Florida has enacted legislation providing a deduction for global intangible low-taxed income (GILTI), retroactive to January 1, 2018. The legislation extends corporate income and bank franchise tax rate relief and refunds resulting when collections exceed forecasts. The new law also mandates corporate reporting of the impact of federal tax reform to the Department of Revenue. [H.B. 7127, enacted 6/28/19]
H.B. 7127 follows the recommendation of the Florida Department of Revenue in its report issued in February on the impact of federal tax reform. That report stated, “Given possible constitutional issues, policymakers may wish to consider creating a subtraction in Florida law for GILTI income to the extent it is included in taxable income[.]” The state’s decision to decouple from GILTI retroactive to January 1, 2018 could result in a significant refund opportunity for taxpayers that reported GILTI in their 2018 tax filings.
Taxpayers should review these changes for compliance purposes, including the newly enacted information reporting regime and its first due date of September 3, 2019, for taxpayers that file their 2018 (or short year 2019) returns prior to August 24, 2019.