NEWS & INSIGHTS
Florida Technical Assistance Advisement 24C1-003: Florida’s Capital Investment Tax Credit
In November 2024, the Florida Department of Revenue (DOR) issued Technical Assistance Advisement (TAA) 24C1-003. This advisement provides critical guidance for calculating income generated by a qualified capital investment project under Florida’s Capital Investment Tax Credit (CITC) program.
The CITC is one of Florida’s premier incentives to attract large-scale investments and job creation, fostering economic growth in strategically important sectors. This article explores the program’s mechanics, the statutory framework supporting TAA 24C1-003, and the facts surrounding the taxpayer’s request.
The Florida Capital Investment Tax Credit (CITC)
The CITC, established under Section 220.191, Florida Statutes (F.S.), offers an annual credit against Florida corporate income taxes to businesses undertaking significant capital investment projects in the state. The credit aims to encourage businesses to expand or relocate operations to Florida, generating economic growth and high-paying jobs.
Key features of the program include:
- Eligibility Requirements:
- Minimum Investment: A business must make a cumulative capital investment of at least $25 million in land, buildings, or equipment.
- Job Creation: The project must result in the creation of at least 100 net new full-time jobs paying an average annual wage above a specified threshold (determined by the location and industry).
- Certification by Florida Commerce: The project must be certified by Florida Commerce (formerly the Department of Economic Opportunity) before the commencement of operations.
- Credit Amount and Duration:
- The credit equals 5% of eligible capital costs for up to 20 years.
- The annual credit may not exceed the following percentages of the corporate income tax liability arising from the project:
- 100% for projects with investments of $100 million or more.
- 75% for projects with investments between $50 million and $100 million.
- 50% for projects with investments between $25 million and $50 million.
- Carryforward Provisions: Unused credits may be carried forward beginning with the 21st year after the project’s operations commence, extending to the 30th year, if the project meets specific criteria.
The CITC targets projects in designated High-Impact Performance Incentive Sectors, such as technology, life sciences, and advanced manufacturing, identified under Section 288.108, F.S.
Facts and Analysis
The taxpayer in TAA 24C1-003 is part of a consolidated corporate group that operates across multiple states. This group sought to undertake a large-scale capital investment project in Florida, encompassing significant investments in infrastructure, equipment, and employment.
The Project’s Commitments:
- Investment: Over $25 million in eligible capital costs, including land acquisition, construction, and equipment installation.
- Job Creation: At least 100 new full-time equivalent jobs in Florida, meeting a project wage exceeding state and local averages.
- Operations Timeline: The taxpayer committed to commencing operations by a specified date to align with CITC requirements.
The taxpayer proposed using a pro forma calculation to isolate income generated by the project from other corporate activities. This method is designed to comply with Rule 12C-1.0191, Florida Administrative Code (F.A.C.), which governs the determination of income attributable to qualified projects.
Approval and Issuance of TAA:
The Florida Department of Revenue approved the taxpayer’s proposed methodology for calculating taxable income, contingent on the accuracy of the facts presented. The advisement noted that any substantial deviation in facts could invalidate the methodology.
Statutory Framework for TAA 24C1-003
Section 220.11(1), Fla. Stat.
Section 220.13(1), Fla. Stat.
Section 220.15(1), Fla. Stat.
Section 220.191(5), Fla. Stat.
For more on Florida’s Corporate Tax Incentives, click HERE.
Additional Articles by the SALTy Orange at Moffa Tax Law:
Notice of Proposed Assessment – NOPA
Notice of Intent to Make Audit Changes DR-1215
DR-840 Notice of Intent to Audit Books and Records – 2025
What to Expect from a Florida Tax Audit
Motor Vehicle Sales Tax Rates by State – 2024
Jeanette Moffa, Esq.
Phone: (954) 800-4138
Email: [email protected]
Jeanette Moffa is a Partner in the Fort Lauderdale office of Moffa, Sutton, & Donnini. She focuses her practice in Florida state and local tax. Jeanette provides SALT planning and consulting as part of her practice, addressing issues such as nexus and taxability, including exemptions, inclusions, and exclusions of transactions from the tax base. In addition, she handles tax controversy, working with state and local agencies in resolution of assessment and refund cases. She also litigates state and local tax and administrative law issues.
