In a tradition stretching back more than three decades, the Florida Institute of Certified Public Accountants (FICPA) held its annual liaison meeting with the state’s Department of Revenue (DOR). The day’s agenda covered a wide range of topics— including general tax administration, artificial intelligence tools, technical assistance and an update from general counsel. The department also gave an update on its software system transformation initiative, which should not impact or interrupt how taxpayers report and remit their taxes.
Florida State Tax Relief
The department also discussed tax relief, specifically Governor Ron DeSantis’ plans for exemptions, holidays, and programs. They include:
- $100 million for creating a new venture capital tax credit program incentivizing investment in research, innovation, science, and engineering.
- The permanent extension of the sales tax exemption for Data Center Property, to incentivize artificial intelligence infrastructure growth, creating jobs and placing Florida at the forefront of research and technology.
- A 14-day Back-to-School sales tax holiday on school supplies, clothing, and computers.
- A bi-annual 14-day Disaster Preparedness sales tax holiday on hurricane supplies.
- A one-month-long Freedom Summer sales tax holiday on outdoor recreation items to be scheduled during the summer months.
- A seven-day Tool Time sales tax holiday on tools skilled workers and tradespeople need.
- A Second Amendment sales tax holiday on firearms, ammunition, and related accessories running from Memorial Day to the Fourth of July.
- A two-month boating fuel tax holiday, reducing the motor fuel taxes levied on the 90-octane, unleaded, ethanol-free gasoline blend (commonly known as REC-90) by 29.5 cents.
- A one-year exemption of the intangible tax on mortgages, savings on the first $500,000 of residential mortgages for the purchase of a primary, owner-occupied residence.
- A 2-year delay of the imposition of natural gas fuel taxes that would otherwise go into effect on January 1, 2026.
Audit and Refund Communications
The Legal Affairs Division of the DOR says it will clarify communications with taxpayers sent 60 days before an intent to audit. Meanwhile, the General Tax Administration unit has created two groups to address refunds. One will work to resolve the backlog of aged inventory, while the other will work on the backlog of current refunds. The DOR is placing emphasis on providing the necessary documentation to substantiate the claim for a refund to avoid misinterpretation between the department and the taxpayer.
The department’s Dispute Resolution Team is working to close at least 90% of open cases by January 30, 2026. The team is focusing on sales tax cases, as those are the largest revenue generator for the DOR. Disputes that come in go back to the audit level, and the team is emphasizing that a taxpayer must provide all relevant documentation for a protest as well as review the application of law to those documents.
TAA 24A-016
Discretionary Sales Surtax Limitation and When It Applies
The meeting also covered discretionary sales surtax limitations. The department’s Tax Counsel, Matthew Grant, says there is no backlog of cases despite having a large caseload. Grant wants to give guidance based on law but give discretion where appropriate. When bringing a petition under Chapter 120, he reminded the group to follow the rules and produce enough facts and information to come to a decision with the taxpayer by looking at the plain language of the law without having to go through civil litigation.
In addition, the department discussed several noteworthy TAA, such as the fact that Oracle was denied a sales tax refund claim because Oracle lacked standing to bring the case as it did not provide evidence of refunds to customers.
- TAA 13A-002 Discretionary Sales Surtax Limitation
- TAA 24A-014 Sales of Palladium, Gold, and Silver – a single sales transaction is exempt if the sales price exceeds $500.
- TAA 24A-017 – Repairs and Maintenance of Qualifying Aircrafts exempt from sales tax
Additionally, Counsel discussed an income tax case brought by a real estate developer who, prior to 2019, did not file Florida corporate income taxes. The taxpayer was applying a deduction – bonus depreciation for an asset purchased before becoming a Florida taxpayer. Straight line should have been used once the taxpayer became a Florida taxpayer. An addition is required equal to the amount deducted as bonus depreciation under s. 168(k), IRC (the “addback”) for assets placed in service before January 1, 2027. Amounts required to be added to federal taxable income for bonus depreciation are provided back to a Florida taxpayer through an annual subtraction over a seven-year period, equal to one-seventh of the amount of the addition, beginning with the taxable year of the addition.
The department is asking taxpayers to be open about their concerns if the application of the corporate income tax rules seems unjust. The DOR says it would rather a taxpayer challenge a statute than wait to be audited. The department acknowledges there are concerns about penalties and interest in the current economic climate.
Should you require assistance with the Florida DOR, Withum can help you contact the state’s Dispute Resolution team.
Author: Bonnie Susmano, JD, MBA | [email protected]m
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