What project-income method did Florida approve for the Capital Investment Tax Credit in TAA 25C1-003M?

Plain-English summary

The qualifying business proposed measuring project income with a weighted two-factor method: a one-third jobs-change factor and a two-thirds property factor for Florida apportionment.

The proposal also used an average of three prior years' tax liabilities before applying net operating losses as a base-period tax amount. Future incremental Florida tax from increased Florida income and the increased apportionment percentage would be compared with that base period.

The Department accepted the method. Project taxable income would then be multiplied by the applicable tax rate, subject to the Capital Investment Tax Credit limitations described in the advisement.

What this means for you

The approved calculation combined a project-specific jobs/property weighting with a three-year tax-liability baseline. It was a written agreement for this certified project, not a general formula for other taxpayers.

Common questions

What were the factor weights? One-third for job change and two-thirds for property.

What was the base comparison? An average of three prior years' tax liabilities before net operating losses.

Did the Department accept the proposal? Yes, under the represented facts.

Citations and references

• Fla. Stat. §§ 220.11, 220.13, 220.15, and 220.191 and Fla. Admin. Code r. 12C-1.0191, as cited in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 25C1-003M

Original ruling text

Florida Department of Revenue
Office of Technical Assistance

5050 West Tennessee Street Tallahassee FL 32399

Jim Zingale
Executive Director

floridarevenue.com

QUESTION: Taxpayer requests a written agreement between themselves and the Florida
Department of Revenue, concerning the method by which income generated by or arising out of a
“qualified capital investment project” shall be determined for purposes of the Florida Capital
Investment Tax Credit under s. 220.191, F.S.
ANSWER: The Department concurs with Taxpayer’s suggested calculation for the income generated
by or arising out of the qualifying project. However, Taxpayer is reminded that should the facts
provided in its request be determined to be substantially different, this TAA would not apply, and the
methodology may be deemed inappropriate.
September 9, 2025

Re:

Dear

Technical Assistance Advisement – 25C1-003M
Request for Written Agreement for Determination of Income
Sections 220.11, 220.13, 220.15, 220.191, Florida Statutes (“F.S.”)
Rule 12C-1.0191, Florida Administrative Code (“F.A.C.”)
(“Taxpayer”)
Business Partner Number:
FEIN:
Project ID:
Florida Department of Commerce (“Florida Commerce”)
:

This is in response to your request dated
, for a Technical Assistance Advisement
(“TAA”) pursuant to section 213.22, F.S., and Rule Chapter 12-11, F.A.C., regarding your request
for an agreement concerning how the method by which income generated by or arising out of
Taxpayer’s qualified capital investment project shall be determined for purposes of applying the
Capital Investment Tax Credit (“CITC”).
Section 220.191(5), F.S., addresses applications for CITC. That statute provides:
Applications shall be reviewed and certified pursuant to s. 288.061. The Department of
Economic Opportunity, upon recommendation by Enterprise Florida, Inc., shall first certify a
business as eligible to receive tax credits pursuant to this section prior to the commencement
of operations of a qualifying project, and such certification shall be transmitted to the
Department of Revenue. Upon receipt of the certification, the Department of Revenue shall
enter into a written agreement with the qualifying business specifying, at a minimum, the

Technical Assistance Advisement
September 09, 2025
Page 2

method by which income generated by or arising out of the qualifying project will be
determined.
Pursuant to Rule 12C-1.0191, F.A.C., the Department of Revenue has adopted TAAs as the
method for entering into such written agreements.
On
, Florida Commerce certified Taxpayer as eligible to receive tax credits under
s. 220.191, F.S. The Department of Revenue, having received said certification, has examined
your letter and has established that you have complied with the statutory and regulatory
requirements for issuance of a TAA. Therefore, the Department of Revenue is hereby granting
your request for a TAA. The Department of Revenue, in issuing this TAA, has relied on the
representations of Taxpayer and the certification of Florida Commerce. This TAA specifies the
method by which income generated by or arising out of the qualifying project will be determined
based on the facts as represented to the Department of Revenue. This response to your request
constitutes a Technical Assistance Advisement under Chapter 12-11, F.A.C., and is issued to you
under authority of s. 213.22, F.S.

ISSUE PRESENTED
In its letter dated
, Taxpayer requests a written agreement to determine how the
qualifying project’s income will be computed, based upon s. 220.191, F.S., and Rule 12C-1.0191,
F.A.C.

FACTS SUPPLIED BY TAXPAYER
Taxpayer is
.
The qualifying project (“Project”)
.
.
Project is required to create at least 100 net new-to-Florida full-time equivalent jobs at the project
location in
, paying an average annualized wage of at least $
(“project
wage”).
Taxpayer estimates that its cumulative capital investment will be $
includes
commencing operations of Project on or before

. The investment
. Taxpayer anticipates
, or

Taxpayer files as part of a consolidated corporate income tax return for Federal purposes but files
a separate corporate income tax return in the state of Florida.
For purposes of determining taxable income in the state of Florida, Taxpayer acknowledges the
requirement, by law, to use a three-factor apportionment method. Project is expected to increase
both property and payroll located in Florida, increasing Taxpayer’s Florida property and payroll
factors used to determine Taxpayer’s overall apportionment percentage. In addition, as a

Technical Assistance Advisement
September 09, 2025
Page 3

, Project is also expected to increase Taxpayer’s sales sourced to the state of
Florida. Taxpayer asserts that the result is a disproportionate increase in Taxpayer’s Florida
apportionment percentage for purposes of calculating the Company’s Florida Corporate Income
tax liability.
To create a more equitable basis of measurement for purposes of determining the annual income
tax liability generated by or arising out of the Project eligible to be offset by CITC, CS &
Co. proposes using an average of
,
, and
tax liabilities, an average of the most
recent prior three years’ tax liabilities, prior to application of any net operating losses, to establish
the base period tax amount.
calculated the Company’s average
Florida apportionment percentage, income tax liability (ignoring NOLs) for tax years
,
,
and
, and average income tax liability to be as follows:

The incremental tax paid in future years based on the increased income earned in Florida, as well
as the tax associated with the increased apportionment percentage should then be compared to
that base period tax of $
. The increase should be used to establish the increase in
business income associated with the project to determine the CITC available.
Taxpayer asserts that this is a reasonable methodology as the new investment in land, buildings,
equipment, and employment will ultimately result in an increase in Taxpayer’s overall Florida
three-factor apportionment measurement of property, payroll and sales. Utilizing a three-year
average Florida tax liability basis of
, and
will prevent Taxpayer from being
penalized via gross incremental taxes as a result of Project and allow for Taxpayer to remain
competitive.

LEGAL AUTHORITY
Section 220.11(1), F.S., states in part:
(1) A tax measured by net income is hereby imposed on every taxpayer for each taxable
year commencing on or after January 1, 1972, and for each taxable year which begins
before and ends after January 1, 1972, for the privilege of conducting business, earning
or receiving income in this state, or being a resident or citizen of this state. Such tax shall
be in addition to all other occupation, excise, privilege, and property taxes imposed by this
state or by any political subdivision thereof, including any municipality or other district,
jurisdiction, or authority of this state….

Section 220.15(1), F.S., states in part:

Technical Assistance Advisement
September 09, 2025
Page 4

(1) Except as provided in ss. 220.151, 220.152, and 220.153, adjusted federal income as
defined in s. 220.13 shall be apportioned to this state by taxpayers doing business within
and without this state by multiplying it by an apportionment fraction composed of a sales
factor representing 50 percent of the fraction, a property factor representing 25 percent of
the fraction, and a payroll factor representing 25 percent of the fraction. …
Section 220.191, F.S., states in part:
(1)

DEFINITIONS.—For purposes of this section:

(b) “Commencement of operations” means the beginning of active operations by
a qualifying business of the principal function for which a qualifying project was
constructed.
(c) “Cumulative capital investment” means the total capital investment in land,
buildings, and equipment made in connection with a qualifying project during the
period from the beginning of construction of the project to the commencement of
operations.
(d) “Eligible capital costs” means all expenses incurred by a qualifying business in
connection with the acquisition, construction, installation, and equipping of a
qualifying project during the period from the beginning of construction of the project
to the commencement of operations, including, but not limited to: …
(e) “Income generated by or arising out of the qualifying project” means the
qualifying project’s annual taxable income as determined by generally accepted
accounting principles and under s. 220.13

(h) “Qualifying business” means a business which establishes a qualifying project
in this state and which is certified by the Department of Economic Opportunity to
receive tax credits pursuant to this section.

(2)(a) An annual credit against the tax imposed by this chapter shall be granted to any
qualifying business in an amount equal to 5 percent of the eligible capital costs generated
by a qualifying project, for a period not to exceed 20 years beginning with the
commencement of operations of the project. …The annual tax credit granted under this
section shall not exceed the following percentages of the annual corporate income tax
liability or the premium tax liability generated by or arising out of a qualifying project:

1. One hundred percent for a qualifying project which results in a cumulative
   capital investment of at least $100 million.
2. Seventy-five percent for a qualifying project which results in a cumulative
   capital investment of at least $50 million but less than $100 million.
3. Fifty percent for a qualifying project which results in a cumulative capital
   investment of at least $25 million but less than $50 million.

Technical Assistance Advisement
September 09, 2025
Page 5

(d) If the credit granted under subparagraph (a)1. is not fully used in any one year
because of insufficient tax liability on the part of the qualifying business, the unused
amounts may be used in any one year or years beginning with the 21st year after the
commencement of operations of the project and ending the 30th year after the
commencement of operations of the project.

(4) Prior to receiving tax credits pursuant to this section, a qualifying business must
achieve and maintain the minimum employment goals beginning with the commencement
of operations at a qualifying project and continuing each year thereafter during which tax
credits are available pursuant to this section.

(8) The Department of Revenue may specify by rule the methods by which a project’s pro
forma annual taxable income is determined.
Rule 12C-1.0191(1)(a)1., F.A.C., states:
In situations where the applicant is using a separate corporate entity to account for the
activities of the qualifying project, the taxable income generated by that entity as reported on
the return filed pursuant to section 220.22(1), F.S., will be used to determine the amount of
income tax due and the subsequent amount of the credit that will be available for use. If the
applicant has other activities not related to the project reported on this return, a pro forma
attachment will be required to separately account for the taxable income generated by the
project, the resulting amount of tax due, and the subsequent amount of the credit that will be
available for use.

DISCUSSION
On
, Florida Commerce issued a letter approving Taxpayer’s project for
participation in Florida’s CITC program, and indicated in its letter that the qualifying project will be
located in a
The
certification approval entitles the project to eligibility for an annual tax credit against the corporate
income tax imposed if certain criteria are met, in an amount equal to the lesser of the following
for up to twenty years, beginning with the commencement of operations:

1. Five (5) percent of the cumulative capital investment, which is estimated to be $
   , but must be at least $25 million;
2. Fifty (50%), seventy-five (75%), or one hundred percent (100%) of the annual corporate
   income tax liability generated by or arising out of the qualifying project, depending on
   the level of cumulative capital investment; or
3. The tax due on the separate Florida corporate income tax return of Taxpayer prior to
   the application of this credit that includes the income generated by or arising out of the
   qualifying project.
   Unused credits cannot be carried forward unless the qualifying project meets the requirements
   for credit carryovers provided in s. 220.191(2)(d), F.S. In addition, Florida Commerce has required

Technical Assistance Advisement
September 09, 2025
Page 6

the qualifying project to create and maintain at least 100 net new-to-Florida full-time equivalent
jobs paying an average annualized wage of at least $
at the project location by the
commencement of operations.
The “commencement of operations” (as defined in s. 220.191, F.S.) will not be deemed to occur
unless Taxpayer has provided Florida Commerce with evidence that it has met the investment
and job creation, and retention requirements as described in Florida Commerce’s Letter of
Certification.
Florida Commerce has required that the qualifying project meet certain criteria by the
commencement of operations. The “commencement of operations” (as defined in s. 220.191,
F.S.) will not be deemed to occur unless Taxpayer has provided Florida Commerce with evidence
that it has met the following criteria:

1. Capital investment of at least $25 million has been made at the project’s location
   in,
   ; and
2. Creation of at least 100 net new-to-Florida full-time equivalent jobs paying at least
   the project wage at the project’s location in
   .
   No annual CITC may be claimed without a Letter of Certification from Florida Commerce stating
   that the appropriate annual requirements have been met and/or maintained.
   Since all the activities in Florida are related to Project, Taxpayer has proposed using the taxable
   income determined on the separately filed Florida corporate income tax return as the income
   generated by or arising out of the qualifying project. This amount would be used to determine the
   tax liability of Project and the corresponding CITC. The Department concurs with Taxpayer’s
   methodology.
   The Department agrees with Taxpayer’s proposed weighted two-factor method to determine the
   income generated by or arising out of Project. The two weighted factors would be a 1/3 jobschange factor and a 2/3 property factor for apportionment in Florida. Project’s taxable income
   would then be multiplied by the applicable tax rate. The allowable CITC will be limited to the
   lesser of the limitations stated above.
   Pursuant to s. 220.191(2)(d), F.S., when the capital investment is at least $100 million, credit
   amounts not fully used in any one year because of insufficient tax liability on the part of the
   qualifying business may be used in any one year or years beginning with the 21st year after the
   commencement of operations of the project and ending with the 30th year after the
   commencement of operations of the qualifying project.
   The amount of carryover from any one taxable year is five (5) percent of the cumulative capital
   investment that is at least $100 million less the amount of capital investment tax credit that could
   be used on the tax return for the taxable year. The amount of carryover from a taxable year may
   not exceed five (5) percent of the cumulative capital investment that is at least $100 million.

CONCLUSION
Given the specific circumstances involved in this case, and based on the representation of
Taxpayer, the Department concurs with Taxpayer’s suggested calculation for the income

Technical Assistance Advisement
September 09, 2025
Page 7

generated by or arising out of the qualifying project based upon s. 220.191, F.S., and Rule 12C1.0191, F.A.C. However, Taxpayer is reminded that should the facts provided in its request of
, be determined to be incorrect or changed, the computation for the income
generated by or arising out of the project could be substantially different from what has been
agreed upon in this TAA.
This response constitutes a Technical Assistance Advisement under section 213.22, F.S., which
is binding on the Department only under the facts and circumstances described in the request for
this advice as specified in section 213.22, F.S. Our response is based on those facts and specific
situation summarized above. You are advised that subsequent statutory or administrative rule
changes or judicial interpretations of the statutes or rules upon this advice is based may subject
future transactions to a different treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions
of section 213.22, F.S. Confidential information must be deleted before public disclosure. In an
effort to protect confidentiality, we request you provide the undersigned with an edited copy of
your request for Technical Assistance Advisement, the backup material and this response,
deleting names, addresses and any other details which might lead to identification of the taxpayer.
Your response should be received by the Department within 15 days of the date of this letter.
Sincerely,

Denise L. Smith
Denise L. Smith
Tax Law Specialist
Office of Technical Assistance
(850) 717-6326
Cc:

Record ID: 7001543722

Office of Technical Assistance Satisfaction Survey

Technical Assistance Advisement
September 09, 2025
Page 8

The Florida Department of Revenue invites you to complete the online Office of Technical Assistance
Satisfaction Survey to help us identify ways to improve our service to taxpayers. The survey is an
opportunity to provide feedback on your recent experience with the Department’s office of Office of
Technical Assistance. To access the survey, place the following address in your browser’s access bar:
https://tadr.questionpro.com
When you open the survey, you’ll be asked to enter the following information. This information will
enable you to complete and submit the survey.
Notification number:

7001543722

Respondent code:

44

Tax type:

Corporate Income Tax

Correspondence type: Technical Assistance
If you need technical assistance accessing the survey, please email Douglas Charity at
[email protected].
Thank you.