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 7%. - 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.
Income Tax
One of the key reasons for Florida’s low tax burden is its absence of a state income tax, which puts it among the seven states in the U.S. without one. While the state constitution prohibits the imposition of an income tax, residents of Florida are still required to pay federal income taxes.
Estate Tax
In addition to not having a state income tax, Florida also does not levy estate or inheritance taxes. This means that individuals who receive inheritance or bequests in Florida do not have to give any portion of it to the state.
Intangibles Tax
Since the repeal of the law in 2007, Floridians are no longer obligated to pay state taxes on intangible assets, including investments.
Sales Tax
The state charges a 7.02% 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
Use Tax
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.
Property Tax
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
some Floridians.
Property Tax Exemptions
Homestead Exemptions are $50,000 annual deduction from the property appraiser’s Assessed Value in yielding the Taxable Value for the taxpayer’s principal residence, which must be in Florida. 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. The Florida Legislature increased this exemption from $500 to $5,000 effective January 1, 2023. This ex emption removes $5,000 from the taxable value of the home and can reduce the annual property tax bill by approximately $100.00 depending on the location of the property.
Senior Citizen Exemptions. It is made available by the Florida Department of Revenue annually and subject to change each year. The adjusted income limitation for the 2023 exemptions is $35,167. (prior year income) Proof of age and proof of all income to the household is required.
Blind Person Exemptions. A Florida homeowner as of January 1, who is certified as legally blind, can qualify for a $5,000 (Effective January 1, 2023) Blind Person’s Exemption on the assessed value of the property
Total and Permanent Disability Exemptions. Every Florida resident who has been certified by one (1) Florida licensed physician as being totally and permanently disabled as of January 1, but not requiring the use of a wheelchair for mobility, can qualify for a $5,000 (Effective January 1, 2023) Disability Exemption on the assessed value of the property.
Veterans Exemptions . Florida offers various property tax exemptions for veterans and active-duty military members. Here are some of the benefits:
A veteran with a service-connected disability of 10% or more can claim an additional exemption of $5,000 on any property they own.
An honorably discharged veteran who is permanently and totally disabled or requires a wheelchair due to their military service may qualify for a total exemption from property taxes. This benefit can sometimes be transferred to a surviving spouse.
A disabled veteran who is 65 years of age or older and was a Florida resident when they entered military service may be eligible for an additional exemption based on the percentage of their disability, as long as the disability was acquired due to their military service.
Members of the military who were deployed during the previous calendar year can receive property tax exemptions based on the percentage of time they were deployed.
Other Taxes
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.
