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Is My Business Subject to Florida’s Sales & Use Tax?

A business woman files her taxesAccording to the Tax Foundation, Florida ranks fourth nationwide in its State Business Tax Climate Index. This means that 46 other states impose greater tax burdens on businesses operating in their states. For corporations, Florida’s corporate tax rate declined from 5.5 to 4.4458 percent for tax years 2019 to 2021, raising Florida’s corporate tax favorability index from ninth to sixth nationwide.

No matter what kind of business you operate in Florida, you may be wondering which taxes your business will be required to pay, and which taxes your business will be exempt from.

If you’re operating or opening a business in or around Fort Lauderdale, or throughout South Florida in places like Miami, Boca Raton, and Sunny Isles, and you have questions about your taxes, contact me at Zuckerman Law, LLC. I have more than 30 years of experience in practicing tax law in state and federal courts throughout the United States and Florida. I will be happy to listen to your concerns and discuss your options with you.

Sales & Use Tax in Florida

As is well known, there is no individual income tax in Florida, though residents are still subject to federal taxation. When it comes to businesses, two taxes apply fairly universally: the sales tax and the use tax.

Each sale, admission, storage, or rental in Florida is taxable unless the transaction is exempt. The sales tax rate is 6 percent statewide with some exceptions: 4 percent is charged for amusement machine receipts, 5.5 percent on the lease or license of commercial real estate, and 6.95 percent on electricity.

Services are generally not taxable in Florida unless they involve repair services, which would require taxes to be collected on any parts used. Tangible products are taxable with the exception of groceries, some medicine and common household remedies, seeds and fertilizer, and prosthetic or orthopedic instruments.

Florida’s Discretionary Sales Tax

Many Florida counties also impose a discretionary sales surtax. The surtax is applicable when sales occur within the county imposing it, or when a sale is made and delivered into a county with a surtax. The rates, which are updated yearly, currently stand at 0.5 to 2.5 percent. The rate in Miami-Dade County currently stands at 1 percent. Broward County is also set at 1 percent.

Florida’s Use Tax

Use tax applies to items that are not taxed at the time of purchase. Generally, this means goods purchased in another state or online and then brought into Florida for “use.” This would normally only apply to a business if the business itself purchased items that were not taxed and then used them in the business. This could include items such as computers or furniture purchased online or through a catalog dealer that did not levy taxes. The owner would be required to pay a use tax on these items.

The use tax is 6 percent if the item you purchased was not charged any tax. If the seller charged you 4 percent in taxes, you would owe the difference – or 2 percent – to the State of Florida.

Effective July 1, 2021, Florida law now requires businesses making remote sales into Florida to collect and remit the 6 percent sales tax, along with any discretionary county taxes. Both in-state and out-of-state marketplace providers who plan to sell remotely (online, catalog, and the like) must register with the state.

Transient Rental Taxes

Counties are also allowed to impose transient rental taxes on rentals or leases of accommodations in hotels, motels, apartments, rooming houses, mobile home parks, RV parks, condominiums, or timeshare resorts for a term of six months or less. Both Broward County and Miami-Dade impose a 6 percent transient rental tax.

Corporate Taxes

Thanks to the Tax Cuts and Jobs Act (TCJA) of 2017, Florida’s corporate tax was adjusted downward to its current level of 4.4458 percent. The tax applies to traditional corporations, but S corporations are generally exempt unless a federal income tax is owed. Sole proprietorships, individuals, estates of decedents, and testamentary trusts are exempted and do not have to file a return.

Zuckerman Law, LLC —
Experience You Can Trust

At Zuckerman Law, LLC, I’ve handled just about every type of tax issue experienced by businesses in Florida. If your business is facing challenges from the Florida Department of Revenue or the IRS, I have the experience, knowledge, and resources you can rely on. I make personal service, prompt communication, and goal-oriented advocacy a priority. If you’re in the Fort Lauderdale region or anywhere in South Florida, contact me today to set up your own case consultation.