Florida Business Tax
As a new business owner or budding entrepreneur; there are several facets of a business that you need to understand and one of such is the Florida business tax. At the same time, it is also important to identify the federal, state, and local business tax requirements. The type of taxes varies from one state to another although sales taxes, corporate taxes, and income taxes are common amongst most states. The Florida tax rate will also be different for different types of taxes. For example, the sales tax rate could be different from the use tax or property tax rate.
What taxes do businesses pay in Florida?
One of the important obligations of any new or existing business is to file tax returns and this could be for federal or state taxes. Each state in the USA has some form of taxes and business taxes can vary from one state to another. In some states, income tax is levied and in others there are no corporate taxes. A business in Florida may be subjected to different forms of Florida income tax and corporate taxes. Some of the other taxes that are common in this state include Communications Services Tax, Reemployment Tax, Discretionary Sales Surtax, Sales and Use Tax, Insurance Taxes, Beverage Tax, Documentary Stamp Tax, Corporate Income and Emergency Excise Tax, pollutant taxes, and Gross Receipts Tax among others. The Florida business tax rate for each category of taxes will be different.
The Florida corporate tax is also known as the corporate income tax or the franchise tax. It is a privilege tax imposed on specific businesses like professional corporations or for-profit corporations, which exist in Florida. The taxes are imposed on conducting business, or generating income through sales or service. The corporate tax is computed using several aspects of taxation like federal taxable income, additions, and subtractions, and Florida adjustments to arrive at an adjusted federal income. The Florida business tax rate for franchise tax or corporate tax is currently 3.535%, which has been reduced from 5.5% in 2019.
Sales tax in Florida is also known as the “sales and use tax” and is applicable on each sale by any business and also on storage and rental in the state. The Florida tax rate for sales tax is a flat 6% although it can vary in certain cases like the following:
- Sales tax on amusement machine receipts is 4%
- Sales tax on the license or lease of commercial real property is 5.5%
- Sales tax on electricity is 6.95%
There is another component to this type of Florida income tax and it is known as “use tax”. The Use tax is applicable if a business uses or consumes taxable goods or services especially when it has not paid sales tax at the time of buying or purchase. There is also a “Discretionary Sales Surtax” or county tax that is applicable in several Florida counties. This county tax is applicable to those transactions that are subjected to sales or use tax. The Florida Department of Revenue is responsible for collecting these taxes and helps in distribution of surtax to the counties.