Florida's Corporate Income Tax
How Florida's corporate income tax affects your business.
Who Must File?
Corporations and artificial entities that conduct business, or earn or receive income in Florida, including out-of-state corporations, must file a Florida corporate income tax return unless specifically exempt. The return must be filed, even if no tax is due.
Sole proprietorships, individuals, estates of decedents, and testamentary trusts are specifically exempted and are not required to file a return.
Corporations and other artificial entities, including those located in other states, that are partners in a partnership or members of a joint venture doing business in Florida must file Florida Form F-1120 (Corporate Income/Franchise and Emergency Excise Tax Return). A partnership is required to file a Florida Partnership Information Return (Form F-1065) if it is doing business in Florida and a corporation is one of the partners.
A limited liability company that is classified as a corporation for Florida and federal income tax purposes is subject to the Florida Income Tax Code and must file a Florida corporate income tax return.
A limited liability company that is classified as a partnership for Florida and federal income tax purposes is required to file Form F-1065 if one or more of its owners is a corporation. In addition, the corporate owner of a limited liability company that is classified as a partnership for Florida and federal income tax purposes must file a Florida corporate income tax return.
A single member limited liability company that is disregarded for Florida and federal income tax purposes is not required to file a separate Florida corporate income tax return. However, the income of the company is not exempt from tax if it is owned by a corporation, whether directly or indirectly. In this case, the corporation is required to file Form F-1120 reporting its own income, together with the income of the single member limited liability company.
S Corporations and tax-exempt organizations are generally not required to file a Florida corporate income tax return if they do not have federal taxable income. If they have federal taxable income, however, they are then required to file a Florida corporate income tax return and pay any tax due.
Homeowner and condominium associations that file federal Form 1120 (U.S. Corporation Income Tax Return) must file Florida Form F-1120 or F1120A regardless of whether any tax may be due. If federal Form 1120-H (U.S. Income Tax Return for Homeowners Associations) is filed, a Florida return is not required.
Tax Base and Rate
Florida corporate income tax liability is computed using federal taxable income, modified by certain Florida adjustments, to determine adjusted federal income.
- A corporation doing business within and without Florida may apportion its total income. Adjusted federal income is apportioned to Florida using a three-factor formula. The formula is a weighted average, designating 25 percent each to factors for property and payroll, and 50 percent to sales.
- Nonbusiness income allocated to Florida is added to the Florida portion of adjusted federal income.
- An exemption of up to $5,000 is subtracted to arrive at Florida net income.
- Tax is computed by multiplying Florida net income by 5.5 percent.
Estimated Tax
If a corporation owes more than $2,500 in Florida corporate income tax annually, it must make estimated tax payments on a Declaration/Installment of Florida Estimated Income/Franchise and/or Emergency Excise Tax (Form F-1120ES). You can go to www.myflorida.com/dor/eservices to file and pay estimated tax via the Department’s Internet site.
Florida Alternative Minimum Tax (AMT)
Florida alternative minimum tax (AMT) must be computed if federal AMT was paid for the same tax year. Florida AMT is computed by multiplying Florida alternative minimum taxable income by 3.3 percent. The tax due is whichever amount is greater: the regular Florida corporate income tax or the Florida AMT. In subsequent years, a credit is allowed for corporations that paid AMT.
The amount of the available credit carried over to subsequent years is equal to the amount of Florida AMT paid over the amount of Florida "regular" tax that would have otherwise been due. The amount of available Florida AMT credit that may be taken in a tax year is limited to the amount of Florida "regular" tax that is due for that year over the amount of Florida AMT computed for that year.
Filing a Corporate Short Form (F-1120A)
A corporation that has zero tax due or owes less than $2,500 in tax may file Form F-1120A if all of the following criteria are met:
- It has Florida net income of $45,000 or less.
- It conducts 100 percent of its business in Florida.
- It does not report any additions to and/or subtractions from federal taxable income other than a net operating loss deduction and/or state income taxes, if any.
- It has no Florida Emergency Excise Tax (EET) liability.
- It is not included in a Florida or federal consolidated corporate income tax return.
- It claims no tax credits other than tentative tax payments or estimated tax payments.
- It is not required to pay Federal Alternative Minimum Tax.
Electronic Funds Transfer
You are required to remit taxes by electronic funds transfer (EFT) if you paid $20,000 or more in tax during the State of Florida's prior fiscal year (July 1 - June 30). Enroll for EFT via the Department's Internet site at www.myflorida.com/dor/eservices.
When Tax is Due
Generally, the Florida corporate income tax return is due:
- On or before the first day of the fourth month following the close of the tax year or
- The 15th day following the due date, without extension, for the filing of the related federal return, whichever is later. Any balance of tax owed must be paid in full by the due date of the Florida return. The Florida Partnership Information Return (Form F-1065) is due on or before the first day of the fifth month following the close of the tax year. If tax is not paid on time, penalties and interest will be assessed.
If an extension is requested, a Florida Tentative Income/Franchise and Emergency Excise Tax Return and Application for Extension of Time to File Return (Form F-7004) must be filed with full payment of tax by the original due date of the Florida return. Go to www.myflorida.com/dor/eservices to file and pay Form F-7004 via the Department’s Internet site. Extensions are valid for six months and only one extension is allowed.
Using Software to Prepare Your Return
You may purchase "alternative" forms software and use it to prepare and file your return. Go to www.myflorida.com/dor/forms/altforms.html for a list of approved software vendors. The list of vendors approved for 2008 will be available in January 2008.
Before using software, ask the vendor for proof that the forms in the software package have been approved by the Department of Revenue.
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