Florida Corporate Income Tax — When Your LLC Owes the 5.5% Rate

While Florida has no personal income tax, it does impose a corporate income tax of 5.5% under Chapter 220 of the Florida Statutes. For most LLCs, this tax is irrelevant — it only applies if your LLC affirmatively elects to be taxed as a C-corporation by filing IRS Form 8832. The vast majority of Florida LLCs use pass-through taxation and owe $0 in Florida corporate income tax.

For the complete Florida LLC tax picture, see our tax guide. For information on tax elections, see our tax elections page.

Who Owes Florida Corporate Income Tax

LLCs that OWE it:

• LLCs that have elected C-corp tax treatment (filed IRS Form 8832)
• These LLCs are treated as corporations for tax purposes and fall under Chapter 220

LLCs that DO NOT owe it (most LLCs):

• Single-member LLCs (disregarded entities) — pass-through, no state income tax
• Multi-member LLCs (partnerships) — pass-through, no state income tax
• LLCs with S-corp election — pass-through, no state income tax
• Any LLC using default pass-through classification

If you have not filed Form 8832 with the IRS electing corporate treatment, you do not owe Florida corporate income tax. Period.

Tax Rate and Exemption

• Rate: 5.5% of net income (technically 5.5% of Florida taxable income, which starts with federal taxable income and applies Florida adjustments)
• Exemption: First $50,000 of adjusted federal income is exempt
• Effective rate on first $100,000: 2.75% (because only $50,000 is taxed: $50,000 x 5.5% = $2,750)

The tax is levied on net income after deductions — not gross revenue. Your LLC can deduct all ordinary business expenses, depreciation, and other standard deductions before calculating the tax.

Florida Eliminated the Franchise Tax

Important update: Florida eliminated its corporate franchise tax effective January 1, 2021. If you see references to a Florida "franchise tax" in older guides, it no longer exists. The only state-level income-type tax remaining is the 5.5% corporate income tax — and again, it only applies to entities taxed as C-corporations.

Florida also does not have a separate "annual LLC fee" beyond the $138.75 annual report. Unlike California (which charges an $800 minimum franchise tax to all LLCs regardless of structure), Florida has no minimum annual tax for pass-through LLCs.

Filing Requirements (C-Corp Elected LLCs Only)

If your LLC has elected C-corp taxation and owes Florida corporate income tax:

• Form: Florida Form F-1120 (Florida Corporate Income/Franchise Tax Return)
• Due date: May 1 for calendar-year filers (the first day of the 5th month after tax year close)
• Extension: Available — file Florida Form F-7004 for a 6-month extension (but estimated tax is still due by the original date)
• Estimated payments: Required quarterly if annual tax liability exceeds $2,500
  • Q1: Last day of 4th month (April 30)
  • Q2: Last day of 6th month (June 30)
  • Q3: Last day of 9th month (September 30)
  • Q4: Last day of 12th month (December 31)
• Filed with: Florida Department of Revenue (not the Division of Corporations)

When C-Corp Election (and the 5.5% Tax) Might Make Sense

Despite triggering the 5.5% Florida tax, C-corp election can make sense in narrow situations:

• Retaining earnings at lower rates: The 21% federal corporate rate is lower than the top individual rate (37%). If your LLC retains significant profits for reinvestment rather than distributing them, the combined 26.5% rate (21% federal + 5.5% Florida) may be lower than the individual rate + self-employment tax you would owe on pass-through income.
• Specific fringe benefit deductions: C-corps can deduct certain employee benefits (health insurance premiums, educational assistance) that pass-through owners cannot deduct in the same way.

But beware double taxation: When you eventually distribute retained earnings as dividends, they are taxed again at the individual level (qualified dividend rate: 15% or 20% + 3.8% NIIT). For most small Florida LLCs, pass-through taxation (or S-corp election) is more tax-efficient.

Note: This page provides general tax information. Consult a CPA or tax attorney for advice specific to your situation.

FAQ

Does the 5.5% apply to S-corp elected LLCs?

No. S-corps are pass-through entities for both federal and Florida state tax purposes. The 5.5% corporate income tax applies only to C-corporations and entities taxed as C-corporations. If your LLC elected S-corp status (Form 2553), it is not subject to Florida corporate income tax.

Is the $50,000 exemption per member or per LLC?

Per LLC. The $50,000 exemption applies to the entity's total Florida taxable income, not per-member. One LLC with $100,000 in income gets one $50,000 exemption, regardless of how many members it has.

What happened to the Florida franchise tax?

Florida eliminated its corporate franchise tax effective January 1, 2021. It previously applied to all corporate entities (and LLCs taxed as corporations) at a rate of 3.5% on capital surplus. It no longer exists. The 5.5% income tax remains as the sole state-level corporate tax.

Can I switch my LLC back to pass-through to avoid the 5.5%?

Yes, but with restrictions. If you elected C-corp taxation via Form 8832, you can revoke the election — but you cannot change the election more than once in a 60-month period. Consult a tax professional before making or revoking entity classification elections.