SB 2040: Brownfield Cleanup Tax Credits, Caps, and Bonuses

The Florida brownfield cleanup tax credit, formally the Voluntary Cleanup Tax Credit (VCTC), returns 50 percent of eligible site rehabilitation costs as a credit against Florida corporate income tax, with an additional 25 percent available for projects that finish cleanup, build affordable housing, or add a healthcare facility. Awards are drawn from a $35 million annual statewide pool and capped at $500,000 per site per year for the base credit.¹ Senate Bill 2040, effective July 1, 2025, expanded the incentive structure that supports Florida’s Brownfield Redevelopment Act.

Who Qualifies

The threshold rule is simple: you cannot have caused or contributed to the contamination on or after July 1, 1997.² The credit is aimed at developers, local governments, and other parties taking on property they had no role in polluting.

If the site has actual contamination, the participant must sign a Brownfield Site Rehabilitation Agreement with the Florida Department of Environmental Protection (FDEP) that sets the cleanup schedule, technical standards, and milestones. All work under the agreement has to be supervised by a licensed professional engineer or professional geologist, who also certifies completion at the end of the project. The site itself must sit within a brownfield area formally designated by a local government through a resolution adopted after public hearings.³

What Costs Count Toward the 50 Percent Credit

Eligible costs are defined broadly as work necessary to carry out FDEP’s site cleanup requirements, plus the costs of removing solid waste from a brownfield site.⁴ In practice that covers environmental assessments, soil and groundwater remediation, laboratory testing, and professional engineering oversight.

Two categories are excluded. You cannot claim expenses related to the brownfield area designation process itself, and you cannot claim the cost of preparing and submitting the tax credit application.⁴

Per-Site and Statewide Caps

The base credit is capped at $500,000 per site per year, no matter how many parties are working there. When multiple applicants share costs at one site, credits are split in proportion to what each contributed.⁵ The statewide pool is $35 million per fiscal year. Applications that push the total over $35 million in a given year are not denied; they roll into the next year’s authorization.⁶

The 25 Percent Bonus Credits

Florida law adds three separate 25 percent bonuses on top of the base credit. Each is calculated on total eligible rehabilitation costs and each is independently capped at $500,000:

Affordable housing built on the site that meets Florida’s statutory definition and carries a recorded use restriction, once the Florida Housing Finance Corporation, a local housing authority, or another governmental agency certifies that construction received a certificate of occupancy.¹
A new healthcare facility or healthcare provider constructed and operational on the site, documented by a certificate of occupancy or operating license.¹
Cleanup completion, claimed in the final year of remediation when FDEP issues a No Further Action order for the site.¹

The bonuses can stack. A project that finishes cleanup, gets its No Further Action order, and then delivers affordable housing could claim both the completion bonus and the housing bonus alongside the base credit, each capped separately at $500,000.

How and When to Apply

The application window is short. It opens January 1 and closes January 31 of the year following the calendar year in which you paid the cleanup costs. If January 31 lands on a weekend, the deadline moves to the next business day. All claimed costs must be for work done between January 1 and December 31 of the prior year, and every invoice must be paid before you file.¹

Applications go to FDEP’s Division of Waste Management and can be submitted by hand delivery, mail, expedited shipping, email, or through the department’s online portal.⁶ The form is DEP Form 62-788.101(1), downloadable from FDEP’s website.⁷ You will need to categorize your expenses, include the site’s identification number, and attach proof of payment such as invoices and bank statements.

After FDEP verifies the technical and financial data, it issues a tax credit certificate. You use that certificate when filing your Florida corporate income tax return. Because the statewide pool is finite, submitting early in January is worth the effort.

If You Cannot Use the Credit Right Away

If your Florida corporate tax liability is too low to absorb the full credit in the year it’s issued, the unused portion carries forward for up to five years. Within that same five-year window you can also transfer all or part of the credit to another entity, and the transferee then has five years from the transfer date to use it.⁵ The transfer option matters most for municipalities and nonprofits, which do the cleanup but owe no corporate income tax themselves.

Other Florida Incentives That Stack

The Department of Revenue offers a sales tax refund on building materials used to construct affordable housing on or next to a brownfield site with an active rehabilitation agreement.⁸ The Legislature has directed state and local agencies to add financial, regulatory, and technical assistance on top of the credit where they can.⁹ For a site that has sat idle for decades, layering the base credit, one or more bonuses, and the sales tax refund can change whether the project pencils out.

What the Credit Does Not Cover

Two things worth flagging, because a tax credit alone does not resolve them.

First, cleanup liability. The credit is a Florida tax benefit; federal Superfund liability for prior contamination is a separate question governed by CERCLA’s bona fide prospective purchaser rules, which require completing “all appropriate inquiries” (currently the ASTM E1527-21 standard for Phase I assessments) before closing and meeting continuing obligations afterward.¹⁰¹¹ Handle that track separately from the credit application.

Second, post-cleanup obligations. Receiving a No Further Action order or a Site Rehabilitation Completion Order protects the site from having to meet future cleanup standards retroactively.¹² But if contamination remains in place at levels that are safe only under certain conditions, FDEP will require institutional controls: restrictive covenants recorded in the public record, local government controls, or memoranda of understanding that restrict future use of the property.¹³ Any engineering controls, such as caps or vapor barriers, come with an ongoing maintenance plan. These stewardship costs run with the land and should be budgeted from the start, not treated as an afterthought once the credit certificate arrives.

1
Florida Senate. Florida Code 220.1845 – Contaminated Site Rehabilitation Tax Credit
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Florida Senate. Florida Code 376.82 – Brownfield Site Rehabilitation; Eligibility
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The Florida Legislature. Florida Code 376.80 – Brownfield Site Rehabilitation Agreement
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The Florida Legislature. Florida Code 376.30781 – Tax Credits for Rehabilitation of Contaminated Sites and Brownfield Sites
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Florida Senate. Florida Code 220.1845 – Contaminated Site Rehabilitation Tax Credit
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Florida Department of Environmental Protection. Voluntary Cleanup Tax Credit
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Florida Department of Environmental Protection. Voluntary Cleanup Tax Credit Application and Affidavit
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Florida Department of Environmental Protection. Brownfields Program
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Florida Senate. Florida Code 376.84 – Brownfield Redevelopment Economic Incentives
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Office of the Law Revision Counsel. 42 USC 9601 – Definitions
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eCFR. 40 CFR 312.20 – All Appropriate Inquiries
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The Florida Legislature. Florida Code 376.30701 – Application of Risk-Based Corrective Action Principles to Contaminated Sites
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Florida Department of Environmental Protection. Institutional Controls Procedures Guidance