clarification from the federal government and the Internal Revenue Service on how many aspects of the new tax law will be applied .
In fact , the uncertainty has left state analysts unable to say exactly what the fiscal impact of the piggyback bill could be on state revenue , although the assumption is it could have an undetermined “ negative ” impact through the end of this budget year and the new fiscal year , which begins July 1 . In the long term , it is anticipated to have a more positive impact .
To offset the initial negative impact of the federal law , Stargel ’ s piggyback bill is “ decoupled ” from the new federal tax code on several key provisions , including a measure in the federal law that allows corporations to immediately deduct the cost of new equipment and other capital .
Under Stargel ’ s bill , Florida corporations would have to spread the “ federal bonus depreciation ” over seven years and lessen its impact on the state tax collections , rather than trying to claim it immediately .
The decoupling is a routine occurrence for Florida and other states , according to a Jan . 29 report from the National Conference of State Legislatures on the new federal tax law .
“ The goal is to incentivize businesses to invest more and grow the economy , but states that conform would likely see a reduction in revenues in the short term ,” the legislative policy group said about the depreciation measure . “ Most states have already decoupled or modified the existing federal bonus depreciation provisions .”
But while some federal tax law changes could reduce state revenue , Florida officials and national analysts also say other provisions could increase tax collections for the states .
One issue still being analyzed is how state tax collections will be impacted as corporations bring back , or “ repatriate ,” overseas cash and assets to the United States .
“ This would raise revenue for the states in the short run as businesses bring back monies held overseas , but tax experts seem divided on whether this will be a small amount or a windfall ,” the NCSL report said .
In acknowledging the uncertainty and complexity of the federal tax changes , Stargel ’ s bill also would direct the state Department of Revenue to create a work group to continue to analyze the revamped tax code and offer recommendations .
The work group would begin offering periodic updates in May , with a final report to state lawmakers and the governor by next Feb . 1 , about a month before the start of the 2019 legislative session .
Stargel said the work group will provide “ the opportunity to give a little bit of time for us to figure out what this is doing and report back .”
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