HB 1223 Summary

• Amends Florida corporate income tax law to limit deductions for intangible expenses, licensing fees, interest expenses, and management fees paid by a taxpayer to related entities, effective for tax years ending on or after December 31, 2011.

• Requires taxpayers to add back to taxable income intangible expenses, interest expenses, and management fees paid to related entities, unless specific exceptions apply (such as consolidated tax returns or Department of Revenue approval).

• Provides exceptions to the add-back requirement if the related entity is subject to income tax at 5.5 percent or higher, the recipient paid the amount to an unrelated third party, or other conditions are met with proper disclosure.

• Requires corresponding related entities to subtract related entity payments from their taxable income if subject to Florida taxation, and mandates taxpayers report detailed information about related entity transactions including recipient name, domicile, amount, and payment description.

• Establishes that failure to add required amounts or provide complete transaction information constitutes negligence for penalty purposes, and authorizes the Department of Revenue to adopt implementing rules and forms.