Could the parent combine its current and grandfather-elected Florida groups into one consolidated return, and carry their prior net operating losses into it?

Plain-English summary

The parent could make a new election under section 220.131 to file one Florida consolidated corporate income tax return for tax year 2021 and later years.

Before the election, the affiliated group had been split between two Florida consolidated returns: one under Florida's older "grandfather election," which included only group members with Florida nexus, and another under the current consolidated-return rules. The full group already filed a consolidated federal return, and the Department concluded that the represented group met Florida's current requirements for a single election.

Net operating losses generated in earlier years by members joining the new Florida consolidated return could be used to the extent allowed by the Internal Revenue Code and Chapter 220. The Department imposed no additional Florida limitation.

What this means for you

The ruling recommends filing Form F-1122 for subsidiary consent and attaching a statement identifying the new election, the entities included, and those that had previously filed under the grandfather election.

It also recommends schedules showing which entity generated each prior NOL, the amount, and the year.

Common questions

Could the two Florida groups become one consolidated group? Yes, beginning with tax year 2021 under the facts presented.

Did the prior grandfather election prevent a new election? No. Section 220.131 permits the current election notwithstanding a prior consolidated-return election, subject to its requirements.

Were prior NOLs lost? No. Member NOLs could carry into the new group subject to the ordinary federal and Chapter 220 limits, with no additional limitation from the new Florida election.

What supporting information did the Department recommend? Form F-1122, an election statement identifying included entities, and entity-by-entity NOL schedules.

Citations and references

• Fla. Stat. § 220.131(1)-(5).
• Fla. Stat. § 220.15.
• Internal Revenue Code § 1502, as referenced in the advisement.

Source

• Landing page: Florida Tax Law Library
• Advisement: TAA 23C1-013

Original ruling text

QUESTION: Whether Taxpayer meets the requirements of s. 220.131, F.S., so that it can file a single
consolidated Florida corporate income tax return which would include some members who currently
file a consolidated Florida corporate income tax return filed under the provisions of Florida’s
“grandfather election,” for tax year 2021 and forward.
If Taxpayer can file a single consolidated Florida return, are NOLs generated under the historical
separate groups carried over to the new consolidated Florida return, without any limitation on the
NOLs?
ANSWER: Based on the facts provided by Taxpayer in its request, Taxpayer has met the requirements
to make a consolidated filing election under the current provisions of s. 220.131, F.S. Taxpayer can
file a single consolidated Florida tax return for tax year 2021 and going forward.
Florida net operating losses (NOL's) generated in previous tax years by members of the consolidated
group included in the consolidated Florida return under the "new" consolidated filing election may
be used to the extent allowed by the Internal Revenue Code and Chapter 220, F.S., with no additional
limitations.

October 19, 2023

Re:

Technical Assistance Advisement – TAA #: 23C1-013
(“Taxpayer”)
Corporate Income Tax – Consolidated Criteria
Section 212.031, Florida Statutes - (“F.S.”)
FEIN:
BP #:

Dear
This is in response to your letter
requesting this Department’s issuance of a
Technical Assistance Advisement (“TAA”) pursuant to Section(s.) 213.22, F.S., and Rule Chapter 1211 F.A.C, Florida Administrative Code, regarding the matter discussed below. Your request has been
carefully examined, and the Department finds it to be in compliance with the requisite criteria set

Technical Assistance Advisement
October 19, 2023
Page 2

forth in Chapter 12-11, F.A.C. This response to your request constitutes a TAA and is issued to you
under the authority of s. 213.22, F.S.
REQUESTED ADVISEMENTS
Whether Taxpayer meets the requirements of s. 220.131, F.S., so that it can file a single consolidated
Florida corporate income tax return which would include some members who currently file a
consolidated Florida corporate income tax return filed under the provisions of Florida’s “grandfather
election,” for tax year 2021 and forward.
If Taxpayer can file a single consolidated Florida return, are NOLs generated under the historical
separate groups carried over to the new consolidated Florida return, without any limitation on the
NOLs?
FACTS
Your request states that Taxpayer filed two separate consolidated Florida returns, separately
comprised of
and
until tax year 2021. Taxpayer is the parent of
and
. It files a consolidated federal return
and has property and nexus with Florida, in accordance with Florida’s requirements to file
consolidated.
currently files a consolidated federal return inclusive of
. Additionally, it files
a nexus only consolidated return under Florida’s “grandfather election”.
files a consolidated
Florida corporate income tax return.
Taxpayer wishes to file a single Florida consolidated corporate income tax return that includes all
members of its consolidated group for tax year 2021 going forward.
LAW AND REGULATIONS
Section 220.131, F.S., states:
(1) Notwithstanding any prior election made with respect to consolidated returns, and
subject to subsection (5), for taxable years beginning on or after September 1, 1984, any
corporation subject to tax under this code which corporation is the parent company of an
affiliated group of corporations may elect, not later than the due date for filing its return for
the taxable year, including any extensions thereof, to consolidate its taxable income with
that of all other members of the group, regardless of whether such member is subject to tax
under this code, and to return such consolidated taxable income hereunder, in which case
all such other members must consent thereto in such manner as the department may by
rule prescribe, provided:
(a)

Each member of the group consents to such filing by specific written
authorization at the time the consolidated return is filed;

(b)

The affiliated group so filing under this code has filed a consolidated return for
federal income tax purposes for the same taxable year; and

Technical Assistance Advisement
October 19, 2023
Page 3

(c)

The affiliated group so filing under this code is composed of the identical
component members as those which have consolidated their taxable incomes in
such federal return.

(2) Subject to subsection (5), the director may require a consolidated return for those
members of an affiliated group of corporations which are subject to tax and which would
be eligible to elect to consolidate their incomes under subsection (1), if the filing of separate
returns for such corporations would improperly reflect the taxable incomes of such
corporations or of such group.
(3) The filing of a consolidated return for any taxable year shall require the filing of
consolidated returns for all subsequent taxable years so long as the filing taxpayers remain
members of the affiliated group or, in the case of a group having component members not
subject to tax under this code, so long as a consolidated return is filed by such group for
federal income tax purposes, unless the director consents to the filing of separate returns.
(4) The computation of consolidated taxable income for the members of an affiliated
group of corporations subject to tax hereunder shall be made in the same manner and under
the same procedures, including all intercompany adjustments and eliminations, as are
required for consolidating the incomes of affiliated corporations for the taxable year for
federal income tax purposes in accordance with s. 1502 of the Internal Revenue Code, and
the amount shown as consolidated taxable income shall be the amount subject to tax under
this code.
(5) Each taxpayer shall apportion adjusted federal income under s. 220.15 as a member of
an affiliated group which files a consolidated return under this section on the basis of
apportionment factors described in s. 220.15. For the purposes of this subsection, each
special industry member included in an affiliated group filing a consolidated return, who
would otherwise be permitted to use a special method of apportionment under s. 220.151
or s. 220.153, shall construct the numerator of its sales, property, and payroll factors,
respectively, by multiplying the denominator of each such factor by the premiums, revenue
miles, or single sales factor ratio otherwise applicable under s. 220.151 or s. 220.153 in the
manner prescribed by department rule.
DISCUSSION, ANALYSIS and CONCLUSION
Your letter dated
, states that, for Florida corporate income tax filing purposes, a
single consolidated group of corporations has been split into two separate consolidated groups, with
one group filing its consolidated return under the "grandfather election," which allows corporations
that made a valid filing election under that provision to file returns that include only the corporations
in their consolidated groups that have Florida nexus. The second consolidated group files its Florida
corporate income tax return under the current consolidated filing provisions of s. 220.131, F.S. Your
letter asks if the parent company of the entire consolidated group may now make a "new"
consolidated filing election under the current provisions of s. 220.131, F.S., to file a single

Technical Assistance Advisement
October 19, 2023
Page 4

consolidated Florida corporate income tax return that includes all members of the consolidated
group, beginning with the 2021 tax year going forward.
Based on the facts provided by Taxpayer in its request, Taxpayer has met the requirements to make
a consolidated filing election under the current provisions of s. 220.131, F.S. Taxpayer can file a single
consolidated Florida tax return for tax year 2021 and going forward. It should include Form F-1122
(Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax
Return) with its return. We would also recommend that an attachment be included with the return
in which the "new" consolidated filing election is made, stating that the taxpayer is making a "new"
consolidated filing election and which entities will be included in that return and future returns,
versus the entities that were filing "grandfather election" returns in prior tax years.
Florida net operating losses (NOL's) generated in previous tax years by members of the consolidated
group included in the consolidated Florida return under the "new" consolidated filing election may
be used to the extent allowed by the Internal Revenue Code and Chapter 220, F.S., with no additional
limitations. Schedules should be included with the return that show the name of the entities that
generated the NOL's and the amount of NOL each entity generated, by year.
This response constitutes a TAA under s. 213.22, F.S., which is binding on the Department only under
the facts and circumstances described in the request for this advice, as specified in s. 213.22, F.S. Our
response is predicated on those facts and the specific situation summarized above. You are advised
that subsequent statutory or administrative rule changes, or judicial interpretations of the statutes
or rules, upon which this advice is based, may subject similar future transactions to a different
treatment than expressed in this response.
You are further advised that this response, your request and related backup documents are public
records under Chapter 119, F.S., and are subject to disclosure to the public under the conditions of s.
213.22, F.S. Confidential information must be deleted before public disclosure. In an effort to protect
confidentiality, we request you provide the undersigned with an edited copy of your request for TAA,
the backup material and this response, deleting names, addresses and any other details which might
lead to identification of the Taxpayer. Your response should be received by the Department within
ten (10) days of the date of this letter.
If you have any further questions with regard to this matter and wish to discuss them, you may
contact me directly at (850)717-6326.
Sincerely,

Denise Smith
Denise Smith
Tax Law Specialist
Technical Assistance & Dispute Resolution
(850)717-6326

Technical Assistance Advisement
October 19, 2023
Page 5

CC:

Record ID: 7000860905

Technical Assistance Advisement
October 19, 2023
Page 6

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