This article is not intended to provide tax, legal, or investment advice. This material has been prepared for informational purposes only, and should not be relied upon for tax, legal, or investment purposes. These topics are complex and constantly changing. The information presented here may be incomplete or out of date. Be sure to consult a relevant professional.
The Florida tax system is fairly simple and attractive. The absence of a state income tax makes it inviting to many residents, and the available credits and exemptions can help reduce the sum of payments.
Despite the favorable business environment, there are still nuances to know. Let’s see what taxes are mandatory in Florida and who has to pay them. Get started now.
Income tax rate in Florida
Income tax in the USA is a complex system of federal, state, and local fees that is based on an individual’s earnings. Florida is one of the most appealing places in the USA for retirees and business owners because it has no state income taxes. This means that wages, salaries, and other forms of income earned by individuals, businesses, and corporations in Florida are not subject to state income tax. This is a significant benefit for anyone who lives or runs a business in the sunshine.
You don’t need to file and send income forms. So it is the right place if you want to save some money on taxes.
Sales tax rates in Florida
Sales tax in Florida is the amount of money charged by the state to buyers of goods and services. It is collected by businesses and organizations that make retail sales of taxable items in Florida.
According to the current system, sales tax in Florida consists of two parts: a federal share of 6% and an additional local county share of up to 1.5%. As a result, the maximum sales tax rate can be 7,5%, depending on your location. Study the table below to check the total rates in different counties.
|County||County rate||Total rate|
|Indian River County||1%||7.00%|
|Palm Beach County||1%||7.00%|
|Santa Rosa County||1.5.%||7.50%|
|St Johns County||1.5%||7.50%|
|St Lucie County||1%||7.00%|
Certain goods are exempt from the sales tax in Florida. These include unprepared food, prescription medicine, medical supplies, residential rent, and certain services. Businesses must obtain a license from the Florida Department of Revenue. Then they become responsible for collecting the tax from customers, remitting payments to the state, and filing returns. Businesses must also provide customers with proof of payment.
Property tax in Florida
Florida is known for its beautiful beaches, stunning weather, and low property taxes. Property fees in Florida are quite different from the taxes levied in other states. The fee is based on the estimated market value of the real estate. Each county has an assessed value. Then, this value is multiplied by the local millage rate to determine the annual payment.
The millage rate varies from county to county and can be as low as 0.25% or as high as 1.5%. For example, in Dixie county, there is the state’s lowest property tax rate of 0,64%, so you should pay an average sum of $543.00 per year. The fee is collected by the Florida local county government.
Gas tax in Florida
In 2023, the state Florida decided to increase the gas tax to help fund road projects and infrastructure improvements. The new gas fee will be applied to all motor fuel purchases, including gasoline, diesel, and alternative fuels. This tax is intended to generate revenue to pay for roadway construction, maintenance, and repairs.
|Type of gas||State rate in all counties|
|Motor fuel (gasoline, gasohol)||0.35|
Local rates vary by county. Overall, the gasoline taxes in Florida are among the highest in the nation. While the fees may be high, they are necessary to fund important programs and projects that benefit all Floridians.
Estate tax rate in Florida
Zero estate tax in Florida is an important benefit for those who own real estate. If you’re planning to bequeath your villa in Palm Bay or Miami to your inheritors, you can be rest assured: Florida is one of those places where you are free of inheritance and state estate taxes. It means that no taxes are due on the value of the deceased’s estate when it passes to the heirs. The heirs can keep more of the estate and not have to pay taxes on its value. But don’t forget about bureaucratic procedures.
Tax on alcohol in Florida
The purpose of such a tax is to reduce the consumption of alcohol, promote a healthy life and increase the Florida government’s income. The sum varies depending on the type of beverage sold. Typically, all beverages are divided into three categories and are taxed at different rates.
|Type of drink||Tax rateper gallon|
The tax is imposed on both the manufacturer and distributor of alcoholic beverages and is collected by the state Department of Revenue.
Cigarette tax rate in Florida
These fees are popular with governments because they are easy to collect and they can generate a significant income. However, they have also been criticized for being regressive, meaning that they disproportionately burden low-income smokers. Florida’s cigarette tax rate is $1.334 per pack.
Are there any tax credits in Florida?
As in other states, Florida’s authority provides several ways to save money and get business tax credits. It is a great opportunity to promote business development and job creation within the state.
The energy efficiency tax credit is one of the most popular in Florida. This credit allows businesses to deduct up to 50% of the cost of certain energy-efficient upgrades from their taxes. This includes installing energy-efficient appliances, air conditioning systems, and windows in Florida.
Another option is to get tax credits for low-income households. These credits can help reduce the sum of mandatory payments and can even result in a refund. To be eligible, households must have an income below certain levels.
Also, it is possible to have a sales tax holiday in Florida. Shoppers can purchase certain items without paying sales tax. This includes clothing, school supplies, computers, and more. Such an opportunity is typically held during the summer and can save shoppers a lot of money.
Risks and penalties for not paying taxes in Florida
Despite the attractive conditions, paying taxes is an integral part of life in Florida. Failing to do so carries serious risks and penalties.
If the state of Florida suspects an individual or business of tax evasion, authorities may investigate and prosecute the case and sue. The court may also order the offender to pay back the money, plus interest and any applicable penalties.
In addition to criminal penalties, the Florida Department of Revenue can impose civil penalties. This includes a penalty of 10 percent of the unpaid sum plus interest. The Department may also pursue collection action, including wage and income garnishment, real estate and bank accounts.
Get the help of professionals in Florida
If you’re afraid of getting lost in Florida taxes and accounting, delegate this task to professionals. Regardless of income, businesses can benefit from specialized knowledge and expertise in a wide range of tax-related matters. You can be sure that your reports are filed in a timely and accurate manner.
Accounting companies and CPAs provide comprehensive tax services, including filing returns, determining rates and brackets, preparing and processing sales, income or other taxes, and guidance. They help Florida businesses to save time and money by ensuring that reports are completed efficiently and in compliance with legislation. With the help of such experts, you can quickly identify areas where you may be overpaying or develop strategies to minimize liabilities and get tax credits if needed.
BooksTime can match you with a certified tax professional to process your tax returns and provide you with tax advice, while our accountants will ensure that the required financial statements and reports are submitted to your tax advisor in a timely manner.
Author: Charles Lutwidge