(1) Florida Statutes § 220.151, states that a taxpayer providing transportation services (transportation company), or an insurance company, must apportion income to Florida using a single-factor formula, in lieu of the three-factor formula used in the general apportionment method.
Terms Used In Florida Regulations 12C-1.0151
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
- Personal property: All property that is not real property.
(2) Transportation Companies.
(a)1. Definition of taxpayer providing transportation services. A taxpayer providing transportation services is a business whose income is derived primarily from transporting people or goods from one location to another.
2. Corporations providing the following services, notwithstanding others, are not considered to be transportation companies:
a. Vessels carrying passengers to international waters where passengers cannot disembark from the vessel at points other than the origination point (cruises to nowhere);
b. Charter fishing boats;
c. Party boats;
d. Sightseeing rides on helicopters, airplanes, trolley cars, buses, or trains. However, charter bus lines and charter flight companies are considered to be transportation companies.
e. Delivery services in connection with the sale of tangible personal property. For example, a furniture company that delivers the furniture it sold is not a transportation company. Corporations whose primary business activity is the delivery of goods are transportation companies, whether or not the deliveries are for goods of affiliated or unrelated corporations.
f. Corporations leasing transportation equipment. A corporation leasing transportation equipment is not a transportation company and must use the general three-factor formula of apportionment, unless it petitions the Department to use an alternate method of apportionment as provided in Florida Statutes § 220.152, and rule 12C-1.0152, F.A.C., and is granted permission to do so. The method for calculating the sales factor and the property factor for corporations leasing aircraft is specifically described in paragraph 12C-1.0153(4)(d) and subparagraph 12C-1.0155(2)(d)2., F.A.C.
3. For purposes of apportionment under Florida Statutes § 220.151, corporations which own, lease, or charter vessels that carry passengers to international waters, and dock in ports (other than the origination point) where passengers can disembark, will be deemed to be transportation companies.
4. For tax years beginning on or after January 1, 1989, the term “taxpayer furnishing transportation services” in Florida Statutes § 220.151, includes taxpayers engaged exclusively in interstate commerce. Transportation companies that deliver or pick up goods or passengers in this state, as well as corporations that do not have a point of origin or termination within this state, are subject to the Florida Income Tax Code whenever they have revenue miles in Florida.
1. Air mail, air express cargo, and passenger excess baggage shall be considered freight for the purpose of computing freight revenue miles and gross receipts from freight transportation.
2. “Dead miles” for which no revenue is earned are not included in computing the apportionment factor. For example, if a common carrier hauls freight from Miami to Atlanta and returns to Miami without any freight, the mileage from Atlanta to Miami is not included in the apportionment factor. Only the mileage from Miami to Atlanta is considered revenue miles.
(c) Apportionment Factor. The business income of a transportation company providing transportation services, partially or wholly in interstate or foreign commerce, shall be apportioned to this state by multiplying such income by a fraction, the numerator of which is the revenue miles of the taxpayer in this state and the denominator of which is the revenue miles of the taxpayer everywhere.
1. Example (1): Corporation R is a Florida-based air carrier providing charter ambulance and passenger services anywhere in the United States. During R’s taxable year ended December 31, 1992, its records of operations disclosed it carried passengers a total of 510,000 revenue miles of which 310,000 were within Florida. The apportionment fraction is computed as follows:
Passenger revenue miles: