SALT attorney Mark Holcomb provides commentary for the article “Business Tax Cut Likely to Trigger in 2019, Florida Governor Says.” The article appears in a February 2019 edition of Bloomberg Law News. Holcomb explains aspects of Florida’s response to how the 2017 Tax Cuts and Jobs Act affected the state’s corporate taxpayers.
Florida Tax Cut Issues:
The article, by Bloomberg reporter Chris Marr, focuses on the following:
- Legislature could change rate-cut plan in 2019
- Broader proposals responding to federal tax overhaul also likely
- Governor unveils $91B budget, with $300M in property tax relief, sales tax holidays
Tax Cuts and Jobs Act:
Marr gives an overview of how the state got to this point: “The potential corporate rate cut is a part of the state’s response to the 2017 federal tax law, which many business-side tax advocates said would result in unintentional state-level tax increases if states fully followed the new federal tax code.
Florida Corporate Taxpayers:
Marr also states, “Florida enacted the rate-cut trigger in 2018 to limit the impact on business taxpayers, while the state further studied* how to respond to the federal changes, such as limits on business deductions of net interest expense and taxation of certain foreign income.”
Holcomb adds to that by saying that although tax-collection figures for the first half of fiscal 2018-19 suggest the rate cut will be triggered, the numbers aren’t final and the Legislature could change the law. Marr indicates agreement that if and how much of a rate cut is dependent on the total corporate tax collections ending June 30, 2019.
There is also the issue of whether the Legislature will revise the law during its March session.
What’s Going to Happen?:
Holcomb very succinctly sums up the reality of the state’s current decision status, “It’s still somewhat up in the air.”
To read “Business Tax Cut Likely to Trigger in 2019, Florida Governor Says,” please click here. The PDF is provided with permission from Bloomberg Law News. It may be used for viewing purposes only.
Florida Sales Tax – South Dakota v. Wayfair:
Holcomb does add one final comment about a related tax issue that is expected to be considered in the upcoming legislative session. Florida lawmakers will likely discuss sales tax legislation in response to last year’s landmark Supreme Court decision in South Dakota v. Wayfair. For previous comments from Holcomb about South Dakota v. Wayfair, click here.
*Florida Department of Revenue’s Year-Long TCJA Impact Study:
So that corporate taxpayers fully understand the state’s process to the TCJA impact study, Dean Mead’s SALT Team has written extensively about the steps that the Florida Department of Revenue took throughout 2018 to make a determination about the corporate tax impact. This month the Florida DOR issued its final report. For details about the report, please click here.
About Mark Holcomb:
He has 33 years of experience practicing in state and local taxation. Holcomb represents clients before the Florida Department of Revenue and local taxing authorities, and in litigation at the trial and appellate levels. He advises clients on a broad range of state and local taxes, including corporate income and franchise tax, sales and use tax, documentary stamp tax, communication services tax, insurance premium tax, ad valorem tax and motor fuels tax, in tax controversy work and in planning opportunities. He may be reached at email@example.com.