Florida Department of Revenue Rule Hearing on Insurance Premium Tax-Related Proposed Rules Relating to the Florida Tax Credit Scholarship Program Yields No Comments

 

Regulations relating to tax credits against corporate income and insurance premium taxes for contributions made to the Florida Tax Credit Scholarship Program were part of a Proposed Rule Hearing agenda at the Florida Department of Revenue (“DOR”) on April 11, 2011.  The complete agenda is attached for review.

The Hearing was called to order and all the proposed Rules were read; however, no testimony was given, nor comments offered. 

The proposed Rules will now proceed to the Florida Cabinet, which will consider them for final adoption by the DOR at a future meeting in its role as the Florida Financial Services Commission.

The Florida Tax Credit Scholarship Program, as amended by Chapter 2010-24, L.O.F., allows taxpayers to receive a credit allocation for contributions made to nonprofit scholarship funding organizations.  This law expands the program to include tax credits against corporate income tax and insurance premium tax by transferring Section 220.187, F.S. to new Section 1002.395, F.S. and creating Section 220.1875, F.S. to provide for the tax credit against corporate income tax.

At the Hearing, the DOR first reviewed the following proposed Rules that would establish Chapter 12-29, entitled “Mutitax Credits:”

• 12-29.001 Scope
• 12-29.002 Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Rescindment
• 12-29.003 Florida Tax Credit Scholarship Program; Applications

To view the complete text of the proposed Rules, click here.

Once effective, proposed Rule Chapter 12-29 would establish the procedures governing the approval of tax credit allocations and rescindments, the approval for carryforward tax credits to a subsequent tax year, along with the procedures to be followed by taxpayers when claiming tax credits on tax returns.

• Proposed Rule 12-29.001 (Scope), provides that Chapter 12-29, F.A.C. sets forth the Rules to be used in the administration of tax credits for contributions made to nonprofit scholarship funding organizations under Section 1002.395, F.S., Florida Tax Credit Scholarship Program.
• Proposed Rule 12-29.002 (Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Rescindment):
  • (1) Sets forth the taxpayers eligible to participate in the Florida Tax Credit Scholarship Program and when those taxpayers are authorized under Chapter 2010-24, L.O.F., to participate in the Program;
  • (2) Requires eligible taxpayers to apply on-line using the DOR’s Web site, or to file Form DR-116000, Application for Tax Credit Contributions to Nonprofit Scholarship Funding Organizations, with the DOR in order to receive a credit allocation from the tax cap authorized by the law;
  • (3) Establishes the procedures the DOR will use to notify an applicant of the taxpayer’s credit allocation;
  • (4) Establishes the procedures for claiming the credit allocation as a tax credit on a tax return;
  • (5) Provides that a contribution to an eligible nonprofit scholarship funding organization must be made by an eligible taxpayer prior to taking a tax credit on a tax return;
  • (6) Establishes procedures for taxpayers to carry forward a tax credit for a period of up to three years when a taxpayer’s tax liability is insufficient to take the full amount of the tax credit; and
  • (7) Establishes procedures for taxpayers who are unable to use a credit allocation to apply on-line with the DOR or to submit Form DR-116100 to rescind that credit and when those funds are eligible to other taxpayers for that state fiscal year.
• Proposed Rule 12-29.003 (Florida Tax Credit Scholarship Program; Applications) adopts, by reference, applications used by the DOR in the administration of the Florida Tax Credit Scholarship Program and provides how to obtain copies of those applications.

Under the DOR’s Division of Miscellaneous Tax, Chapter 12B-8, entitled “Insurance Premium Taxes, Fees and Surcharges,” Proposed Rule 12B-8.001, “Premium Tax; Rate and Computation” would remove provisions and provides a reference to the Rule chapter containing provisions for tax credits for contributions made to eligible nonprofit scholarship funding organizations.

To view the complete text of this proposed Rule, click here.

The following related proposed Rules under DOR’s Division of Corporate, Estate and Intangible Tax, Chapter 12C-1, “Corporate Income Tax” also were reviewed:

• 12C-1.0186 Credit for Florida Alternative Minimum Tax
• 12C-1.0187 Credits for Contributions to Nonprofit Scholarship Funding Organizations
• 12C-1.051 Forms

The proposed changes to Rule Chapter 12C-1 are considered to be necessary to update reference to the new law for purposes of the credit for the Florida alternative minimum tax.  The changes also would remove Rule provisions and forms relating to tax credits for contributions to nonprofit scholarship funding organizations prior to July 1, 2010.

• Proposed Rule 12C-1.0186 (Credit for Florida Alternative Minimum Tax) updates the reference to the credits for contributions to nonprofit scholarship funding organizations to Section 220.1875, F.S., as provided in Sections 10 and 11, Chapter 2010-24, L.O.F.
• The proposed repeal of Rule 12C-1.0187 (Credits for Contributions to Nonprofit Scholarship Funding Organizations) removes provisions regarding the credit against corporate income tax for contributions made to eligible nonprofit scholarship funding organizations that will be provided in Rule Chapter 12-29, F.A.C., when effective.
• The proposed amendments to Rule 12C-1.051 (Forms) remove an obsolete application to obtain an allocation of the tax credit for contributions made to eligible nonprofit scholarship funding organizations and an obsolete application to rescind a credit allocation. Applications used to administer the Florida Tax Credit Scholarship Program will be provided in the aforementioned Rule Chapter 12-29 once it is effective.

Beginning July 1, 2010, corporate taxpayers also were allowed to apply for a credit allocation for contributions to a non-profit scholarship funding organization for a tax credit against excise taxes on liquor, wine and malt beverages administered by the Division of Alcoholic Beverages and Tobacco of the Florida Department of Business and Professional Regulation.

Beginning January 1, 2011, certain taxpayers were allowed to apply for a credit allocation to be taken as a tax credit against sales and use tax, and taxpayers who pay the tax on oil and gas production in Florida are allowed to apply for a credit allocation to be taken as a tax credit.

 

Should you have any questions or comments, please contact Colodny Fass.

 

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