Florida lawmakers sent House Bill 7031 to Gov. Ron DeSantis after approving legislation that updates the state’s tax code but does not adopt certain federal corporate tax changes.

The bill adopts the Internal Revenue Code as of January 1, 2026. It does not conform to tax provisions in the federal One Big Beautiful Bill Act that lawmakers said could reduce Florida revenue by as much as $3.5 billion over time.

The House passed the measure 109 to 0 in final form on March 12 after earlier approval in both chambers. The bill marks a change from Florida’s usual practice of following federal corporate tax changes more closely.

State economists project a surplus for the fiscal year that begins in July 2026, followed by projected shortfalls in later years if current spending levels continue. Legislative leaders cited those budget projections during negotiations over the state budget.

The bill also includes other tax changes. It repeals the 2% sales tax on commercial property rentals effective October 1, 2025. It also creates a Homebuyer Workforce Tax Credit for businesses that provide housing support for qualifying employees, with credits generally ranging from $2,000 to $3,000 per employee and a $5 million annual cap.

The measure also changes several consumer tax provisions. It moves Florida’s back-to-school sales tax holiday to July 20 through August 20, 2026. It also creates sales tax exemptions for certain items, including camping lanterns priced under $30, and expands Save Our Homes property tax portability rules for some homeowners.

Florida has generally conformed its corporate income tax to the federal code to simplify compliance. Under the new approach, businesses may need to track differences between federal and Florida rules for provisions the state does not adopt.

If signed, the commercial rent tax repeal would take effect October 1, 2025. Most other provisions would begin July 1, 2026. The Department of Revenue is expected to issue guidance on how the partial conformity rules will be applied.

Source: Florida lawmakers ‘Decouple’ from federal tax cut bill | Observer