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Florida Businesses Can Apply Now to Receive a Tax Credit by Shifting Sales Tax on Rental Property to Scholarship Organizations by Karen A. Lake, CPA


Posted on April 13, 2018 by Karen Lake

Included in Florida’s budget for fiscal year 2018 is an expansion of the state’s Sales Tax Credit Scholarship Program. Under the program, eligible businesses may receive a tax credit when they redirect their sales tax on commercial real estate leases to approved organizations that fund scholarships and job-training programs for eligible students throughout the state. The Department of Revenue (DOR) has already begun accepting applications from businesses, for which the state will allocate $57 million in available credits.

Tenants that occupy, use or are entitled to use commercial property may apply to the state to receive a dollar-for-dollar credit against the real estate rental tax they paid to a landlord when they make monetary contributions to an eligible scholarship-fund organization in the state that is exempt from federal income tax. Eligible organizations may include scholarship-funding organizations, such as Step Up For Students and Gardner Scholarships; private schools with students in grades K through 12; and accredited facilities that provide job-training services to persons who have low income, workplace disadvantages or other barriers to employment.

Timing is critical for businesses that wish to apply to allocate their tax credits to qualifying scholarship-funding organizations. While the DOR expects to receive numerous applications, it will allocate the $57 million in available credits on a first-come-first-served basis. Upon the DOR’s approval of an application, the agency will send a certificate of contribution to the business’s landlord, who will then reduce the tax that he or she collects from the business’s lease payments beginning on October 1, 2018.

With advance planning under the direction of experienced state and local tax advisors, businesses that pay commercial rent can apply to the Florida Sales Tax Credit Scholarship Program and realize potential tax savings while helping underprivileged children get the education they deserve.

 

About the Author: Karen A. Lake, CPA, is SALT (state and local tax) specialist and an associate director of Tax Services with Berkowitz Pollack Brant, where she helps individuals and businesses navigate complex federal, state and local tax laws, and credits and incentives. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.

 

About the Author: Karen A. Lake, CPA, is SALT (state and local tax) specialist and an associate director of Tax Services with Berkowitz Pollack Brant, where she helps individuals and businesses navigate complex federal, state and local tax laws, and credits and incentives. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at info@bpbcpa.com.