June 18, 2010
Florida Tax Update - Part 2
NEW INTEGRATED ENFORCEMENT
Beginning July 1, 2010, if the Florida Department of Revenue files a warrant, notice of lien, or a judgment lien against a taxpayer, the Department can also revoke any and all registration certificates, permits, or licenses issued to that taxpayer.
The Department is required to schedule an informal conference with the taxpayer before any such revocations, and the taxpayer can present evidence in their favor during the conference, or they can enter into a compliance agreement prior to any revocations taking effect.
Business registrations, licenses, and permits are very important, so keeping current on all filing obligations and responding to notices from the Department quickly will be more important than ever.
TAX CREDIT FOR HIRING THE UNEMPLOYED
Certified businesses can claim a credit of $1,000 for each qualified employee. A “qualified employee” is an employee who was unemployed at least 30 days before being hired, is hired on or after July 1, 2010, has not been previously employed by the business, and works at least 36 hours per week and 12 months before the credit is claimed.
In order for a business to get certified, they must apply with the Office of Tourism, Trade, and Economic Development. As there is cap of $5 Million for all taxpayers in the 2011-12 fiscal year and $5 Million in the 2012-13 fiscal year, eligible businesses should apply as quickly as possible.The credit may be carried forward to the next tax year. It expires June 30, 2012.
ENTERTAINMENT INDUSTRY CREDIT
An entertainment industry credit is to be created in the amount established and awarded by the Office of Tourism, Trade and Economic Development. It may not be claimed before July 1, 2011 and may be carried forward to the next tax year.
Effective on May 28, 2010, any costs incurred to acquire a transferred credit that are deducted from federal taxable income are required to be added back for Florida corporate income tax purposes.
FRACTIONAL AIRCRAFT OWNERSHIP PROGRAM
Effective July 1, 2010, the sale or the use of aircraft primarily used in a fractional ownership program or of any parts or labor used in the completion, maintenance, repair, or overhaul of such aircraft is exempt from sales and use tax.
To qualify for the exemption, the program manager of the fractional ownership program must furnish the dealer with a certificate stating that the lease, purchase, repair or maintenance is for aircraft primarily used in a fractional aircraft ownership program and that the program manager qualifies for the exemption. If exempt transactions occur on a continuous basis, the program manager can allow the dealer to keep the certification on file, and the program manager needs to notify the dealer when the exemption no longer applies.
LEASE OR RENTAL OF TELECOMMUNICATIONS PROPERTY
Beginning on July 1, 2010, Florida sales and use tax on the rental or the license fee for use of real property is inapplicable to any property that is rented, leased, subleased, or licensed to a person who provides telecommunications, data systems management, or internet services at a publicly or privately owned convention hall, civic center, or meeting space at a public lodging establishment.
This provision is only applicable to the portion of the payments that are based upon a percentage of sales, revenue sharing, or royalty payments, and not a fixed price. It is intended to be remedial in nature, and applies retroactively, but does not provide a basis for an assessment of any tax not paid, or create a right to a refund of any tax not paid before July 1, 2010.
MANUFACTURING MACHINERY AND EQUIPMENT
A new incentive program to help Florida manufacturers compete with neighboring states has been launched. A sales and use tax exemption for manufacturing machinery and equipment purchases in excess of the amount spent during 2008 has been provided in the recent “Jobs for Florida” Act.
The refunds are allocated on a first come, first served basis, and the allotment is $19 Million for 2010-2011 and $24 Million for 2011-2012.