Florida is well known for its tax-friendly policies, attracting residents and businesses from across the country. One of the biggest advantages of living in Florida is the absence of a state income tax. However, this does not mean that Florida is entirely tax-free. Residents and businesses still have various tax obligations. Below is a comprehensive guide to taxes in Florida that people must pay.
1. Sales Tax
When it comes to taxes in Florida, the state imposes a sales tax of 6% on most goods and services. However, counties have the authority to levy additional discretionary sales surtaxes, which can add up to 2.5%, making the total sales tax rate vary between 6% and 8.5% depending on the location.
2. Property Tax
Unlike some states, taxes in Florida do not include a state property tax. However, county and local governments assess property taxes based on the value of real estate. The average property tax rate typically ranges from 0.8% to 1.5% of the property’s assessed value. Florida offers a homestead exemption of up to $50,000 for primary residences, which helps lower property tax burdens for homeowners.
3. Corporate Taxes
Businesses operating in Florida may be subject to corporate income tax, which is currently set at 5.5%. However, LLCs, sole proprietorships, and S-corporations generally do not pay this tax at the state level but are still required to comply with federal tax obligations.
4. Tourist & Hospitality Taxes
Florida’s tourism-driven economy means that hospitality businesses are subject to additional taxes in Florida, including:
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Hotel & Short-Term Rental Tax: A 6% tax, plus additional local taxes that vary by county.
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Tourist Development Tax: Up to 6% on rentals of accommodations such as hotels, Airbnb, and vacation properties in certain counties.
5. Gas & Fuel Tax
Another component of taxes in Florida is the state fuel tax of 26.5 cents per gallon, in addition to federal fuel taxes. The total cost varies based on additional local fuel surcharges.
6. Documentary Stamp Tax
When real estate transactions take place in Florida, buyers and sellers may be subject to a documentary stamp tax of $0.70 per $100 of the sales price. This also applies to mortgage documents and other financial instruments.
7. Communications Services Tax (CST)
This tax applies to services like phone, cable, satellite TV, and streaming services. The state tax rate is 4.92%, and local governments may impose additional taxes.
Final Thoughts
While Florida is a tax-friendly state with no personal income tax, it still generates revenue through various taxes in Florida, including sales tax, property tax, and business-related taxes. Understanding these obligations is crucial for both residents and business owners to remain compliant and optimize their tax strategies.
If you need professional assistance with tax planning or filing, our team at Naples Taxes is here to help. Contact us today for expert guidance on navigating taxes in Florida!