Florida’s depreciation rules run on two separate tracks. For the corporate income tax, Florida accepts your federal depreciation as a starting point but requires C-corporations to add back bonus depreciation and recover it in equal pieces over seven years. For the local tangible personal property tax, county appraisers ignore your federal schedules entirely and apply their own depreciation tables to figure out what your equipment is worth each January 1. Everything else, including Section 179, generally flows through from the federal return.
How Florida Builds on the Federal Return
Florida does not compute depreciation from scratch. The corporate income tax starts with federal taxable income and calls the result “adjusted federal income.”1Justia Law. Florida Code 220.13 – Adjusted Federal Income Defined Each year the legislature decides whether to update its conformity date to the current Internal Revenue Code; as of 2025, Florida conforms to the IRC as it existed on January 1, 2025.2The 2025 Florida Statutes. Florida Code 220.03 – Definitions
That piggyback approach means your federal MACRS calculations carry straight through to Florida. You keep one set of depreciation schedules. The adjustments come in only where Florida has decided a particular federal benefit is too generous to accept in full.
The Bonus Depreciation Add-Back
The one adjustment that reaches almost every corporation with significant equipment is the bonus depreciation add-back. When you claim bonus depreciation under IRC Section 168(k) federally, Florida requires you to add 100% of that deduction back to income for any asset placed in service before January 1, 2027.1Justia Law. Florida Code 220.13 – Adjusted Federal Income Defined
Florida does not take the deduction away. It stretches it. Starting with the year of the add-back, you subtract one-seventh of the added-back amount each year for seven years.3Florida Department of Revenue. Florida Corporate Income Tax Adoption of 2025 Internal Revenue Code The subtraction keeps running even if you sell or dispose of the asset before the seven years are up.1Justia Law. Florida Code 220.13 – Adjusted Federal Income Defined
A Worked Example
Say your corporation puts $700,000 of qualifying equipment into service in 2026 and claims full federal bonus depreciation. For Florida, you add the entire $700,000 back in 2026, then subtract $100,000 each year from 2026 through 2032. The lifetime deduction is identical to the federal number. Only the timing differs.
At the 5.5% rate, that first-year add-back lifts your Florida tax by $38,500 compared with the federal treatment. You get the money back through the annual subtractions, but the cash is tied up for years. For corporations placing large amounts of equipment in service in a single year, the Florida cash-flow impact is worth modeling before the purchase, not after.
If you have add-backs from several different years running at once, each one keeps its own seven-year schedule. Florida has no system that tracks these for you, so clean records of every add-back and its remaining balance are the taxpayer’s responsibility.
Section 179 Flows Through
Section 179 trips up many filers because the rule has shifted. For tax years beginning after December 31, 2007, and before January 1, 2015, Florida required an add-back of any Section 179 expense above $128,000, recovered over the same seven-year schedule used for bonus depreciation.1Justia Law. Florida Code 220.13 – Adjusted Federal Income Defined For tax years beginning in 2015 and later, the add-back is gone. The full federal Section 179 deduction flows through to the Florida return with no state-level adjustment.
If you are still working through a pre-2015 Section 179 add-back, those remaining annual subtractions continue on their original timeline.
What the One Big Beautiful Bill Act Changes
Federal law shifted meaningfully in 2025. The One Big Beautiful Bill Act permanently restored 100% bonus depreciation for qualifying property acquired and placed in service after January 19, 2025, reversing the phase-down that had cut the bonus percentage by 20 points per year since 2023.4Office of the Law Revision Counsel. 26 USC 168 – Accelerated Cost Recovery System
Florida’s add-back rule, as currently written, applies only to assets placed in service before January 1, 2027. Read literally, bonus depreciation on assets placed in service on or after that date would flow through to Florida with no add-back at all. The Florida Department of Revenue has pointed out that OBBBA was enacted after the 2025 legislative session ended and that the legislature will have its chance to respond during the session beginning in January 2026.3Florida Department of Revenue. Florida Corporate Income Tax Adoption of 2025 Internal Revenue Code
Two questions sit with lawmakers. Will they update the IRC conformity date to incorporate OBBBA? And will they extend the add-back past its January 1, 2027 sunset, keep the seven-year stretch alive, or let bonus depreciation flow straight through? Corporations planning major capital spending in late 2026 or 2027 should watch the 2026 session, because the answer determines whether a large purchase hits Florida income all at once or over seven years.
Tangible Personal Property Tax Uses Its Own Depreciation
The second depreciation system is unrelated to the income tax. Every Florida county levies an annual ad valorem tax on business tangible personal property — equipment, furniture, fixtures, and the like. County appraisers decide what each asset is worth as of January 1, and depreciation is the main tool they use to bring that value down from original cost.
The Florida Department of Revenue publishes standardized depreciation schedules and life-expectancy guidelines appraisers follow statewide.5Florida Department of Revenue. Tangible Personal Property These are not MACRS. An asset that is fully depreciated for income-tax purposes, with zero remaining basis on your federal return, can still carry assessed value for property-tax purposes. County schedules typically leave a residual, so the TPP bill continues even on equipment the IRS considers written off.
Any business owning tangible personal property in Florida on January 1 must file Form DR-405 with the county property appraiser by April 1.6Florida Department of Revenue. Form DR-405 – Tangible Personal Property Tax Return7Florida Senate. Florida Code 196.183 – Exemption for Tangible Personal Property8The 2025 Florida Statutes. Florida Code 196.183 – Exemption for Tangible Personal Property A late return draws a 5% penalty for each month or part of a month of delay, capped at 25%, and a complete failure to file brings a flat 25% penalty on the full tax.9Florida Department of Revenue. Tangible Personal Property10The 2025 Florida Statutes. Florida Code 193.072 – Penalties for Improper or Late Filing
Recapture When You Sell a Depreciated Asset
Depreciation recapture is a federal rule, but it reaches Florida through the usual conformity. When you sell a business asset for more than its depreciated basis, the IRS reclaims some of the earlier deduction by taxing part of the gain as ordinary income. That ordinary income lands in federal taxable income and then in your Florida corporate return.
For equipment, machinery, vehicles, and similar tangible personal property, Section 1245 treats the gain as ordinary income up to the full amount of depreciation previously taken.11Office of the Law Revision Counsel. 26 USC 1245 – Gain From Dispositions of Certain Depreciable Property Buy a machine for $100,000, depreciate it to $20,000, sell it for $75,000, and the whole $55,000 gain is ordinary income. Section 179 deductions and bonus depreciation count the same as regular depreciation for this purpose.
Depreciable real property follows Section 1250. Gain attributable to straight-line depreciation on buildings is taxed at a federal maximum of 25%. Any gain above the depreciation claimed falls under the regular long-term capital gains rates of 0%, 15%, or 20%.
The sale is reported on IRS Form 4797, which splits the gain into its ordinary and capital pieces.12Internal Revenue Service. Instructions for Form 4797 The combined result flows into federal taxable income and then into Florida’s starting point. If you previously added back bonus depreciation on the asset for Florida purposes, your seven-year subtractions keep running on their original schedule even after the sale.
Individuals and Pass-Through Entities
Florida has no personal income tax, and that single fact removes most state-level depreciation work for sole proprietors, partners, and S-corporation shareholders. A sole proprietor claims depreciation on federal Schedule C, including bonus depreciation and Section 179, and the net profit or loss moves to the federal 1040.13Internal Revenue Service. Instructions for Schedule C (Form 1040) Florida does not reach that income at all.
Partnerships and S-corporations compute depreciation at the entity level and pass the result to owners on Schedule K-1 for federal reporting. There is no Florida individual return to file, so there is no form on which an add-back or subtraction would even appear. The bonus depreciation add-back and seven-year recovery rules apply only to C-corporations and other entities that owe Florida corporate income tax.
The one place entity type does not matter is tangible personal property. Any business — proprietorship, partnership, S-corp, C-corp — that owns assessable equipment in Florida on January 1 must file the DR-405 by April 1 and will owe TPP tax on the appraised value.