State waives all penalties from glitch in tax code

TALLAHASSEE - Taxpayer penalties that may result from a glitch in a new corporate tax law will be waived, the state's revenue director told Gov. Charlie Crist and the Florida Cabinet on Thursday.

Linda Echeverri told the panel, which oversees the Department of Revenue, that she will issue an order to that effect Monday based on a promise by legislative leaders to pass a bill that would fix the problem at the first available opportunity but no later than the regular 2009 legislative session.

"In the unlikely event that doesn't happen," Echeverri said, corporate taxpayers "would not be subject to penalties."

Florida TaxWatch, a private state budget watchdog group, has urged Gov. Charlie Crist or legislative leaders to call a special session to fix the glitch. It also could come up if lawmakers meet in special session to deal with a growing state budget deficit.

The new law was designed to avoid a loss of state tax revenue by decoupling Florida's corporate income tax from the federal economic stimulus package that allows a 50 percent bonus depreciation and an additional expense allowance. As a result, corporations cannot apply the federal tax breaks to their state taxes, but a mistake in drafting resulted in an unintended consequence. By taking the bonus depreciation on their federal taxes, corporations also would permanently lose half of the depreciation deduction on their state taxes.