Sales tax in the state of Florida

Sales tax is one of the most important aspects businesses must consider when operating in the state of Florida. This tax affects both businesses selling products and services within the state and the consumers making purchases. Understanding how this tax works and how to comply with tax obligations is crucial to keeping your business in good standing and avoiding penalties.

In this blog, we will explain in detail what sales tax is in Florida, how it is applied, and what you need to do to ensure your business complies with all regulations.

What Is Sales Tax in Florida?

Sales tax in Florida is a state tax that applies to the sale, rental, or use of goods and services within the state. This tax is collected by businesses at the time of the transaction and is then remitted to the Florida Department of Revenue. Sales tax is an important source of revenue for the state and is used to fund public services such as education, infrastructure, and security.

Sales Tax Rate

In Florida, the sales tax rate is 6%. However, there are other rates that apply to specific commercial activities:

• Leases or licenses of commercial real estate: 5.5%.
• Gross receipts from certain creative works: 4%.
• Electricity: 6.95%.

In addition to this sales tax, some counties manage a surtax that is added to the initial percentage. This is paid on taxable items and services delivered to a county that imposes it.

Who Is Subject to This Tax?

Before starting your business activities in the State of Florida, it is important to be informed about the state obligations that apply to the products or services you offer. To be subject to sales tax, the following conditions must be met:

• Marketing of repair services or improvements to tangible personal property.
• Marketing of tickets to amusement parks, sports, or recreational activities.
• Retail sale of taxable products.
• Rental of properties such as commercial offices, mini-stores, houses, hotels, motels, condos, etc.
• Sale of service warranty contracts.
• Sale of vending or entertainment machines.
• Sale of products and services through digital means.
• Sale of crime prevention and investigation services, industrial fumigation services, and industrial interior cleaning/maintenance services.

If your business sells any of the items mentioned above, it must register with the Florida Department of Revenue.

Filing Deadlines and Payment Conditions

Payments must be made on the 1st and after the 20th of the month following each reporting period. If the 20th falls on a Saturday, Sunday, or a state or federal holiday, returns are considered timely if filed electronically or delivered in person on the next business day after the 20th. A return must be filed for each reporting period, even if no tax is due. When paying electronically or filing and paying electronically simultaneously, you must initiate your electronic payment and receive a confirmation number by 5:00 PM on the business day before the 20th to avoid penalties and interest.

How Does Sales Tax Affect Businesses?

Sales tax not only affects consumers but also businesses operating in Florida. Businesses are responsible for collecting sales tax on all taxable transactions and remitting it to the state. Below, we explain how this tax affects your business and what you need to do to comply with tax regulations.

Registration for Sales Tax

Before you start collecting sales tax, businesses must register with the Florida Department of Revenue. This registration will allow you to obtain a sales tax account number, which is necessary to file and remit the tax to the state. Registration is mandatory for all businesses that sell taxable goods and services in Florida.

Calculating and Collecting the Tax

Once registered, your business must start calculating and collecting sales tax on each transaction. It is important to ensure that the calculation is correct and that the tax is clearly indicated on the customer's purchase receipt. This not only ensures compliance with regulations but also helps maintain transparency with your customers.

Filing Returns and Paying the Tax

Businesses in Florida must file periodic sales tax returns with the Department of Revenue. The frequency of these returns (monthly, quarterly, or annually) depends on your business's sales volume. During the return filing, you must detail the total amount of sales tax collected and pay the corresponding amount. It is essential to file returns and make payments on time to avoid fines and penalties.

Annual Resale Certificate in Florida

Once registered with the Florida Department of Revenue, you can obtain the Annual Resale Certificate. This certificate allows you to purchase or rent property or services tax-free when the property or service is resold or rented again. This certificate expires each December 31 and is automatically renewed at the beginning of the current fiscal year.

How Can We Help You Comply with Sales Tax in Florida?

Our team of experts is here to help you understand and manage sales tax in Florida, from initial registration to filing returns and identifying applicable exemptions.

• Registration and Tax Setup: We help you register with the Florida Department of Revenue and set up the sales tax collection system in your business.
• Tax Advice: We guide you on available tax exemptions and how to take advantage of them to optimize your taxes.
• Return Management and Compliance: We handle the filing of periodic returns and ensure that you comply with all tax regulations to avoid fines and penalties.

Sales tax in Florida is a key aspect that businesses must carefully manage. From registration to return filing, complying with these tax obligations is essential to maintaining the legality and operational efficiency of your business.

If you need support with Sales Tax for your business in Florida, contact us and receive a free consultation with our experts.