Florida State Tax Overview (2024)

Quick Reference

Income Tax

No state income tax - Florida does not impose an individual income tax.

Sales and Use Tax

State Rate: 6.00%

Discretionary Sales Surtax (County): Up to 2.00% (varies by county)

Total Combined Rate: 6.00% to 8.50% depending on location

Major County Rates (Total State + County): - Miami-Dade: 7.00% - Broward: 7.00% - Palm Beach: 7.00% - Hillsborough (Tampa): 8.50% - Orange (Orlando): 6.50% - Duval (Jacksonville): 7.50% - Pinellas: 7.00% - Lee (Fort Myers): 7.00% - Polk: 7.50%

Documentary Stamp Tax (Real Estate)

Deeds and Other Documents Transferring Real Property: - $0.70 per $100 of consideration (or value) - Example: $300,000 property = $2,100 documentary stamp tax

Miami-Dade County: Additional $0.60 per $100 (total $1.30 per $100)

Promissory Notes and Other Written Obligations: - $0.35 per $100 of indebtedness (mortgages, notes) - Applies when securing property in Florida

Intangible Personal Property Tax

Status: Repealed effective January 1, 2007

Previously applied to stocks, bonds, and other intangible assets - no longer in effect.

Corporate Income Tax

Rate: 5.50% on federal taxable income (with adjustments)

Exemption: First $50,000 of income exempt

Not applicable to individuals but relevant for business owners.

Reemployment Tax (Unemployment)

New Employer Rate: 2.70% for construction industry, varies for other industries

Wage Base: First $7,000 of wages per employee (2024)

Rate Range: 0.10% to 5.40% based on experience rating

Details

No Income Tax Advantage

Florida is one of nine states with no individual income tax (along with Alaska, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming, and New Hampshire which only taxes interest/dividends).

Benefits for Florida Residents: - No state tax on wages, salaries, or self-employment income - No state tax on capital gains, dividends, or interest - No state tax on retirement income (pensions, Social Security, IRA/401(k) distributions) - Significant tax savings for retirees and high-income individuals relocating from high-tax states

Revenue Replacement: - Florida relies heavily on sales tax, property tax, and tourism-related taxes - Documentary stamp taxes on real estate transactions - Corporate income tax - Various fees and licenses

Establishing Florida Residency

Important for individuals moving to Florida to establish domicile to avoid other state income tax.

Steps to Establish Florida Domicile: - Obtain Florida driver's license - Register vehicles in Florida - Register to vote in Florida - File Declaration of Domicile with county clerk (not required but helpful) - Establish homestead exemption for property tax savings - Update will and estate planning documents to reflect Florida domicile - Maintain primary residence in Florida (spend more than 6 months/year if possible) - Update address with banks, investment accounts, IRS, Social Security - File final state tax return in former state (if applicable)

Former State Audit Risk: - High-tax states (NY, CA, NJ) often audit former residents claiming Florida domicile - Maintain detailed records: hotel receipts, credit card statements, phone records, etc. - Avoid maintaining former state driver's license or voter registration - Document days spent in each state

Sales Tax - Exemptions and Special Rules

Exempt Items: - Groceries (unprepared food items) - Prescription drugs - Medical services - Educational services - Most professional services - Newspapers and magazines (annual subscriptions) - Agricultural items (seeds, fertilizer, livestock, etc.)

Taxable Items: - Prepared food (restaurants, catering) - Most tangible personal property - Rental of real property (commercial, see below) - Admissions to events - Transient rentals (hotels, short-term vacation rentals - see below)

Commercial Rent Tax: - 5.5% tax on rental of commercial real property (in addition to regular rent) - Applied to base rent, not property taxes or CAM charges - Some counties add discretionary surtax

Transient Rentals (Hotels, Vacation Rentals): - Subject to 6% state sales tax - Plus local tourist development taxes (varies by county, typically 4% to 6%) - Total tax on short-term rentals often 10% to 12%

Documentary Stamp Tax - Additional Details

Applied to transfers of real property and certain debt instruments.

Real Property Transfers: - Tax based on consideration (purchase price or fair market value if no consideration) - Paid at closing, typically by seller (but negotiable) - Exemptions: gifts, transfers to/from spouse, certain governmental transfers

Miami-Dade County Surtax: - Only county with additional documentary stamp tax on deeds - Total $1.30 per $100 ($0.70 state + $0.60 county)

Mortgages and Notes: - $0.35 per $100 on new mortgages - Refinancing: only taxed on increase in principal (not entire new loan) - Modifications generally not taxable

Homestead Exemption (Property Tax)

While property tax is not income tax, homestead exemption is significant benefit for Florida residents.

Homestead Exemption: - First $25,000 of assessed value exempt from all property taxes - Second $25,000 exempt from non-school taxes (applies to value between $50,000 and $75,000) - Total exemption up to $50,000 for qualifying homestead

Save Our Homes (SOH) Cap: - Assessed value increases limited to 3% per year or CPI, whichever is less - Significant savings over time as market values increase - Portability: can transfer SOH benefit to new homestead in Florida (up to $500,000)

Requirements: - Must be permanent residence as of January 1 - Must be owned and occupied by applicant - Must file application with county property appraiser by March 1

Business Taxes

Corporate Income Tax: - 5.50% on federal taxable income with Florida adjustments - First $50,000 exempt - S corporations generally not subject (income passes through to shareholders) - LLCs taxed as corporations subject to tax

Franchise Tax: - Repealed effective 2007

Unemployment Tax: - New employers: varies by industry (2.70% for construction) - Wage base: $7,000 per employee - Experienced employers: 0.10% to 5.40% based on experience rating

Workers' Compensation: - Required for most employers - Rates vary significantly by industry and claims history

Trust and Estate Taxation

No Florida Estate Tax: Florida estate tax repealed effective January 1, 2005

Federal Estate Tax Still Applies: - Federal exemption: $13,610,000 per individual (2024) - Portability between spouses allows up to $27,220,000 combined exemption - Florida residency does not avoid federal estate tax

No State Inheritance Tax

Intangible Personal Property Tax: Repealed 2007 (previously applied to trusts holding intangibles)

Snowbirds and Part-Year Residents

Snowbirds (Part-Year Residents): - No Florida income tax regardless of time spent in Florida - May still owe income tax to domicile state (if not Florida) - May owe income tax to other states based on statutory residency rules

Common Scenarios: - NY statutory resident: 183+ days in NY or maintaining permanent place of abode in NY - CA resident: intent to return determines residency, not just days - NJ resident: domicile determination based on facts and circumstances

Tax Planning: - Establish Florida domicile before spending significant time in Florida - Track days in each state meticulously - Consider timing of income recognition (bonuses, stock sales) after establishing Florida residency

Pass-Through Entity Tax (PTET)

Federal SALT Cap Workaround: - Some states enacted PTET to allow partnerships and S corporations to pay entity-level tax - Owners deduct state tax at entity level (not subject to $10,000 SALT cap) - Florida has not enacted PTET (no state income tax to deduct)

Florida business owners in multi-state entities may still benefit from other states' PTET elections.

Citations

Florida Statutes: - Chapter 212 - Tax on Sales, Use, and Other Transactions (sales tax) - Chapter 201 - Excise Tax on Documents (documentary stamp tax) - Florida Stat. § 220.001 et seq. - Corporate Income Tax Code - Florida Stat. § 443.001 et seq. - Reemployment Assistance Program Law (unemployment) - Article VII, Section 4, Florida Constitution - Homestead exemption - Article VII, Section 5, Florida Constitution - Limitations on assessments (Save Our Homes)

Florida Department of Revenue: - Florida Department of Revenue - Sales and Use Tax - Florida Department of Revenue - Documentary Stamp Tax - Florida Department of Revenue - Corporate Income Tax - Florida Department of Revenue - Tax Information Publications (TIPs)

Administrative Rules: - Florida Administrative Code Chapter 12A-1 (Sales and Use Tax) - Florida Administrative Code Chapter 12B-4 (Documentary Stamp Tax)

Forms: - DR-1 - Condensed Instructions for Documentary Stamp Tax - DR-219 - Real Property Transfer Tax - DR-228 - Florida Business Tax Application - Form F-1120 - Florida Corporate Income/Franchise Tax Return (for corporations)