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
PURPOSE AND EFFECT: The purpose of establishing Rule Chapter 12-29, F.A.C. (Multitax Credits), is to establish a rule chapter to set forth rules to be used in the administration of tax credit programs that authorize eligible taxpayers to receive tax credits against more than one tax.
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. The referenced law expands the tax credits against corporate income tax and insurance premium tax, transferring Section 220.187, F.S., to new Section 1002.395, F.S., creating Sections 211.0251, 212.1831, 220.1875, and 561.1211, F.S., and amending Section 624.51055, F.S.
Beginning July 1, 2010, taxpayers were allowed to apply for a credit allocation for contributions to a nonprofit 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 are 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.
When in effect, this rule chapter will establish rules for administering the tax credits for contributions made to nonprofit scholarship funding organizations under Section 1002.395, F.S., Florida Tax Credit Scholarship Program, including the procedures and applications governing the approval of tax credit allocations and rescindments, the procedures to be followed by taxpayers when claiming tax credits on tax returns, and the procedures to obtain approval to carry forward tax credits to a subsequent tax year.
SUMMARY: Proposed Rule Chapter 12-29, F.A.C. (Multitax Credits), provides for the administration of tax credit programs which authorize eligible taxpayers tax credits against more than one tax imposed under Florida law.
Proposed Rule 12-29.001, F.A.C. (Scope), provides that Rule 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, F.A.C. (Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Rescindment): (1) provides 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 Department’s website, or to file Form DR-116000, Application for Tax Credit Contributions to Nonprofit Scholarship Funding Organizations, with the Department, to receive a credit allocation from the tax cap authorized by the law; (3) establishes the procedures the Department 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 Department or to submit Form DR-116100, Application for Rescindment of Tax Credit Allocation to Nonprofit Scholarship Funding Organizations, to rescind that credit and when those funds are eligible to other taxpayers for that state fiscal year.
Proposed Rule 12-29.003, F.A.C. (Florida Tax Credit Scholarship Program; Applications), adopts, by reference, applications used by the Department in the administration of the Florida Tax Credit Scholarship Program and provides how to obtain copies of those applications.
SUMMARY OF STATEMENT OF ESTIMATED REGULATORY COSTS: The agency has determined that this rule will not have an adverse impact on small business. A Statement of Estimated Regulatory Cost has not been prepared by the agency.
Any person who wishes to provide information regarding a statement of estimated regulatory costs, or provide a proposal for a lower cost regulatory alternative must do so in writing within 21 days of this notice.
RULEMAKING AUTHORITY: 213.06(1), 1002.395(13) FS.
LAW IMPLEMENTED: 92.525(1)(b), 211.0251, 212.1831, 213.37, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (13) FS.
A HEARING WILL BE HELD AT THE DATE, TIME AND PLACE SHOWN BELOW:
DATE AND TIME: April 11, 2011, 10:30 a.m.
PLACE: 2450 Shumard Oak Boulevard, Building One, Room 2503, Tallahassee, Florida
Pursuant to the provisions of the Americans with Disabilities Act, any person requiring special accommodations to participate in this workshop/meeting is asked to advise the agency at least 48 hours before the workshop/meeting by contacting: Tammy Miller at (850)617-8346. If you are hearing or speech impaired, please contact the agency using the Florida Relay Service, 1(800)955-8771 (TDD) or 1(800)955-8770 (Voice).
THE PERSON TO BE CONTACTED REGARDING THE PROPOSED RULE IS: Robert DuCasse, Revenue Program Administrator, Technical Assistance and Dispute Resolution, Department of Revenue, P. O. Box 7443, Tallahassee, Florida 32314-7443, telephone (850)717-6476
THE FULL TEXT OF THE PROPOSED RULE IS:
12-29.001 Scope.
This rule chapter 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. That program allows taxpayers to receive a credit allocation for contributions made to nonprofit scholarship funding organizations. This rule chapter establishes procedures governing the approval of tax credit allocations and rescindments, the approval for carryforward tax credits to a subsequent tax year, and the procedures to be followed by taxpayers when claiming tax credits on tax returns.
Rulemaking Authority 1002.395(13) FS. Law Implemented 211.0251, 212.1831, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (13) FS. History–New________.
12-29.002 Florida Tax Credit Scholarship Program; Participation; Allocation; Carryforward; Rescindment.
(1) Definitions. For purpose of this rule, the following terms mean:
(a) “Contribution” means an eligible contribution, as defined in Section 1002.359(2), F.S., made to an eligible nonprofit scholarship funding organization.
(b) “Credit allocation” means an allocation to a taxpayer of an annual tax credit cap authorized under the Florida Tax Credit Scholarship Program.
(c) “Department” means the Florida Department of Revenue.
(d) “Division” means the Division of Alcoholic Beverages and Tobacco of the Department of Business and Professional Regulation.
(e) “Eligible nonprofit scholarship funding organization” means a charitable organization as defined in Section 1002.359(2), F.S. A list of eligible nonprofit scholarship funding organizations established by the Department of Education is available at www.floridaschoolchoice.org/.
(f) “State fiscal year” means the annual period beginning July 1 through June 30 of the following year.
(g) “Tax credit cap” means the maximum annual tax credit amount that the Department is authorized in Section 1002.395(5), F.S., to allocate. The Department will issue a Tax Information Publication to announce increases in the maximum annual tax credit amount.
(2) TAXPAYERS ELIGIBLE TO PARTICIPATE IN THE PROGRAM. Taxpayers who pay any of the following taxes may apply to the Department for a credit allocation as follows:
(a) For the taxes administered by the Department:
1. Florida corporate income tax imposed under Chapter 220, F.S.
2. Florida insurance premium tax imposed under Section 624.509, F.S.
3. Taxpayers who hold a valid Sales and Use Tax Direct Pay Permit, issued by the Department, as provided in Section 212.183, F.S., and Rule 12A-1.0911, F.A.C.
4. Taxpayers who pay tax on oil production in Florida imposed under Section 211.02, F.S., or who pay tax on gas production in Florida imposed under Section 211.025, F.S.
5. Taxpayers who were eligible for tax credits authorized by Sections 220.187 and 624.51055, F.S., prior to July 1, 2010, remain eligible for the tax credit now authorized by Section 1002.395, F.S.
(b) For excise taxes administered by the Division:
1. Excise tax on liquor beverages imposed under Section 565.12, F.S.;
2. Excise tax on wine beverages imposed under Section 564.06, F.S., except excise taxes imposed on wine produced by manufacturers in Florida from products grown in Florida; or,
3. Excise tax on malt beverages imposed under Section 563.05, F.S.
(3) APPLICATIONS FOR CREDIT ALLOCATIONS.
(a) To receive a credit allocation, taxpayers must apply on-line using the Department’s website at www.myflorida.com/dor/taxes/tax_incentives.html or submit an Application for Tax Credit for Contributions to Nonprofit Scholarship Funding Organizations (Form DR-116000, incorporated by reference in Rule 12-29.003, F.A.C.) to the Department.
1. Taxpayers required to file returns and remit payments by electronic means pursuant to Section 213.755, F.S., and Rule Chapter 12-24, F.A.C., must apply online using the Department’s website. When the application is completed and submitted online, a confirmation number will be provided to confirm receipt of the application.
2. The fastest and easiest way to apply for the credit is to use the online application. Taxpayers who do not meet these requirements are encouraged to apply online. However, such taxpayers may apply for a credit allocation by filing a paper application with the Department.
(b) A separate application to receive a credit allocation is required for:
1. Each eligible nonprofit scholarship funding organization the taxpayer intends to support; and
2. Each beverage license issued by the Division for which a separate return to report and pay the excise taxes on liquor, wine, and malt beverages is filed with the Division.
(c) Taxpayers are eligible to apply during the following periods to receive a credit allocation from each annual tax credit cap for the following taxes as follows:
1. Corporate Income Tax – A taxpayer may make an application for a credit allocation on the first business day of January of each calendar year for its tax year that begins during that calendar year. The application must be made on or before the last day of the taxpayer’s corporate income tax year.
a. Example: A calendar year taxpayer may apply for a credit allocation for the 2011-2012 state fiscal year credit beginning on January 3, 2011. The application must be made on or before December 31, 2011.
b. Example: A taxpayer with a tax year beginning December 1, 2011, and ending November 30, 2012, may apply for a credit allocation for the 2011-2012 state fiscal year beginning on January 3, 2011. The application must be made on or before November 30, 2012.
2. Insurance Premium Tax – An application for a credit allocation may be made beginning on the first business day of January of each calendar year and may not be made after December 31 of that calendar year. Example: For the 2011-2012 state fiscal year tax credit cap, a taxpayer may submit an application for a credit allocation beginning on January 3, 2011. The application must be made on or before December 31, 2011.
3. Sales and Use Tax – Tax on Oil and Gas Production – Excise Taxes on Liquor, Wine, and Malt Beverages – A taxpayer may make an application for a credit allocation on the first business day of January of the calendar year preceding the state fiscal year beginning on July 1 of the calendar year. The application must be made by June 30 of the state fiscal year for which the taxpayer is applying. For example, for a credit allocation for the 2011-2012 state fiscal year, taxpayers may apply for a credit allocation beginning on January 3, 2011. The application must be made on or before June 30, 2012.
(d) The Department will accept applications until the tax credit cap is reached, until the end of the state fiscal year, or until the end of the tax year for corporate income tax and insurance premium tax, whichever occurs first.
(4) NOTIFICATION.
(a) The Department will approve credit allocations on a first-come, first-served basis. Within ten days of receipt of an application, the Department will send written correspondence regarding the amount of the credit allocation for each tax applied for, or the reason the credit allocation could not be approved. For excise tax on liquor, wine, and malt beverages, the Division must approve the credit allocation before the Department will issue such correspondence.
(b) When approved, the Department’s approval letter will specify the period in which the contribution to the designated nonprofit scholarship funding organization must be made. Contributions must be made during the year specified in the approval letter. The organization receiving a contribution will issue the taxpayer a certificate of contribution signed by an officer or authorized representative of the organization containing:
1. Contributor’s name;
2. Contributor’s federal identification number;
3. Contributor’s license number issued by the Division, if applicable;
4. Amount of contribution;
5. Date of contribution; and
6. Name of eligible nonprofit scholarship funding organization.
(c) The amount of tax credit claimed on a tax return is limited to the amount of contribution contained in the certificate of contribution issued by an eligible nonprofit scholarship funding organization. The taxpayer must make the contribution before the credit is claimed on a tax return.
(d) No tax credit will be allowed when a taxpayer:
1. Fails to make the designated contribution;
2. Fails to make a contribution before claiming the tax credit on a tax return;
3. Claims the credit against tax due prior to the date the contribution is made;
4. Makes a contribution to an ineligible organization; or
5. Makes the contribution outside the period specified in the Department’s approval letter.
(e) When an eligible nonprofit scholarship funding organization is unable to accept the taxpayer’s contribution, or a part of the contribution, because of its obligations under Section 1002.395, F.S., the taxpayer may make a contribution or partial contribution to another eligible nonprofit scholarship funding organization. The organization unable to accept the taxpayer’s contribution must provide a written statement to the taxpayer declining the contribution. The taxpayer is required to keep the written statement with its books and records.
(5) TAX CREDITS.
(a)1. Corporate Income Tax – A tax credit of 100 percent of the contribution against any corporate income tax due for the tax year is allowed. The amount of the tax credit for a tax year:
a. Is limited to 75 percent of the corporate income tax due after application of any other allowable credits taken by the taxpayer for that tax year;
b. Must be reduced by the difference in federal corporate income tax due computed with the credit and without the credit; and
c. Must be added back to taxable income in determining Florida corporate income tax due.
2. Taxpayers must attach a copy of the certificate of contribution from each eligible nonprofit scholarship funding organization to the tax return on which the credit allocation, or a portion of the credit allocation, is taken as a tax credit.
(b)1. Insurance Premium Tax – A tax credit of 100 percent of the contribution against any insurance premium tax due under Section 624.509(1), F.S., for the tax year is allowed. The amount of the tax credit for a tax year is limited to 75 percent of the tax due after deducting:
a. Assessments made pursuant to Section 440.51, F.S. (workers compensation administrative assessments);
b. Credits for taxes paid under Sections 175.101 and 185.08, F.S. (firefighters’ and police officers’ pension trust funds); and
c. Credits for income taxes and emergency excise taxes paid under Chapters 220 and 221, F.S., and the salary credit allowed under Section 624.509(5), F.S., as these are limited by Section 624.509(6), F.S. (the 65 percent limitation).
2. Taxpayers must attach a copy of the certificate of contribution from each eligible nonprofit scholarship funding organization to the tax return on which the credit allocation, or a portion of the credit allocation, is taken as a tax credit.
(c)1. Sales and Use Tax – Beginning January 1, 2011, a tax credit of 100 percent of the contribution is allowed against any sales and use tax due imposed under Chapter 212, F.S., to any taxpayer who holds a valid Sales and Use Tax Direct Pay Permit issued by the Department.
2.a. Taxpayers must submit a copy of the certificate of contribution from each eligible nonprofit scholarship funding organization to:
Florida Department of Revenue
Revenue Accounting
P. O. Box 6609
Tallahassee, FL 32314-6609
b. Within ten days of receipt of the copy of the certificate, the Department will send written instructions on how to claim the credit allocation as a tax credit on a sales and use tax return remitted to the Department by electronic means.
(d)1. Tax on Oil and Gas Production – A tax credit of 100 percent of the contribution is allowed against any tax due on oil or gas production in Florida imposed under Sections 211.02 and 211.025, F.S. The tax credit may not exceed 50 percent of the tax due on the return on which the tax credit is taken.
2. Taxpayers must attach a copy of the certificate of contribution from each eligible nonprofit scholarship funding organization to the tax return on which the credit allocation, or a portion of the credit allocation, is taken as a tax credit.
(e)1. Excise Tax on Liquor, Wine, and Malt Beverages – A tax credit of 100 percent of the contribution is allowed against the following taxes administered by the Division.
a. Excise tax on liquor beverages imposed under Section 565.12, F.S.;
b. Excise tax on wine beverages imposed under Section 564.06, F.S., except excise taxes imposed on wine produce by manufacturers in Florida from products grown in Florida; or
c. Excise tax on malt beverages imposed under Section 563.05, F.S.
2. The tax credit taken on a return filed with the Division is limited to 90 percent of the tax due on the return. Taxpayers must attach a copy of the certificate of contribution from each eligible nonprofit scholarship funding organization to the tax return on which the credit allocation, or a portion of the credit allocation, is taken as a tax credit.
(f) Contributions to an eligible nonprofit scholarship funding organization are not payments of estimated tax or installment payments of tax.
(6) CARRYFORWARD OF UNUSED CREDITS.
(a) When a taxpayer is unable to use a tax credit during the period specified by the Department in the approval letter, because the taxpayer’s liability is insufficient, the taxpayer may apply to carry forward the unused tax credit amount for a period not to exceed three years. Taxpayers must apply on-line using the Department’s website at www.myflorida.com/dor/taxes/tax_incentives.html or submit an Application for Tax Credit for Contributions to Nonprofit Scholarship Funding Organizations (Form DR-116000, incorporated by reference in Rule 12-29.003, F.A.C.) requesting approval to carry forward the unused portion of the tax credit during the year in which the taxpayer wants to carry forward the unused tax credit. Applications to carry forward amounts beyond the three-year period will not be accepted by the Department. See paragraph (3)(a) for submitting the application to the Department.
(b) A separate application to carry forward an unused tax credit is required for each beverage license issued by the Division for which a separate return to report and pay the excise taxes on liquor, wine, and malt beverages is filed with the Division.
(c) Within ten days of receipt of the application, the Department will send written correspondence regarding the amount of the credit carryforward, or the reason the carryforward request could not be approved. For excise tax on liquor, wine, and malt beverages, the Division must approve the carryforward before the Department will issue such correspondence. No request will be approved when the application for a credit allocation carryforward is submitted for a period beyond three years from the year in which the credit allocation was approved.
(d) Examples.
1. Corporate Income Tax Example – A calendar year taxpayer applied for and was approved for a credit allocation against corporate income tax for the year ending December 31, 2011. To carry forward the unused portion of the credit allocation from its tax year ending December 31, 2011, to its tax year ending December 31, 2012, the taxpayer must apply to the Department, specifying the carryforward amount, on or after January 3, 2012. The application must be filed on or before December 31, 2012. If any unused portion of the credit allocation remains, the taxpayer must apply for a carryforward of the unused portion. Any unused carryforward from its tax year ending December 31, 2011, expires on December 31, 2014.
2. Insurance Premium Tax Example – A taxpayer applied for and was approved for a credit allocation against insurance premium tax due for calendar year 2010. To carry foward the unused portion of the credit allocation that was not taken on the 2010 insurance premium tax return (due March 1, 2011) to the 2011 insurance premium tax return, the taxpayer must appy to the Department, specifying the carryforward amount, on or after January 3, 2011. The application must be filed and approved on or before December 31, 2011. If any unused portion of the credit allocation remains, the taxpayer must apply for a carryforward of the unused portion. Any unused carryforward from its tax year ending December 31, 2010, expires on December 31, 2013.
3. Sales and Use Tax Example – A taxpayer who holds a Sales Tax Direct Pay Permit applied for and was approved for a credit allocation against sales and use tax due to the Department for the state fiscal year 2011-2012. The taxpayer paid the contribution to an eligible nonprofit scholarship funding organization on July 15, 2011, and submitted a copy of the certificate of contribution received from the organization to the Department. The taxpayer’s liability was insufficent to use the entire credit allocation on sales and use tax returns filed with the Department on or before June 30, 2012. To carry forward the unused portion of the tax credit to the 2012-2013 state fiscal year, the taxpayer must apply to the Department, specifying the carryforward amount during the 2012-2013 state fiscal year. The application must be filed and approved, and any approved carryforward must be taken on a sales and use tax return filed on or before June 30, 2013. If any unused portion of the credit allocation remains, the taxpayer must apply for a carryforward of the unused portion to be used during the following state fiscal year. Any unused carryforward from the 2011-2012 state fiscal year expires June 30, 2015.
4. Tax on Oil and Gas Production – The same application periods and credit carryforward periods that apply to a sales and use tax credit allocation apply to a credit allocation against the tax on oil and gas production.
5. Excise Taxes on Liquor, Wine, and Malt Beverages Example – A taxpayer who holds a liquor license issued by the Division applied for and was approved for a credit allocation against the liquor excise tax for returns due during the state fiscal year 2011-2012. The taxpayer’s liability was insufficent to use the entire credit allocation during that state fiscal year. To carry forward the unused portion of the tax credit to the 2012-2013 state fiscal year, the taxpayer must apply to the Department, specifying the carryforward amount during the 2012-2013 state fiscal year. The application must be filed and approved, and any approved carryforward must be taken on a return filed with the Division, on or before June 30, 2013. If any unused portion of the credit allocation remains, the taxpayer must apply for a carry forward of the unused portion to be used during the following state fiscal year. Any unused carryforward from the 2011-2012 state fiscal year expires June 30, 2015.
(e) A taxpayer may not convey, assign, or transfer a credit allocation to another entity unless all of the assets of the taxpayer are conveyed, assigned, or transferred in the same transaction.
(7) RESCINDMENT OF UNUSED TAX CREDITS.
(a) The rescindment provision allows credit allocations that will not be used by the taxpayer to be reallocated to other taxpayers who may use the credit allocation. Taxpayers must apply on-line using the Department’s website at www.myflorida.com/dor/taxes/tax_incentives.html or submit an Application for Rescindment of Tax Credit Allocation for Contributions to Nonprofit Scholarship Funding Organizations (Form DR-116100, incorporated by reference in Rule 12-29.003, F.A.C.) to the Department to rescind all or a portion of an unused credit allocation. See paragraph (3)(a) for submitting the application to the Department.
(b) An application for rescindment of the unused credit allocation by the Department will not be approved when:
1. The amount of credit allocation requested to be rescinded has been claimed as a credit on a previously filed return;
2. The taxpayer has had more than one approved rescindment of credit within the last three tax years; or
3. The allocation year is closed for all taxpayers. The allocation period for a calendar year is closed for all taxes and all taxpayers on November 30 of the subsequent calendar year.
(c) Within ten days of receipt of an application, the Department will send written correspondence regarding the amount of the rescindment, or the reason rescindment could not be approved. For excise tax on liquor, wine, and malt beverages, the Division must approve the rescindment before the Department will issue such correspondence.
(d) When the approval of a rescindment allows the tax credit cap for a state fiscal year to be reopened and available for allocation, the Department will notify each nonprofit scholarship funding organization that the tax credit cap is available for allocation.
Rulemaking Authority 1002.395(13) FS. Law Implemented 92.525(1)(b), 211.0251, 212.1831, 213.37, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (13) FS. History–New________.
12-29.003 Florida Tax Credit Scholarship Program; Applications.
(1)(a) The following application forms and instructions are used by the Department in its administration of the Florida Tax Credit Scholarship Program. These forms are hereby incorporated by reference in this rule.
(b) Copies of the application forms and instructions are available, without cost, by one or more of the following methods: 1) downloading the application from the Department’s Internet site at www.myflorida.com/dor/forms; or, 2) calling the Department at 1(800)352-3671, Monday through Friday, 8 a.m. to 7 p.m., Eastern Time; or, 3) visiting any local Department of Revenue Service Center or, 4) writing the Florida Department of Revenue, 5050 West Tennessee Street, Tallahassee, Florida 32399-0100. Persons with hearing or speech impairments may call the Department’s TDD at 1(800)367-8331 or (850)922-1115.
Form Number Title Effective Date
(2)(a) DR-116000 Application for Tax Credit Allocation for
Contributions to Nonprofit Scholarship
Funding Organizations (SFOs) (R. 02/11) ____
(b) DR-116100 Application for Rescindment of Tax Credit
Allocation for Contributions to Nonprofit
Scholarship Funding Organizations (SFOs)
(R. 01/11) ____
Rulemaking Authority 213.06(1), 1002.395(13) FS. Law Implemented 92.525(1)(b), 211.0251, 212.1831, 213.37, 220.1875, 561.1211, 624.51055, 1002.395(1)-(3), (13) FS. History– New________.