Tax News

CCH (cch.taxgroup.com) reports:

  As previously reported (TAXDAY, 2009/6/18, S.6), Ch. 192 (S.B. 2504), Laws 2009, updated Florida's conformity date to January 1, 2009 and decoupled the Florida corporate income tax from the extension through 2009 by the American Recovery and Reinvestment Act of 2009 (Recovery Act) (P.L. 111-5) of the 50% bonus depreciation and IRC §179 limitations enacted by the Economic Stimulus Act of 2008 (P.L. 110-185) and the Recovery Act provision that allows taxpayers to defer income from the discharge of indebtedness in connection with the reacquisition after December 31, 2008, and before January 1, 2011, of a corporate or business debt instrument. The legislation is operative retroactively to January 1, 2009. Therefore, except for the provisions from which Florida has specifically decoupled, taxpayers filing Florida returns during 2009 will use adjusted federal income as the starting point in computing their Florida corporate income tax.

  Amounts required to be added back may be subtracted in subsequent tax years. If a corporation acquires or merges with another corporation, the acquiring corporation may claim the subtractions in the same manner and to the same extent as the original corporation. In addition, if a corporate taxpayer has a net operating loss in a tax year in which it is entitled to claim a subtraction, it is allowed to increase its net operating loss by the amount of the subtraction. However, if a corporate taxpayer ceases to do business, it may not transfer or otherwise use a subtraction. Corporate taxpayers must create and maintain a schedule reflecting all of the adjustments made and must also report any additions on Schedule I and subtractions on Schedule II of the Florida Corporate Income/Franchise and Emergency Excise Tax Return (Form F-1120) for the current tax year. The schedule should specify the type and amount of the original addition(s) and show all subsequent subtractions by tax year. However, the basis of assets subject to the additions and subtractions for bonus depreciation and IRC §179 is the same for federal and Florida corporate income tax purposes. Therefore, even though the underlying asset(s) may have been sold, fully depreciated, or otherwise disposed of, corporate taxpayers may continue to claim the subtractions over the allowed seven-year period.

Tax Information Publication, No. 09C01-03 , Florida Department of Revenue, July 8, 2009, ¶205-359

  Other References:

  Explanations at ¶10-670

  Explanations at ¶10-685

  Explanations at ¶10-900