Sales tax in the state of Florida

Florida is the State with the highest demand due to its various commercial and tax benefits when starting and expanding our businesses. So, what is the Sales Tax in the United States?

Sales Tax, or Value Added Tax (VAT) in other countries, is an American state tax where sales of certain goods, services, and leases are taxed. Each state is independent in relation to the legislation and collection of these taxes, for example: Alaska, Delaware, Montana, New Hampshire and Oregon currently do not have Sales Tax.

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

- Commercial real estate leases or licenses: 5.5%.

- Receipts related to creative merchandise: 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’s important that you get information about the state obligations that are subject to the products or services you offer. To be subject to Sales Tax you must meet these conditions:

1. Commercialize Service of Repairs or improvements of Movable Properties. 

2. Marketing of tickets to amusement parks, sports or recreation. 

3. Sale of taxable products at retail.

4. Real estate rentals such as commercial offices, mini-stores, houses, hotels, motels, condominiums, among others.

5. Sale of service guarantee contracts .

6. Sale of vending or entertainment machines.

7. Sale of products and services by digital means.

8. Sale of crime investigation and protection services, industrial fumigation service and industrial interior cleaning/maintenance service.

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

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Who should pay this tax?

Your company may be subject to this tax and you must periodically submit (monthly or quarterly depending on what the State assigns) sales reports. However, not all the sales exposed in the previous point must pay the Tax. There are 3 conditions for your products or services to be registered for the payment of the 6% tax rate:

a) You must make the sales within the State of Florida. In other words, if the client is located outside the State and therefore the merchandise is delivered where the client resides, the sale will be subject to, but exempt from, the payment of federal tax.

b) If you sell wholesale products and your client is a Reseller of these, your sale will be subject to filing State tax but exempt from payment. For this type of case, it is important that you ask your clients and suppliers for the Reseller Certificate so that you can make the exemption effective .

Filing dates and payment terms:

Payments are due on the 1st and after the 20th of the month following each reporting period. If the 20th falls on a Saturday, Sunday, or state or federal holiday, returns are timely if they are filed electronically or delivered in person on the first business day following the 20th.

A return must be filed for each reporting period, even if no tax is due.

When you only pay electronically or file and pay electronically at the same time , you must initiate your electronic payment and receive a confirmation number no later than 5:00 pm on the business day prior to the 20th to avoid penalties and interest.

Annual resale certificate in Florida?

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