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Florida Decouples From Some Federal COVID-19 Relief 

Posted on July 7, 2021

Florida Gov. Ron DeSantis (R) signed into law a bill decoupling the state from some federal COVID-19 relief.

H.B. 7059 updates the state's reference to the IRC to January 1, 2021, but decouples from some relief under the Coronavirus Aid, Relief, and Economic Security Act and the Consolidated Appropriations Act, 2021 (CAA; P.L. 116-260). The bill was signed into law June 29 and took effect immediately.

The bill was sponsored by Ways and Means Committee chair Bobby Payne (R), who warned during an April 16 committee meeting that failure to decouple from the changes would cost the state $255.4 million in fiscal 2022, with a recurring cost of $108.3 million.

H.B. 7059 decouples from a CARES Act provision that temporarily raised the limit on the business interest expense deduction in IRC section 163(j) from 30 percent adjusted taxable income to 50 percent ATI for tax years 2019 and 2020.

It also decouples from a provision in the CARES Act that changed the depreciable life of some qualified improvement property from 39 years to 15 years, known as the fix to the so-called retail glitch in the 2017 federal Tax Cuts and Jobs Act.

Florida has decoupled from federal bonus depreciation since 2008, according to an analysis of the bill

The analysis explains that “since 2009, Florida requires a taxpayer to add back to its taxable income the full amount deducted for bonus depreciation for federal purposes and then apply a straight-line seven-year depreciation schedule beginning with the year of the addback. The schedule applies notwithstanding any sale or disposition of the property that is the subject of the adjustments and regardless of whether such property remains in service in the hands of the taxpayer.”

The law decouples from a provision in the CAA that temporarily increased the business meal expense deduction from 50 percent to 100 percent for 2021 and 2022.

The law also does not adopt a provision in the CAA that extended an allowance for expensing costs of up to $15 million related to qualified film and television productions to December 31, 2025, thus making those expenses taxable in Florida, according to Payne

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