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Tax Implications of Florida’s 2019 Legislative Session by Karen A. Lake, CPA


Posted on June 19, 2019 by Karen Lake

The Florida legislature recently passed a $91.1 billion budget for 2019 that provides some significant wins for individuals and business taxpayers located in the state while failing to address the remote and online sales tax collection issue created by the Supreme Court’s June 2018 decision in South Dakota v. Wayfair.

Here are the details.

Reduced Commercial Business Rent Tax in 2020

Florida is the only state in the country that levies sales tax on the total rent businesses pay to lease commercial property, including office, retail and warehouse space. While this rental tax increases occupancy costs and creates a competitive disadvantage for businesses operating in the state, the legislature is continuing efforts to ease this burden and has reduced the tax rate from 5.7 percent in 2019 to 5.5 percent effective Jan. 1, 2020.

Decoupling from New Federal Tax on Global Intangible Low-Taxed Income (GILTI)

Florida’s legislature voted to exclude from its corporate tax base global intangible low-taxed income (GILTI), which the federal tax laws introduced in 2018 as taxable income U.S. shareholders receive from controlled foreign corporations (CFCs). In addition, the state extended Florida taxpayers’ GILTI refund and corporate income tax rate reduction for two years until the amount of increase in corporate income tax revenue can be determined. This decision allows Florida corporations to avoid a significant tax increases, but it also requires them to meet a new compliance burden and submit to the state a substantial amount of information about the GILTI they report on their federal tax returns, including the amount of GILTI,  interest expense and net operating loss deductions they claim on their federal tax returns.

Approval of Two Sales Tax Holidays in 2019

 The legislature approved a seven-day sales tax holiday on hurricane supplies during the first week of June and a new, five-day respite from sales tax on back-to-school supplies, clothing and computers in August 2019.

 Continued Funding of Enterprise Florida and Visit Florida

In an effort keep the state competitive as a prime location for business and leisure, the legislature voted to continue funding the public-private partnership devoted to economic development, Enterprise Florida, and to fund for two more years the state’s tourism marketing program, Visit Florida.

The professionals with Berkowitz Pollack Brant’s State and Local Tax (SALT) Planning practice have deep experience helping individuals and businesses understand and comply with a complex tax landscape that varies from one state to the next.

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

 


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