Allows businesses anywhere in Florida a 50% credit on Florida corporate income tax, insurance premium tax, or sales tax refund for donations to local community development projects. Donations must be made to an eligible sponsor conducting an approved community development project. The annual amount of credit granted is limited to $200,000 per firm and $10,000,000 for the state.
What are the advantages?
For each dollar donated, businesses may receive a 55.5-cent reduction in Florida tax liability (50 cents from the credit, 5.5 cents from the deductibility of the donation). The donation may also be deducted from Federal taxable income. · A five-year carry-forward provision is available for any unused portion of the corporate income tax credit (sales tax refunds are available for up to three years after the first application).
What are the limitations?
IRS rules for the valuation of donated goods may require depreciation recapture; therefore, the deduction may be decreased.· By reducing the state tax liability, state taxes deducted from federal income are decreased; therefore, the federal tax burden may increase.
How do I receive the credit?
The project sponsor submits a proposal to O.T.T.E.D. for approval and solicits donations from businesses. Businesses file form 8E-17TCA#01 to O.T.T.E.D. · Once the donation has been approved, a copy of the approval letter must be submitted with the state tax return or application for a sales tax refund. Project proposals must be recertified on an annual basis.
