The Florida Department of Revenue has issued Tax Information Publication (TPT) 18C01-0, which provides guidance on the state’s corporate income tax treatment of repatriation income under IRC section 965. Recently-enacted legislation in Florida adopted the Internal Revenue Code retroactively to January 1, 2018. Per the TPT, this means that Florida’s rolling conformity follows the computation of federal taxable income, including any section 965 income required to be included in the last taxable year beginning before January 1, 2018. Under Florida law, federal taxable income, adjusted by Florida modifications, is the starting point in computing state taxable income. After noting that recent IRS guidance instructs taxpayers to compute repatriation income outside the standard computations of federal taxable income, the TPT states that generally, repatriation income under section 965 does not flow into federal taxable income. There is no Florida addition under the state’s law for repatriated income excluded from the federal income tax computation. Therefore, no Florida corporate income tax is due on repatriation income that is excluded from the standard computation of federal taxable income. In addition, repatriation income is excluded from the Florida apportionment fraction computation. If, however, repatriation income flows into federal taxable income, as it does for REITs, repatriation income is included in the starting point of the Florida corporate income tax computation. Florida then provides a subtraction modification for Subpart F income, which includes section 965 income, net of direct and indirect expenses incurred in the taxable year. Please contact Jeremy Dukes at (954) 847-3971 with questions on the Florida guidance.