Paying taxes is certainly not the most enjoyable part of running a business, but it’s necessary. Florida small business taxes are an ongoing part of life for entrepreneurs in the Sunshine State and an important part of keeping a business legally compliant. Knowing which state taxes apply to your Florida business can seem overwhelming, but we’re here to help. Use this guide to help you discover what kinds of taxes might apply to your business, when and how to pay them, and which of our products and services can make things easier for you at tax time.
If you’re looking for further help with compliance, our Worry-Free Compliance Service was designed to help you stay organized so when it comes to filing taxes and other state reports, you aren’t scrambling to figure out what you need and when. If you’re looking for information about federal taxes, head over to our page on federal taxes for small businesses to learn more.
Step 1: Establish your Florida business’s corporate income tax obligations
The first thing you will need to do is figure out what you are working with. Unlike the majority of states, Florida doesn’t impose an income tax on individuals. Corporations conducting business in Florida are subject to a standard 5.5% income tax. Business entities including limited liability companies (LLCs), sole proprietorships, partnerships, and S corporations are exempt from paying Florida income tax. In many states, these businesses would be considered pass-through entities, which means that business income would pass through to owners or shareholders.
Corporate Income Taxes
As with any income tax, corporations may also have exemptions which can significantly lower a company’s tax rate. Corporations in Florida have two choices when it comes to the Florida business tax rate. You can use the federal income rate of 5.5% (temporarily reduced to 4.458% in 2021), minus exemptions and credits, or an alternative minimum Florida business tax rate of 3.3%. The state will mandate whichever is higher.
As of 2019, regardless of which method you use, the first $50,000 of income is exempt from Florida’s corporate tax. A Florida LLC may choose to be treated as a corporation for federal income tax purposes. This designation also subjects the LLC to Florida’s corporate income tax.
Income taxes are subject to change.
Business taxes in Florida are due on April 1 if the company uses the calendar year as its tax year or on the first day of the fourth month after its tax year ends. However, you have the option of filing for an extension.
Step 2: Determine your Florida business’s employment taxes
Florida employers pay a reemployment tax. Many states call this an unemployment tax.The initial Florida business tax rate for reemployment is 2.7%. After the employer has reported taxes for 10 quarters, the state does some math. The new rate is calculated by dividing the total benefits charges to the account by the taxable payroll reported for the first seven of the last nine quarters immediately preceding the quarter in which the rate becomes effective.
There is an exception for businesses that transfer ownership. The new owner may choose to accept the tax rate of the previous employer. They will also be responsible for paying any outstanding taxes.
Reemployment taxes are due every quarter by the following dates:
- April 30
- July 31
- August 31
- January 31
Step 3: Establish your Florida business’s additional state tax obligations
Depending on the industry your business serves, you may have a number of Florida small business tax obligations. Here is an overview of some other business taxes in Florida.
The general state sales tax rate in Florida is 6% on sales and purchases of applicable items, services, and transient rentals. Other rates may apply, such as:
- 5.5% on leases and licenses of commercial real property
- 6.95% on electricity
- 4% on amusement machine receipts
The amount of sales tax collected determines sales tax filing periods.
- More than $1000: Monthly
- $501-$1000: Quarterly
- $101-500: Semiannual
- $100 or less: Annual
Filing online with the Department of Revenue is strongly encouraged.
When sales tax wasn’t paid at the time of purchase, a use tax may apply. Use tax is applicable when you purchase an item with intent to sell it and end up keeping it for personal use. If you purchase a taxable item outside of Florida and bring or deliver it to Florida without paying sales tax, a use tax is owed.
Florida collects general excise taxes on the sale of motor fuel (gasoline and diesel), cigarettes (per pack), and cell phone service plans. Similar taxes may be collected for other services, depending on the industry.
Step 4: Prepare to file and pay your Florida business taxes
Pay all Florida small business taxes to the Florida Department of Revenue. The state encourages online tax filing. You will need to create an account and file on the Department of Revenue website.
One of the most difficult components of filing small business taxes in Florida is gathering all the correct information. Receipts, accounting and payroll records, legal documents, and other information may be necessary to find all the facts you need. Our ZenBusiness Money App is one way to help track your invoices and receipts conveniently all in one place, and something to consider whether you’re an established business or brand new.
Not sure how to stay compliant? Learn more about legal compliance for small business owners.
Do I need an accountant?
Most small businesses would find a lot of value in hiring a professional accountant to assist with taxes. Depending on the size and scope of your business, outsourcing might be a good option. There are different types of accountants and tax professionals to choose from. Maybe surprisingly, they don’t all have the same qualifications. The IRS has an online guide on tax preparer credentials and qualifications to help you determine the differences and what you might need for your specific business.
Penalties for failure to pay Florida business taxes
Unfortunately, your Florida small business taxes won’t magically go away if you ignore them. Failure to pay taxes on time will result in a penalty equal to 10% of the tax with a minimum penalty of $50. If the payment isn’t made in the first 30 days, you will be hit with a “failure to pay penalty,” which is another 10%. This penalty is assessed every 30 days until all or part of the balance is paid, though it can’t exceed 50%. Just in case you really drop the ball, it is important to note that failure to pay six consecutive tax returns could result in a third-degree felony charge. Depending on the amount owed, the felony charge could escalate to second- or first-degree felony. Penalties are stated under Florida Statutes 202.28 Credit for collecting tax; penalties.
How we can help
Keeping your Florida business legally compliant can feel overwhelming. Additionally, our ZenBusiness Money App can help you keep track of your clients, invoices, and payments so you’ll have your important info in one place when tax time arrives.
We know you have a lot on your plate when it comes to running your business. We’re here to help support you and your Florida business’s needs.
Disclaimer – The content on this page is for informational purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How much can a Florida small business make before paying taxes?
Florida corporations pay income tax at a specific percentage once they have made over $50,000. All other business entities don’t pay income tax. Other taxes may apply to your Florida small business.
- What percentage does a Florida small business pay in taxes?
The Florida Corporate Income Tax rate is subject to change. The Tax Foundation’s website is a resource for the latest information on current Florida business tax rates. This is an independent nonprofit organization that provides taxation statistics and resources.
- How does a Florida small business pay taxes?
Pay all Florida small business taxes to the Florida Department of Revenue. The state encourages online filing. You will need to create an account and file on the Department’s website.
- Do I have to file taxes for my small business in Florida?
All businesses will generally have some taxes to file. Income taxes may not be assessed unless you’re a corporation. You may be responsible for sales tax, reemployment tax, and others.