Florida Taxes — A Quick Look
Major taxes collected in Florida include sales
and use tax, intangible tax and corporate income taxes. Information
regarding these and additional taxes can be located from the list below. There
is no personal income tax in Florida.
- Florida Sales Tax:
Florida sales tax rate is 6%.
- Florida State Tax:
Florida does not have a state income tax.
- Florida Corporate
Income Tax: Corporations that do business and earn income in Florida must
file a corporate income tax return (unless they are exempt).
- Florida Property Tax:
Florida Property Tax is based on market value as of January 1st that year.
Taxes in Florida Explained
For decades, Florida has had one of the lowest tax burdens in the country,
according to the independent research organization Tax Foundation. For 2013,
Florida will place the fifth-lowest tax burden on its residents and businesses.
But not all taxes are created equal, and the state collects in a variety of ways
that residents need to be aware of.
The strength of Floridas low tax burden comes from its lack of an income tax,
making them one of seven such states in the U.S. The state constitution
prohibits such a tax, though Floridians still have to pay federal income taxes.
Florida also does not assess an estate tax, or an inheritance tax. No portion of
what is willed to an individual goes to the state.
Floridians no longer need to pay taxes to the state on intangible goods, such as
investments. The law requiring that tax was repealed in 2007.
The state charges a 6% tax rate on the sale or rental of goods, with some
exceptions such as groceries and medicine. Additionally, counties are able to
levy local taxes on top of the state amount, and most do 55 of the 67 Florida
counties added local sales tax to the state tax in 2012. The highest amount
added to the sales tax was 1.5% by 7 counties in 2012, bringing the total sales
tax to 7.5% in those counties; that will increase to 8 counties in 2013. For a
complete list of the additional sales tax rates by county, visit the Florida
Department of Revenue:http://dor.myflorida.com/Pages/forms_index.aspx
State sales tax needs to be paid for internet or other out-of-state purchases,
even if no tax was charged at the time of purchase, or were charged at a rate
less than the Florida sales and use tax rate. While this includes taxable items
bought in Florida, it mostly applies to items bough outside of the state which
were brought in or delivered. Florida residents are required to report these
sales and pay the use tax on them personally.
Though the state government does not collect any property taxes, local
governments receive much of their funding through these taxes. These rates are
assessed at the local level and can vary by county, and they are based on the
value of the property. Property taxes in Florida are some of the highest in the
country, although there are several exemptions to try to lighten the load on
Property Tax Exemptions
Homestead Exemptions are
available on primary residences in Florida. These exemptions can be available up
to $50,000. However, only the first $25,000 of this exemption applies to all
taxes. The remaining $25,000 only applies to non-school taxes.
Widow(er) Exemptions of
$500 are available to widows and widowers who have not remarried. If you were
divorced at the time of your ex-spouses death, you do not qualify for this
Exemptions are available in http://dor.myflorida.com/dor/property/forms/current/dr501sc.pdfcertain
counties and cities only. They are valued up to $50,000 for residents 65 years
old and older who have gross income below $20,000 in 2001 dollars, adjusted for
inflation. This exemption is in addition to the Homestead Exemption.
Exemptions of $500 are
available to Floridians who are legally blind.
Total and Permanent
Disability Exemptions are
available for homeowners who have a total and permanent disability.
Quadriplegics who use their property as a homestead are exempt from all property
taxes. Others who must use a wheelchair for mobility or are legally blind and
have a gross income below $14,500 in 1991 dollars, adjusted for inflation, can
be exempt from all property taxes as well.
Veterans Exemptions exist
in a number of different forms.
- A veteran documented as
disabled by 10% or more in war or service-connected events can earn an
additional exemption of $5,000 on any owned property.
- An honorably discharged
veteran who is totally and permanently disabled or requires a wheelchair for
mobility due to their service can be exempt from all property taxes. In some
circumstances, this benefit can be transferred to a surviving spouse.
- An honorably discharged
and disabled veteran who is 65 or older who was a Florida resident when they
entered military service may be eligible for an additional exemption. The
disability must be permanent and must have been acquired as a result of the
military service. The property tax will be discounted based on the percent
of the disability.
- Members of the military
deployed during the last calendar year can receive exemptions based on the
percent of time during the year they were deployed.
Florida collects taxes on many other goods and services residents pay for.
Documentary Stamp Taxes are assessed on documents that transfer interest in
Florida real property, such as warranty deeds and quit claim deeds. Additional
taxes are charged for fuels, tobacco products, communications services, and more.
For a full of account of taxes charged in Florida, see the Florida
Department of Revenue website.
Corporate Income Tax
While individuals do not have to pay income taxes, the same is not true for all
types of businesses in Florida. Corporations and artificial entities that
conduct business, or earn or receive income in Florida, including out-of-state
corporations, must file a Florida corporate income tax return unless exempt.
They must file a return even if no tax is due. Sole proprietorships, individuals,
estates of decedents, and testamentary trusts are exempted and do not have to
file a return. S Corporations are usually exempt as well, unless federal income
tax is owed. The Florida Corporate Income Tax rate is 5.5%.
Reemployment Tax (formerly Unemployment Tax)
Eligible businesses must also pay the Reemployment Tax. Formerly called the
Unemployment Tax before being renamed in 2012, this tax is used to give partial,
temporary income to workers who lose their jobs through no fault of their own,
and who are able and available to work.