Florida Revenue Department Proposes New Rules and Forms for Business Tax Credit Programs

TALLAHASSEE, Fla. — The Florida Department of Revenue (DOR) has issued a notice of proposed rulemaking to amend administrative rules and update public-use forms for several key business tax credit initiatives, including the Florida Tax Credit Scholarship Program. The proposed changes, detailed in a notice affecting Rule Chapter 12-29 of the Florida Administrative Code, are designed to streamline the administration of existing programs and formally incorporate two new credits set to become effective in 2026. The updates will directly impact businesses that participate in these programs, particularly motor vehicle dealers, and those planning to utilize the new tax incentives. While administrative updates like new forms and amended rules can seem like minor procedural adjustments, our experience shows they are critical touchpoints for business compliance. For small and mid-sized companies, especially those without dedicated tax departments, keeping track of these changes is a significant operational burden. An outdated form or a missed procedural step can result in a denied tax credit, jeopardizing a key part of a company's financial strategy. We have seen firsthand how these seemingly small details can lead to compliance issues or lost opportunities for businesses that contribute to programs like the Tax Credit Scholarship. This is precisely the kind of detailed work where professional guidance is essential. Ensuring that your business is using the correct, most current forms and following updated procedures is fundamental to sound financial management. C&S Finance Group LLC provides dedicated tax preparation and compliance services to help clients navigate these evolving state regulations, ensuring they can confidently claim the credits they are entitled to. Business owners can learn more about managing these obligations at csfinancegroup.com. The central purpose of the rulemaking is to provide an administrative framework for two new initiatives created by the Florida Legislature: the Home Away From Home Tax Credit and the Rural Community Incentive Program credit. According to the notice, these programs are slated to take effect on January 1, 2026. The DOR's proposal involves creating one new rule, amending four existing rules, and adopting four new public-use forms to manage the application, allocation, and transfer of these new credits. Specifically, the proposed amendments to Rule 12-29.003 (Public Use Forms) will incorporate by reference three new forms for the Home Away From Home Tax Credit and one new form for transferring a Rural Community Investment Program tax credit. The changes also clarify the order in which these new credits are calculated relative to the existing Florida Tax Credit Scholarship Program. For businesses already participating in current programs, the most immediate change involves the Florida Tax Credit Scholarship Program's Motor Vehicle Sales Tax Credit. The proposal includes an updated version of Form DR-HS1, the "Contribution Election" form that vehicle buyers use to donate a portion of their sales tax to a nonprofit scholarship-funding organization (SFO). The revised form is marked with an effective date of February 2025. This form allows a buyer to designate up to $105 of the state sales tax due on a vehicle purchase to an eligible SFO. Motor vehicle dealers, county tax collectors, and private tag agencies are responsible for providing this form to customers and retaining the completed copies in their records. The use of the correct version of the form is critical for compliance. These businesses collect the contributions and remit them to the designated SFO, which in turn must file a monthly report (Form DR-HS3) with the DOR detailing all contributions received. The state's compliance framework includes measures to ensure contributions are properly handled. According to the DOR, the department is required to notify an SFO if it finds that a dealer or agency claimed a tax credit but failed to remit the corresponding contribution. This multi-layered oversight, which involves the Department of Education and the Chief Financial Officer in addition to the DOR, underscores the importance for participating businesses to maintain meticulous records and adhere to all procedural requirements. Beyond the motor vehicle credit, the broader tax credit programs offer significant strategic value for contributing businesses. Unused credits from the scholarship program can be carried forward for up to 10 years. The rules also permit a credit to be transferred to another entity within the same affiliated corporate group, a process managed with Form DR-116200, "Notice of Intent to Transfer a Tax Credit." The proposed rules are now in a public review phase. Affected businesses and stakeholders will have the opportunity to comment before the rules are finalized. Companies participating in or planning to utilize Florida's tax credit programs should monitor the final adoption of these changes to ensure their internal processes and forms are updated by the 2025 and 2026 effective dates.