If you have ever been to an amusement park in Orlando, a golf course in Palm Beach, or a club in Miami, you know that Florida has a lot to offer. With over 18 million residents and about 80 million tourists visiting each year, Florida often walks the line between spring break destination and retirement paradise.
Florida is one of the few states that does not impose a Personal Income Tax; instead it receives the bulk of its revenue from Sales and Use Tax, Corporate Tax, and Property Taxes. Much of Florida’s economy relies on population growth and tourism ― both of which are suffering in the current nationwide recession. Consequently, lawmakers are expected to cut budgets and raise taxes to compensate for revenue losses.
While a Florida resident knows how to enjoy the beaches and endure the hurricanes, there is also important tax information that one should understand. The following article will help you understand Florida’s tax system ― how it operates, how it affects taxpayers, and how to file the necessary forms.
TABLE OF CONTENTS
General Information About Florida Tax Laws
- • Sales and Use Tax
- • Corporate Tax
- • Property Tax
- • Other Taxes
Notable Changes In Policy/Legislation
Information About Filing Your Florida Taxes
Tax Tips & Helpful Facts
GENERAL INFORMATION ABOUT FLORIDA TAX LAWS
Florida’s constitution prohibits the enforcement of a Personal Income Tax. Instead, the state gets most of its revenue from the Sales and Use Tax, and cities and counties get the majority of their revenue from Property Taxes.
Sales and Use Tax (SUT)
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. View county rates at the following link:
Or, calculate sales tax using the Sales Tax Rate Table:
The Florida SUT is paid by consumers to the sellers and applies to retail sales, admission charges, storage, rentals, and some services. For a full list of applicable items, see this webpage:
The Use Tax is imposed on out-of-state sales 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. 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. To file an Out-of-State Purchase Return (Form DR-15MO), visit the following website:
County and city governments, as well as nonprofit organizations, are exempt from sales tax on certain purchases. If you are opening a business that is required to collect sales tax, you can register online with the Florida Department of Revenue:
To find out if your business is required to register for the SUT, call the Florida Department of Revenue (1-800-352-3671) or submit your questions electronically:
One of the reasons Florida is losing revenue, aside from the national economic recession, is the surge in Internet sales. Many consumers do not pay the Use Tax for out-of-state online purchases and this is difficult to regulate. Extended debates on possible legislative action and the slow nature of such changes will make it a continuous challenge for the government to collect tax on these transactions.
Corporate Tax (CT)
Florida’s CT 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.
CT payments can be submitted electronically, using program transmitters approved by the IRS. Form F-1120 is the Florida Corporate Income/Franchise and Emergency Excise Tax Return. It can be found at the Florida Department of Revenue website:
If a corporation owes over $2,500 in annual Florida corporate tax, it must make estimated tax payments using Form F-1120ES (Declaration/Installment of Florida Estimated Income/Franchise and Emergency Excise Tax):
If a corporation owes less than $2,500 in taxes, it may file Form F-1120A, as long as it meets certain criteria. For this, a corporation must enroll online with the Florida Department of Revenue or have the form mailed using the Department’s ordering system:
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.
In general, the Florida CT is due by the 1st day of the fourth month following the end of the tax year or the 15th day following the due date for the related federal return, whichever is later. To apply for an extension, Form F-7004 (a Florida Tentative Income/Franchise and Emergency Tax Return and Application for Extension of Time to File Return) must be filed by the original due date for the Florida return.
- Form F-7004, dor.myflorida.com/dor/forms/2009/f7004.pdf
If an extension is granted, a corporation must still pay the taxes it owes by the original due date.
Out-of-state corporations that conduct business in Florida must register to collect/pay Florida taxes. This can be done at the following website:
To read the official Tax Information Publication (TIP) of Florida’s Corporate Income Tax Mandate, see the following link:
Florida is known as a business-friendly state ― it encourages new businesses and offers a supportive environment for existing industries. In fact, Florida ranks #5 on the State Business Tax Climate Index by the Tax Foundation. The state also boasts a public-private partnership called Enterprise Florida Inc. that is committed to statewide economic development.
I need to know the adress of the I.R.S. office here in the Orlando area, please.
Hi Laura,
Here is a link to the list of IRS offices in Florida. The hours are generally Monday-Friday, 8:30am-4:30pm. Hopefully you can find an office that is close to you.
http://www.irs.gov/localcontacts/article/0,,id=98268,00.html
Thanks for your inquiry.
would there be a federal tax or estate tax on the amount of $6300.00 found from a locator’s service in florida of unclaimed money that existed outside of a will? if so, what is the percentage that would be owed according to florida irs. thank you
I NEED TO KNOW THE ADDRESS OF THE IRS OFFICE IN DAYTONA BEACH AND A PHONE NUMBER TO CONTACT SOME ONE TO CHANGE MY ADRESS WHERE MY W 2 FORMS WILL BE SENT PLEASE!!!
Dear Sherry,
The address of your local IRS office is:
921 N. Nova Rd.
Holly Hill, FL 32117
The phone number is: (386) 258-4105
And the hours of operation are:
Monday-Friday - 8:30 a.m.-4:30 p.m.
(Closed for lunch 12:00 Noon - 1:00pm)