meiners of Associated Industries of Florida said the business-backed group “ would have appreciated a five-year add-bk rather than a seven year. We understand it would cost a lost of money.” There was no debate on the bill and passed along party lines, with Democrats opposed.