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Governor Signs Important Tax Bill for Florida Businesses by Karen A. Lake, CPA

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Posted on June 19, 2017 by Karen Lake

On May 25, 2017, Florida Governor Rick Scott signed legislation that affects a wide range of sales and use tax, corporate income tax and property tax issues impacting businesses located in the state.

 

For businesses, H.B 7109 reduces the sales tax rate on the rental of commercial real estate from current 6 percent to 5.8 percent, effective on January 1, 2018. In addition, the bill extends and expands sales tax exemptions for a wide range of products, including certain animal and aquaculture health products; certain construction materials, equipment and electricity for certain data centers; and (5) purchases of certain building materials, goods and services used for new construction in Rural Areas of Opportunity.

 

With regard to corporate income taxes, the bill makes the following amendments:

1.     Increases the annual research and development tax credit from $9 million to $16.5 million in 2018

2.     Increases the annual tax credits available for voluntary brownfields clean-up from $5 million to $10 million;

3.     Makes permanent the Community Contribution Tax Credit with a funding level of $14 million each fiscal year, which businesses may also apply against sales tax and insurance premiums tax.

 

Amendments to property taxes include the following:

1.     An exemption from property taxes for charitable assisted living facilities and a clarification in the required documentation to allow certain nonprofit homes for the aged to obtain an exemption;

2.     A clarification in the property tax exemption extended to properties leased to a charter school, and an extension in the deadline for charter schools to apply for an exemption for the 2016 tax year;

3.     A revised definition of inventory to exempt certain construction and agricultural equipment; and

4.     Tax relief for certain property used as affordable housing, beginning on January 1, 2018;

The advisors and accountants with Berkowitz Pollack Brant work with businesses in Florida and throughout the world to maintain tax compliance and minimize tax liabilities.

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