Florida TaxWatch urges special session
Nov 12, 2008
South Florida Business Journal--November 11, 2008
by Stewart Verney
Florida TaxWatch is urging Gov. Charlie Crist to call a special legislative session to clarify the state’s corporate income tax law.
The 2008 Florida Legislature passed a routine corporate income tax bill that conforms state law to federal law. But, the federal economic stimulus package that was passed earlier this year, which allows businesses to take a bigger deduction for depreciating assets, complicated matters.
The federal law, which is intended to spur investment in equipment, allows companies to depreciate equipment put into service in 2008 by 60 percent, instead of the usual 10 percent, and take that as a deduction on federal corporate income taxes. The state, facing a revenue shortfall, does not want to extend the same option for state income taxes. But, the way the state law is written and interpreted by the Florida Department of Revenue, companies taking the federal deduction would see that asset depreciated in the state’s eyes, as well, without the corresponding tax deduction.
One possible consequence is that businesses will choose not to invest as much in Florida, the Tallahassee-based watchdog group noted.
“It is vital to Florida’s economic recovery that the Legislature clarify this issue as soon as is practical,” Florida TaxWatch CEO Dominic Calabro said. “If this is not corrected soon, Florida’s economy will potentially suffer significant and lasting harm.”
Florida TaxWatch is suggesting the state have a special session that coincides with the new Legislature’s organization session scheduled for Nov. 18. Many corporations, the group pointed out, must make estimated federal income tax payments by Dec. 15.