Florida’s Airline Income Tax Apportionment Method Upheld

In the ongoing battle between JetBlue and the Florida Department of Revenue (DOR), a circuit court judge in Leon County recently ruled¹ in favor of the state, denying JetBlue’s claim of unconstitutional taxation under the federal Commerce Clause. JetBlue’s previous claims of unconstitutionality under the supremacy and foreign commerce clauses were dismissed² at the end of last year.

At issue is Florida’s statutory special airlines apportionment formula for purposes of calculating corporate income tax. Florida determines an airline’s taxable income by dividing the number of miles it carries passengers within the “Florida box”—a geographical area statutorily defined by latitude and longitude—by the miles it carries passengers everywhere. JetBlue’s position was that this box includes international waters and portions of other states where Florida has no authority to tax, which consequently violates of the Constitution’s commerce clause.

Judge Jonathan Sjostrom of the Florida Second Judicial Circuit decided that “Florida’s income tax applied to 7% of JetBlue’s income is fair by any reasonable, economic measure.” Based on JetBlue’s responses to the DOR’s interrogatories, JetBlue’s economic activity in Florida was much greater than the resulting apportionment percentage. The judge referenced the economic reality of JetBlue’s in-state payroll, revenue, property, and takeoffs and landings that each approached or exceeded 20% during the years at issue.

The judge also rejected the claim that the Florida statute violated the internal consistency test in the Supreme Court case Complete Auto Transit,³ stating that it is difficult to imagine how other states could enact an identical statute since it defines state territory based on specific geographic features within Florida. Judge Sjostrom felt that it was unlikely that an airline would be taxed on 100% of its income.

Why It Matters for Everyone 

The judge’s final point in rejecting JetBlue’s challenge was that the state’s alternative apportionment provisions protect an airline from an unreasonable level of Florida taxation. Florida statutes allow the taxpayer to petition for any of the following if an apportionment method does not fairly represent the extent of a taxpayer’s tax base attributable to the state:

• Separate accounting,
• Exclusion of any one or more factors,
• Inclusion of one or more factors that will fairly represent the taxpayer’s tax base attributable to the state, or
• Employment of any other method that will produce an equitable apportionment.

Greg Rottjakob, Ryan’s state income tax practice leader observed that “what is interesting and almost quite powerful in their analysis of alternative apportionment is how the state pushed back. Florida’s special apportionment is statutory, and the corresponding regulation indicates intent, not found in the statute, that the single factor sales is ‘in lieu of the three-factor formula,’ which is the default methodology in the state. Florida used the threat of three-factor apportionment, which would have significantly increased JetBlue’s Florida apportionment as a possible reasonable alternative apportionment to switch to (or remedy) if their current revenue miles calculation violated the Constitution. Is alternative apportionment the proper remedy or threat afforded the state when the statute on its face exceeds the jurisdictional boundaries of the state? As an aside that might have broader applicability, we have an instance where the state represented that true economic activity might be best represented by three-factor apportionment. In traditional businesses and industries that are heavily reliant on investment in capital and people, could the baseline of three-factor better demonstrate the economic activity in a state? In the DuPont Minnesota case,⁴ could the taxpayer have argued for the application of a three-factor as a more reasonable alternative apportionment formula than the method the state proposed?”

Ryan’s experts have extensive experience in applying for alternative apportionment. If you think you could benefit from this type of approach, please contact the Ryan tax professionals listed below. 

¹ JetBlue Airways Corporation and Subsidiaries v. Department of Revenue, Fla. Cir. Ct., No. 2024 CA1177, September 1, 2025.

² JetBlue Airways Corporation and Subsidiaries v. Department of Revenue, Fla. Cir. Ct., No. 2024 CA 001177, order December 18, 2024.

³ Complete Auto Transit, Inc. v. Brady, 430 U.S. 274 (1977).

⁴ E.I. duPont de Nemours and Company & Subsidiaries v. Commissioner of Revenue, Minn., No. A24-1601 (August 27, 2025). 

TECHNICAL INFORMATION CONTACTS: 

Greg Rottjakob
Principal
Ryan
813.568.9085
greg.rottjakob@ryan.com

Mary Bernard
Director
Ryan
401.272.3363
mary.bernard@ryan.com

Adam Weinreb
Director
Ryan
917.472.9420
adam.weinreb@ryan.com

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