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TALLAHASSEE — One in five of the wealthiest corporations in Florida paid zero corporate income tax in 2020, according to a report published Thursday by the Florida Policy Institute.
The report is a damning indictment of Florida’s corporate income tax law and was released hours after Gov. Ron DeSantis signed off on Florida’s “Freedom First Budget,” which Democratic lawmakers decried Thursday as a favor to corporations.
The institute reported that 475 corporations — that earned over $50 million in 2020 — paid no corporate income tax, according to data acquired via a public record request from the state Department of Revenue.
What’s more, roughly 20% of corporations generating more than $250 million in revenue paid no corporate income tax either.
“The pandemic was well underway during tax year 2020, yet we had hundreds of ultra-wealthy companies in our state paying nothing in corporate income taxes while Floridians were struggling to maintain their livelihood,” said Sadaf Knight, CEO of FPI. “Florida’s tax code is in dire need of an overhaul.”
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The non-profit think tank pointed to a 2018 law, which automatically reduced the corporate income tax rate whenever state collections exceed their annual forecasts, for the large number of corporations whose tax bill was zero. Under the same law, which expired in 2022, the state further refunded some $624 million back to corporations.
In its report, the institute noted that Florida tax policy does not require multi-state corporations and their subsidiaries to report total domestic profits and discern what amount originated in Florida.
The institute contends, though, that requiring a “combined reporting” method would deter corporations that shift profits to sidestep Florida taxes. The same method could generate roughly $500 million in general revenue each year, according to the institute.
“We urge state lawmakers to consider enacting combined reporting requirements during the next legislative session,” added Knight.
The institute is a nonprofit organization that analyzes state policy and budget issues. More accountability in corporate income tax law, they contend, could lead to greater investment in healthcare, schools and more.
Jason Delgado is a reporter for the USA Today Network-Florida. He’s based in Tallahassee. Reach him at [email protected]