State Taxes at a Glance – Florida
| Type of Tax | 2023 |
|---|
| Individual Rates | None |
| Corporate / Business Tax Rates | 5.50% (flat tax – C Corporations only) |
| Gross Receipts Tax | None |
| Sales Tax | 7.02% (average) |
| Property Taxes | 0.91% as a percentage of primary home |
| Estate or Inheritance Tax | None |
State Income Taxes in Florida
The state of Florida does not have individual income tax. One of only nine (9) states in the union with no individual income tax.
State Business Taxes in Florida
The state of Florida does have a corporate income tax which is calculated one of two ways:
- 5.50% of Federal taxable income, or
- 3.30% of Alternative Minimum Tax (AMT) based on Federal AMT
Keep in mind: the first $50K of income is exempt. Secondly, income from flow-thru entities, such as S Corporations and LLCs are not subject to the Florida Corporate Income tax.
Sales and Property Taxes in Florida
Sales Tax – Like most states, Florida has both local and state sales tax. Florida sales tax rates are broken down as follows – 6.00% is the the average Florida sales tax rate, is 1.02% is the average local Florida sales tax rate (bringing the total average Florida sales tax rate to 7.02%).
Property Taxes – The average property tax rate for residential property in the state of Florida is 0.94%, which is right in line with the country’s average of 0.93%.
Property Tax Exemption – Florida has a Homestead Exemption on primary residence, up to $50,000 on appraised value. Please check with a Florida CPA as to how to apply for the Homestead Exemption. Here’s a link to the Florida Department of Revenue website with more information.
Hotel and Bed Sales Tax
Since Florida does not have a state income tax for individuals, they figured out different ways to generate revenue for the state. Some of those ways are the Florida Hotel Tax and various Florida Bed Taxes. The Florida Hotel Tax is a Sales Tax placed on rentals. If you own a short-term rental in Florida, you will have to submit monthly sales tax to the state. If you use a 3rd party online booking platform such as Airbnb or VRBO, they will collect and submit the Florida Hotel Tax. However, some counties have introduced additional Bed Taxes on top of the Florida Hotel Tax. For example, the county of South Walton created an additional 5% Bed Tax formally named the South Walton Tourist Development Tax. Some of these additional Bed Taxes are not collected by 3rd party online booking platforms and must be submitted separately.
Florida DMV Fees
Florida DMV fees not based on the value of the vehicle, rather on its weight. Therefore, they are not deductible on your individual tax return. You may look up your fees on the Florida DMV website here.
Florida Domicile
The state of Florida presumes you’re a resident is based on factual circumstances, more so than just the number days you’ve lived in the state. They use the following factors in their determination:
- Did you file a formal declaration with the State of Florida?
- Where are your children registered for school
- Where is your place of employment
- Date you terminated your prior states residency
- Proof of voter registration
- Have you obtained a Florida driver’s license
- Address listed on your Federal Tax Returns
State Tax on Social Security Benefits
Since Florida does not have an individual income tax, social security benefits are not taxed in the “Sunshine State.”
Payroll Taxes in Florida
Unemployment taxes usually consist of three factors. They are the wage base, range of rates, number of schedules. Below is an outline of the three.
- Wage Base – Florida has a wage base of $7,000
- UI Rates – range from 0.29% to 5.40%
- Schedules – Florida has a single schedule regarding UI taxes
Florida Business Entities – LLCs
The cost of setting up an LLC in Florida is not very expensive. Here are some important facts:
- Annual fee is $138.75 per year
- First year you file there is an additional setup fee of $125.00
- Secretary of State of Florida website – click here