Florida LLC Tax Guide — What You'll Owe

Understanding your tax obligations is critical after forming your LLC in Florida. The headline is simple — Florida has no personal state income tax — but the full picture involves sales tax, tangible personal property tax, and federal obligations that every LLC owner must handle. This guide maps out each tax your Florida LLC may face. For post-formation compliance beyond taxes, see our after-formation guide.

Florida Tax Landscape for LLCs

Florida has no personal state income tax. This is the primary tax advantage of operating an LLC in Florida. Under Florida's constitution (Article VII, Section 5), the state is prohibited from levying a tax on the income of natural persons. Since LLCs default to pass-through taxation (income passes through to members' personal returns), most Florida LLCs owe zero state-level income tax.

However, "no income tax" does not mean "no taxes." Florida imposes other obligations that catch many new LLC owners off guard — particularly the tangible personal property tax and the sales tax collection requirements.

Note: Tax law is complex and individual circumstances vary. This guide provides general information about Florida LLC taxation. Consult a CPA or tax attorney for advice specific to your situation.

State-Level Taxes

No Personal State Income Tax

Florida is one of seven states (along with Alaska, Nevada, New Hampshire, South Dakota, Tennessee, Washington, and Wyoming) with no personal income tax. For LLC members, this means:

• Single-member LLC (disregarded entity): Zero state income tax. Report income on federal Schedule C only.
• Multi-member LLC (partnership): Zero state income tax. File federal Form 1065; members report their K-1 income on federal returns only.
• S-corp election LLC: Zero state income tax. File federal Form 1120-S; members report income from K-1 on federal returns only.

The savings compared to high-tax states are substantial. A California LLC member earning $200,000 in pass-through income owes roughly $18,000-$20,000 in California state income tax. The same income through a Florida LLC: $0 state tax.

Florida Corporate Income Tax

If — and only if — your LLC elects to be taxed as a C-corporation (by filing IRS Form 8832), it becomes subject to the Florida corporate income tax under Chapter 220 of the Florida Statutes.

• Rate: 5.5% of net income
• Exemption: First $50,000 of net income is exempt
• Filing: Florida Form F-1120, due on the 1st day of the 5th month following the close of the tax year (May 1 for calendar-year filers)
• Estimated payments: Required quarterly if tax liability exceeds $2,500

Most LLCs do not elect C-corp taxation and therefore owe no Florida corporate income tax. This tax only applies to the small subset of LLCs that affirmatively choose corporate taxation. See our tax elections page for when this election might make sense.

Important: Florida eliminated its corporate franchise tax effective January 1, 2021. You may see references to it in older guides — it no longer exists.

Sales and Use Tax

If your LLC sells tangible personal property, certain services, or commercial rentals in Florida, you must collect and remit sales tax.

• State rate: 6%
• County discretionary surtax: 0.5% to 2.5% (varies by county)
• Total rate varies by location: For example, Miami-Dade is 7% (6% + 1%), Hillsborough is 7.5% (6% + 1.5%), Alachua is 7.5% (6% + 1.5%)
• Registration: Apply for a DR-1 with the Florida Department of Revenue (no fee)
• Filing frequency: Monthly, quarterly, or semi-annually depending on your volume

Common taxable items: retail goods, prepared food, commercial rent (taxed at 2% state + applicable surtax as of 2024), admissions, transient rentals (short-term lodging), and certain services.

Common exemptions: groceries (unprepared food), prescription medicine, most professional services (legal, accounting, medical).

Florida-specific quirk: Commercial rent is taxable in Florida — one of very few states that impose sales tax on business-to-business lease payments. The rate was reduced from 5.5% to 4.5% to 2% over recent years, but it still catches many new business owners off guard. Budget for this if you are leasing commercial space.

Tangible Personal Property Tax

Florida counties levy an annual ad valorem tax on tangible personal property used in your business — equipment, furniture, computers, tools, machinery, fixtures, and similar assets.

• Exemption: First $25,000 in assessed value is exempt (file for this exemption annually)
• Filing: DR-405 return with your county property appraiser, due April 1
• Rate: Varies by county (typically 1.5%-2.5% of assessed value)
• Who owes: Any Florida LLC that owns tangible business assets

If your total tangible personal property is worth less than $25,000, you still must file the DR-405 to claim the exemption. If you fail to file, the county can estimate your assets' value and bill you accordingly.

Federal Taxes

Federal Tax Obligations

Regardless of Florida state taxes, your LLC has federal obligations based on its classification:

• Single-member LLC: Reported on Schedule C (Form 1040) — taxed as a disregarded entity. Self-employment tax (15.3%) applies to net income.
• Multi-member LLC: Files Form 1065 (partnership return) — each member gets a Schedule K-1. Self-employment tax applies to each member's distributive share.
• S-corp election: Files Form 1120-S — can reduce self-employment tax by splitting income between salary (subject to employment tax) and distributions (not subject to employment tax).
• C-corp election: Files Form 1120 — subject to both corporate income tax (21% federal) and the 5.5% Florida corporate income tax. Dividends to members are taxed again (double taxation).

Tax Elections

One of the LLC's greatest advantages is taxation flexibility. Your Florida LLC can elect its tax treatment without changing its legal structure:

• Default (disregarded/partnership): Simplest. No entity-level tax in Florida.
• S-corp election (Form 2553): Potentially saves self-employment tax when net income exceeds $40,000-$50,000. You must pay yourself a "reasonable salary" and can take remaining profit as distributions.
• C-corp election (Form 8832): Rarely advantageous for small LLCs. Triggers Florida's 5.5% corporate income tax plus federal double taxation. May make sense for companies retaining significant earnings at the lower 21% federal rate.

For most Florida LLC owners earning under $250,000, the default pass-through classification or S-corp election is optimal. See our LLC vs S-Corp comparison for the break-even analysis.

Quarterly Estimated Taxes

If you expect to owe $1,000+ in federal taxes for the year, the IRS requires quarterly estimated payments. Since LLC pass-through income has no withholding, most LLC members must pay estimated taxes.

• Q1: April 15
• Q2: June 15
• Q3: September 15
• Q4: January 15 (following year)

Florida has no state estimated tax payments (because there is no state income tax for pass-through entities). Your quarterly estimates are federal only — calculated on Form 1040-ES.

Documentary Stamp Tax (Real Estate LLCs)

Florida imposes a documentary stamp tax on deeds and other documents transferring real property. This is particularly relevant for real estate LLCs:

• Rate: $0.70 per $100 of consideration (most counties) or $0.60 per $100 in Miami-Dade
• Triggered when: Transferring real property into your LLC, selling property, or refinancing
• Common trap: Transferring your personal residence into an LLC triggers documentary stamp tax unless an exemption applies

If you are forming an LLC to hold real estate, factor documentary stamp tax into your formation costs. Transferring a $300,000 property into your LLC could cost $2,100 in documentary stamp tax alone.

FAQ

Does my Florida LLC pay state income tax?

No — unless you elect C-corp taxation. The vast majority of Florida LLCs use pass-through taxation (default disregarded entity or partnership, or S-corp election). In all these cases, there is zero Florida state income tax. Only LLCs that affirmatively elect C-corp status owe the 5.5% Florida corporate income tax.

Do I need to collect sales tax?

If your LLC sells taxable tangible personal property, certain services (like pest control, cleaning services, or security services), commercial rentals, or transient accommodations in Florida — yes. Register for a sales tax permit (DR-1) with the Department of Revenue. Professional services like legal, accounting, and medical services are generally exempt.

Should I elect S-corp taxation for my LLC?

Consider S-corp election when your LLC's net income consistently exceeds $40,000-$50,000. The savings come from splitting income between salary (subject to payroll/SE tax) and distributions (not subject to employment tax). In Florida, the benefit is purely federal since there is no state income tax regardless of election. See our LLC vs S-Corp comparison for the detailed math.

What is the tangible personal property tax?

Florida counties tax business equipment, furniture, fixtures, and similar tangible assets annually. The first $25,000 is exempt (but you must file the DR-405 to claim it). Above that, rates are typically 1.5%-2.5% of assessed value. This catches many new LLC owners off guard — file your DR-405 with the county property appraiser by April 1.

Are there any first-year tax breaks for new Florida LLCs?

There is no first-year income tax exemption (because there is no income tax at all). The tangible personal property $25,000 exemption is available from year one. Sales tax registration is free. The annual report ($138.75) is not due until May 1 of the year following formation. Overall, Florida's startup tax burden is among the lowest in the country.