FL SALT Implications of the OBBBA: What Florida Businesses Need to Know

Introduction: What Is the OBBBA and Why Florida Businesses Should Pay Attention

The One Big Beautiful Bill Act (OBBBA) was signed into law on July 4, 2025, bringing sweeping federal tax reforms that affect individual and corporate taxpayers nationwide. But in Florida—a state with no individual income tax and a corporate tax system based on static conformity to the Internal Revenue Code (IRC)—the effects are anything but immediate. This article explains how the OBBBA may (or may not) impact Florida corporate taxpayers, what static conformity means in practice, and what to expect from the Florida Department of Revenue.

Florida’s Static Conformity: Why Federal Tax Changes Don’t Automatically Apply

Florida is a static conformity state, meaning it adopts the federal IRC only as of a specific date chosen by the Legislature. New federal tax provisions have no effect on Florida corporate tax law until the Florida Legislature acts to adopt them.

Historical IRC Conformity Timeline

• 2024 IRC – TIP 24C01-02, issued November 6, 2024
• 2023 IRC – TIP 23C01-04, issued July 28, 2023
• 2022 IRC – TIP 22C01-03, issued May 9, 2022
• 2021 IRC – TIP 21C01-01, issued July 30, 2021

Key SALT Provisions in the OBBBA

The OBBBA includes substantial reforms to the federal state and local tax (SALT) deduction for individual taxpayers, including:

• A temporary increase in the SALT cap to $40,000 for most filers in 2025
• Annual inflation adjustments through 2029
• Reversion of the cap to $10,000 starting in 2030
• A phase-down of the deduction for high-income earners, reducing the allowable deduction by 30% of the excess over a specified MAGI threshold
• No changes to the federal pass-through entity tax (PTET) deduction rules

Why These Federal Changes Don’t Affect Florida

Florida imposes no personal income tax, so the changes to the SALT deduction cap do not apply to individual Florida residents. For corporations, Florida begins with federal taxable income, but then requires state-specific adjustments. Itemized deductions like the SALT cap do not factor into that calculation.

Florida’s Corporate Adjustments: Section 220.13, F.S.

Florida law requires specific adjustments to federal taxable income before calculating state income tax liability. These include:

• Bonus depreciation under IRC § 168(k)
• Qualified improvement property (QIP) depreciation
• 100% deductible business meals under federal law
• Film, television, and theatrical deductions under IRC § 181

Practical Planning Considerations for Florida Taxpayers

1. Wait for Formal Conformity: Florida will not adopt OBBBA provisions until legislative action occurs and a TIP is issued.
2. Watch for Retroactive Adoption: If Florida follows its usual pattern, any conformity will be retroactive.
3. Anticipate Continued Decoupling: Even after conformity, Florida frequently modifies or excludes federal deductions through additional statutory adjustments.
4. Monitor PTET Guidance: While the OBBBA made no changes to federal PTET treatment, Florida’s treatment remains unchanged unless new legislation is passed.

Bottom Line

As of now, the OBBBA has no impact on Florida corporate income tax. The state’s static conformity framework ensures that federal changes won’t apply until the Legislature explicitly adopts them—and even then, only with possible exceptions or limitations.

• The increased SALT deduction cap has no bearing on Florida returns
• Federal tax changes under OBBBA will not be reflected in Florida filings
• Taxpayers should follow the latest TIPs and monitor any changes to section 220.13, F.S.

Stay Informed

To stay up to date on Florida’s IRC adoption and the eventual treatment of OBBBA provisions:

• Follow the Florida Department of Revenue’s Tax Information Publications
• Consult Florida-specific tax counsel or advisors
• Prepare for retroactive conformity if and when it comes