Florida State Taxes

Staff Reports
by Staff Reports

 

Florida’s constitution prohibits the enforcement of a Personal Income Tax. Instead, the state gets most of its revenue from its Corporate Tax and Sales/Use Tax, and cities and counties get the majority of their revenue from Property Taxes.

Florida State Tax ― Corporate Tax

Florida’s corporate tax is imposed on corporations and entities that conduct business and/or earn income in Florida. (This does not include sole proprietorships, individuals, estates of decedents, or testamentary trusts, if they do not have federal taxable income.) All corporations must file a corporate income tax return, even if no tax is due.

Florida corporate income tax liability is based on the amount of federal taxable income, with certain state adjustments.

  • Florida has a flat rate of 5.5% on all corporate income.
  • A corporation may apportion its total income using a three-factor formula with a weighted average: 25% to property, 25% to payroll, and 50% to sales.
  • An exemption of up to $5,000 is subtracted to compute Florida net income.

Corporate tax payments can be submitted electronically, using program transmitters approved by the IRS.

The Florida Alternative Minimum Tax (AMT) must be calculated if federal AMT was paid for the same tax year. The AMT is computed by multiplying Florida alternative minimum taxable income by 3.3%. A corporation must pay the AMT amount or the regular corporate tax amount, whichever is greater.

Florida State Tax ― Sales & Use Tax

Florida’s general sales tax rate is 6%, onto which counties may add their own discretionary sales surtax (ranging from 0.25% to 1.5% of the first $5,000 of a single item purchase price). This $5,000 limit does not apply to temporary rentals, commercial rentals, or services.

Florida sales tax is paid by consumers to the sellers and its applies to retail sales, admission charges, storage, rentals, and some services.

The Use Tax is imposed on out-of-state purchases brought into Florida that were not charged the proper Florida sales tax. It has the same rate of 6% and must be paid within six months of the purchase date. A penalty of 10% of the tax due is charged for late payments. (Note: If the tax owed is less than $1.00, a form does not have to be filed.) Also, credits are offered for sales taxes paid to another state (but not to another county) with a proof of payment. The Use Tax mostly applies to mail-order and Internet transactions.

Florida State Tax ― Property Tax

Property taxation is the main source of local government funding in Florida. While the Florida Department of Revenue oversees and advises on issues surrounding property tax, it is administered, levied, and collected by local officials.

Property tax applies to all real and personal property, and it is regulated by the Property Tax Administration (PTA). For homes purchased in Florida, the tax is paid based on the value of the property. Value is determined by the local county property appraiser, and the resulting tax is paid to the local county tax collector’s office.

There are 8 steps in the Florida property tax process:

  1. Property Tax Base: County property appraisers determine fair market value.
  2. Property Tax Millage Levies: Local governing boards determine the amount of revenue to be raised by property taxes.
  3. Property Tax Public Notification and Advertising: Notices of proposed property taxes are sent every August and public meetings are held for citizens.
  4. Property Tax Appeals Process: Taxpayers with questions or appeals may contact the property appraiser or the Value Adjustment Board.
  5. Billing of Property Taxes: Tax collectors mail bills around November 1st.
  6. Property Taxes Paid: Payments are due by the following March 30th.
  7. Property Tax Collections: Tax collectors receive and process all payments, and processes requests for refunds.
  8. Funding of Local Government Services: Tax collectors distribute funds to local governments.

Other Florida State Taxes

Florida does not have an inheritance tax or gift tax ― however, there are other taxes and fees that may apply to residents. These include the following:

Documentary Stamp Tax: A tax is levied on documents that transfer interest in Florida real property, written obligations (e.g., notes and bonds) to pay money signed in Florida, and liens (including mortgages) recorded in Florida. This tax is paid to the Clerk of Court or sent to the Department of Revenue.

Tourist Impact Tax: A 1% tax is imposed on rentals and leases of living quarters (hotels, motels, mobile homes, or condos) for a term of six months or less. It is charged upon payment of the rental/lease, collected by the Department of Revenue, and then distributed to the county where the tax was imposed.

New Tire Fee: A $1.00-per-new-tire fee is imposed on retail dealers, who can pass the fee on to purchasers. It is subject to sales tax and only applies to “new” motor vehicle tires that have never been used in Florida.

Communications Services Tax: Begun in 2001, this tax applies to cable, satellite, telecommunications, and related services. It consists of a 9.17% state tax rate (state rate of 6.8% plus gross receipts rate of 2.37%) and varying local rates.

Florida State Tax Resources

Florida Department of Revenue: dor.myflorida.com/dor

FL Department of Revenue “Electronic File and Pay Information” portal: dor.myflorida.com/dor/eservices

Register to collect and/or pay Florida state taxes: dor.myflorida.com/dor/eservices/apps/register

Florida “Discretionary Sales Surtax Information” (sales surtax rates by county): dor.myflorida.com/dor/dr15dss

FL Department of Revenue Property Tax Oversight: dor.myflorida.com/dor/property

Contact List for Property Appraisers in Florida: dor.myflorida.com/dor/property/appraisers

Florida Property Taxpayer’s Bill of Rights: dor.myflorida.com/dor/property/ptbillofrights

Order state tax forms using the Florida Department of Revenue “Form Ordering System:” taxapp2.state.fl.us/GTA_forms/order

Florida Taxpayer Service Centers (directory): dor.myflorida.com/dor/taxes/servicecenters

Florida’s Tax Freedom Day is April 9th.