TALLAHASSEE, Fla. — Florida lawmakers moved forward Wednesday with a tax cut bill that does not apply recent federal tax code changes to the state’s corporate income tax.
The choice to “decouple” from federal tax law represents a shift away from the state’s usual practice of aligning with federal updates.
The Republican-led Legislature usually connects the state’s corporate tax code to federal updates annually through a “piggyback” bill.
However, this year, lawmakers chose to keep the two codes separate after economists cautioned that aligning with the new federal law might lead to a substantial decrease in state revenue.
The legislative action comes after President Donald Trump delivered a State of the Union address on Tuesday evening. In his speech, Trump talked about the “One Big Beautiful Bill Act,” a law he signed last year. He mentioned that the tax cuts from this legislation are now benefiting Americans during tax season.
Florida is projected to face budget shortfalls of up to $7 billion in the coming years. In response, Republican legislative leaders have signaled their plan to curb state spending instead of approving large tax cuts—possibly amounting to billions—if federal policies are aligned.
State economists estimate that implementing the federal changes via a typical “piggyback” bill could result in a revenue loss of up to $3.5 billion next year.
To avoid this, the state plans to decouple, aiming to preserve its current corporate tax revenue while addressing the expected multi-billion-dollar shortfalls.
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