Florida State Income Tax: How It Works, Who Pays
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Florida is known as one of the lowest-taxed states in the country in part because there is no state income tax. The state government largely funds its operations through fees, sales taxes and revenue from the federal government revenue from the federal government.
While Florida does not tax personal income, it’s important to note that the state does place a levy on corporate profits. So if you own a company doing business in Florida, you may owe money to the state government.
Local governments in Florida also depend on property taxes for revenue. So even though there is no statewide property tax, you’ll want to consider these municipal costs when calculating the tax burden you’ll face in Florida.
Here are answers to some common tax questions about Florida.
Does Florida have a state income tax?
There is no Florida state income tax for personal income. The Sunshine State is one of a handful of jurisdictions in the U.S. that does not depend on income taxes for its state government revenue.
» MORE: Take a closer look at the other income-tax-free states
Will Florida tax my investment gains?
No. Florida does not impose a state-level tax on capital gains, however, you may be liable for capital gains taxes on investment gains on the federal level.
Florida corporate income tax
Florida levies a 5.5% tax on the income of any corporation doing business in the state. Even if your business is not located in Florida, you may have to pay corporate taxes to the state for "conducting business, deriving income, or existing within Florida."
If only part of your business is generated in Florida, you can calculate a share of your income that is subject to Florida taxes by using a formula that takes into account how much of your sales, property and payroll are located in the state.
Once you have your Florida corporate income, you can subtract a $50,000 exemption to arrive at your taxable total.
What’s the Florida state sales tax?
The Florida sales tax is 6% for most products, and the proceeds make it the single largest source of tax revenue for the state government.
There are a few situations in which you could pay more or less than 6% in Florida sales taxes, however. It all depends on where you are and what you’re purchasing.
If you’re buying a new mobile home from a retailer, you’ll pay only 3% in state sales taxes.
Using “amusement machines,” such as arcade games and pool tables, incurs a tax of 4%.
Payments for commercial real estate leases are taxed at 4.5%.
Electricity is taxed at 6.95%.
» Dive deeper: Learn more about Florida sales tax
Local sales taxes in Florida
In addition to the state sales tax, some municipalities have their own sales taxes that can reach up to 1.5%. That means that in some cases you’ll pay as much as 7.5% in Florida sales taxes.
Does Florida have property tax?
Florida does not have a state property tax, though the state government often helps local officials administer their own property taxes.
While Florida property tax rates vary by county, taxpayers in the state tend to pay more than people in many other parts of the country. Floridians shell out an average of $1,541 per capita in property taxes, according to an analysis by the Tax Foundation. That places the state 29th in the U.S. for that metric.
» MORE: How property tax deductions work.
When are Florida taxes due?
Florida does not have a state income tax. The deadline for filing a 2023 federal tax return was April 15, 2024, or Oct. 15, 2024, with an extension.
Is Florida a low-tax state?
That middle-of-the-road ranking on property taxes stands in contrast to the Tax Foundation’s overall ranking of Florida among the lower-taxed states. The average state and local tax burden in Florida is 8.8%, the foundation has calculated, ranking it 8th in the U.S.
