12CER08-31: Economic Stimulus Act of 2008 Additions
SPECIFIC REASONS FOR FINDING AN IMMEDIATE DANGER TO THE PUBLIC HEALTH, SAFETY OR WELFARE: Section 120, Florida Statutes, permits agencies to promulgate emergency rules when there is an immediate danger to the public health, safety, or welfare of Florida citizens. Chapter 2008-206, Laws of Florida, sought to stabilize Florida's Corporate Income Tax revenue after passage of the Economic Stimulus Act of 2008, Pub. L. No. 110-185. The legislative intent behind Chapter 2008-206, Laws of Florida, apparently was to permit corporate taxpayers to retain the same depreciation and expensing deductions in 2008 that taxpayers had under the Internal Revenue Code in effect on January 1, 2007, and for any remaining business expenses, including depreciation deductions, to be recognized in future years. Legislative leaders have made clear their intent to address technical deficiencies in the language of Chapter 2008-206, Laws of Florida, by the close of the 2009 regular legislative session. Florida corporate taxpayers are likely to suffer significant economic impacts resulting from the uncertainty in current Florida law created by Chapter 2008-206, Laws of Florida, which may result in the loss of Florida jobs, decisions not to make investments in capital assets located in Florida, and negative impacts on market capitalization of Florida businesses. Given the recent developments in the national and state economic environments, Florida’s corporate taxpayers require certainty in the tax effects of Chapter 2008-206, Laws of Florida, in order to not further harm the welfare of Florida's economic environment.
REASON FOR CONCLUDING THAT THE PROCEDURE IS FAIR UNDER THE CIRCUMSTANCES: Emergency rulemaking is fair under the circumstances because, without the certainty required by Florida corporate taxpayers, immediate and unintended financial impacts will be felt by these taxpayers before the technical deficiencies in the language of Chapter 2008-206, Laws of Florida, can be addressed as indicated by Legislative leaders. Such impacts will present further harm to the welfare of Florida's economic environment.
SUMMARY: Emergency Rule 12CER08-31, F.A.C., (Economic Stimulus Act of 2008 Additions): (1) provides that taxpayers subject to the add-back provisions in Sections 220.13(1)(a)14. and 15., F.S., are required to add-back 2008 federal deductions under Sections 168(k) and 179 of the Internal Revenue Code caused by changes passed in the Economic Stimulus Act of 2008, Pub. L. No. 110-185, adjusted by the difference between depreciation deductions taken and depreciation deduction that could have been taken if deductions under Sections 168(k) and 179 permitted by the Economic Stimulus Act of 2008, Pub. L. No. 110-185, had not been taken; (2) provides that taxpayers are allowed to make an adjustment in tax years following 2008 for the difference between depreciation deductions taken and depreciation deduction that could have been taken if deductions under Sections 168(k) and 179 permitted by the Economic Stimulus Act of 2008, Pub. L. No. 110-185, had not been taken; and (3) requires that additions and adjustments shall be reported on a schedule included with returns filed.
THE PERSON TO BE CONTACTED REGARDING THE EMERGENCY RULE IS: Robert Babin, Deputy Director, Technical Assistance and Dispute Resolution, Department of Revenue, P.O. Box 7443, Tallahassee, Florida 32314-7443, telephone (850)922-4842
THE FULL TEXT OF THE EMERGENCY RULE IS:
12CER08-31 2008 Federal Stimulus Package Additions.
(1) Scope. This rule only applies to taxpayers subject to additions under Section 220.13(1)(a)14. or Section 220.13(1)(a)15., F.S.
(2) For purposes of the addition required by Sections 220.03(3) and 220.13(1)(a)14., F.S., taxpayers are required to add-back the amount of the federal deduction claimed under Section 179 of the Internal Revenue Code, that exceeds $125,000, as adjusted pursuant to Section 179(b)(5), I.R.C.
(3) For purposes of the addition required by Section 220.03(3), 220.13(1)(a)14., or 220.13(1)(a)15., F.S., taxpayers are required to add-back an amount equal to:
(a) The total depreciation claimed under Sections 167 and 168 of the Internal Revenue Code on the related federal return, minus.
(b) The amount of depreciation deduction that would have been allowable under Sections 167 and 168 of the Internal Revenue Code as in effect on January 1, 2007, if the taxpayer had not expensed any amounts in excess of $125,000 under Section 179 of the Internal Revenue Code (as adjusted pursuant to Section 179(b)(5), I.R.C.), or taken bonus depreciation pursuant to the Economic Stimulus Act of 2008 under Section 168(k) of the Internal Revenue Code.
(4) In tax years beginning after December 31, 2008, taxpayers shall make an adjustment to their Florida taxable income by an amount equal to:
(a) The amount of depreciation deduction that would have been allowable under Sections 167 and 168 of the Internal Revenue Code as in effect on January 1, 2007, if the taxpayer had not expensed any amounts in excess of $125,000 under Section 179 of the Internal Revenue Code (as adjusted pursuant to Section 179(b)(5), I.R.C.), or taken bonus depreciation pursuant to the Economic Stimulus Act of 2008 under Section 168(k) of the Internal Revenue Code, minus.
(b) The amount of depreciation deduction taken under Sections 167 and 168 of the Internal Revenue Code on the related federal return.
(5) Upon the sale or disposition of property for which an addition was required under subsections (2) or (3), the gain for Florida purposes is the same as the gain for federal purposes. However, the taxpayer shall adjust its Florida taxable income by an amount equal to:
(a) The Florida depreciation taken on the asset, taking into account subsections (2), (3), and (4), minus.
(b) The total federal depreciation taken on the asset under Sections 167 and 168.
(6) The total amount of adjustments claimed for property for all years may not exceed the respective additions under Sections 220.13(1)(a)14. and 220.13(1)(a)15., F.S., for the same property. A schedule reflecting the additions and all subsequent adjustments must be attached to the return.
Specific Authority Sections 1, 2, and 5, Chapter 2008-206, L.O.F. Law Implemented Sections 1, 2, and 5, Chapter 2008-206, L.O.F. History–New 12-9-08.