Florida LLC Taxes

Understanding the tax obligations that pertain to your Florida LLC is essential to ensure your business complies with federal, state, and local regulations.

In this guide, we'll explore the various types of Florida LLC taxes you should be aware of and offer a step-by-step approach on how to effectively manage your tax responsibilities in the state.

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

How Is an LLC Taxed in Florida?

Taxation in Florida isn’t applied in the same way to all LLCs – instead, it varies depending on a number of factors, such as an LLC’s nature, locality, and tax election.

While LLCs typically benefit from pass-through taxation by default, they can elect to be taxed as one of the following:

• C Corporation: The LLC is treated as a separate entity to its owners, paying corporate income tax rates on its total profit while the owners also pay personal income taxes on any distributions they take.
• S Corporation: In return for paying owners a “reasonable salary,” the LLC’s remaining profits are distributed among members without a need to pay FICA or self-employment taxes on them.

The following sections go into the various tax responsibilities of your LLC at local, state, and federal levels in Florida to help you ensure your LLC navigates them effectively.

Florida Local Taxes

The local laws and tax regulations differ greatly between different localities in Florida, where local governments are authorized by state law to impose a number of different option taxes.

Below is a list of tax types that your city or county may impose:

Discretionary Sales Surtaxes

Discretionary sales surtaxes, or local option county sales taxes, are extra charges imposed on specific transactions involving goods and services already subject to the state's general sales tax of 6.0%. However, there isn’t normally a large difference between different areas since local governments are only authorized to set these rates within the limits prescribed by Florida Statutes.

In Florida, there are nine distinct types of local discretionary sales surtaxes, including:

• Charter County and Regional Transportation System
• County Public Hospital
• Emergency Fire Rescue Services and Facilities
• Indigent Care and Trauma Center
• Local Government Infrastructure
• Pension Liability
• School Capital Outlay
• Small County
• Voter-approved Indigent Care

Each of these surtax types has its own defined use, contributing to essential services, infrastructure, and community needs within the respective counties.

Note: You can find the specific sales surtax rate in effect in your area by visiting the Florida Department of Revenue’s Forms and Publications page.

Local Option Fuel Taxes

In Florida, county governments are able to add some extra taxes to the fuel your business may buy for its cars and trucks. There are three main types of these local option fuel taxes for businesses to be aware of:

• Ninth-Cent Fuel Tax: This is a tax of $0.01 on every gallon of motor and diesel fuel sold in the county.
• Variable Tax: This tax can be charged at $0.01–$0.06 on each gallon of motor and diesel fuel sold within a county’s jurisdiction.
• Motor Fuel Tax: This is a tax of $0.01–$0.05 on every gallon of motor fuel (not diesel) sold within a county. The money this tax generates must be used for certain improvements the county has planned, like fixing roads.

Each county can decide the rate at which to impose these taxes within the limits outlined above. The only exception to this is for diesel fuel, which the state government requires all counties to charge at a rate of $0.06 per gallon, no matter what. 

Transient Rental Taxes/Tourist Development Taxes

In Florida, counties can choose to impose a transient rental tax that varies from 3% to 6% on people staying in hotels, motels, apartments, or even timeshare resorts for a short time (like vacations). 

• 1% or 2% Tax: The county's government can decide to charge an extra 1% or 2% on the total cost of renting a place for a short stay. 
• Additional 1% Tax: If a county has levied the 1% or 2% tax for at least three years, it will also be able to add an extra 1%. 
• High Tourism Impact Tax: Counties certified by the Florida Department of Revenue as having a lot of tourism are entitled to add another 1% tax on short-term rentals.
• Professional Sports Franchise Facility Tax: Some counties can choose to add up to 1% more tax on short-term rentals; however, all revenue generated by this tax is earmarked for sports facilities and to promote Florida tourism.
• Additional Professional Sports Franchise Facility Tax: Except for Volusia and Miami-Dade, any counties that have already added the sports tax can add an extra tax of up to 1% for the same purposes.

Note: You can find a list of the individual tax rates in effect in your county using the Local Option Transient Rental Tax Rates table.

Tourist Impact Tax

Certain regions of Florida considered to be "areas of critical state concern" are entitled to charge an extra tax of 1% in Tourist Impact Taxes on the total cost of each customer’s stay in places like hotels or short-term rentals.

These areas include places like the Big Cypress Area (primarily in Collier County), the Green Swamp Area in Central Florida, the Florida Keys Area in South Florida, and the Apalachicola Bay Area in Franklin County.

Convention Development Taxes

Duval, Miami-Dade, and Volusia in Florida are authorized under Florida State Law to levy convention development taxes, which are collected when people stay in places like hotels or rentals for short periods, usually for events or conventions. There are three main types of these taxes:

• Consolidated County Convention Development Tax (2%): Any county with a government that’s consolidated with at least one municipality is eligible to levy a 2% tax on the cost of staying in tourist-related facilities. At the moment, this is only in force in Duval County.
• Charter County Convention Development Tax (3%): Only Miami-Dade County is entitled to impose a 3% tax on the cost of short stays. 
• Special District, Special, and Subcounty Convention Development Taxes (Up to 3%): In Volusia County, they can charge up to 3% extra on short-term stays.

Local Option Food and Beverage Taxes

Counties defined under Florida Statutes are able to impose two additional taxes on certain food and drinks:

• 2% Tax in Hotels and Motels
• 1% Tax in Some Places

For the moment, only Miami-Dade County has been defined as eligible to levy these taxes.

Municipal Resort Tax

Several eligible municipalities across Florida, including Bal Harbour, Miami Beach, and Surfside, are able to impose a municipal resort tax on two main things:

1. When people stay in hotels or rentals, there can be up to a 4% tax on what they pay for their stay.
2. When people eat or drink at restaurants and bars, there can be up to a 2% tax on their food and drinks.

The revenue generated from this tax helps boost tourism, maintain important facilities, and reduce property taxes used for these purposes.

For a closer look into the 14 special situations, as well as the requirements of each, see the Florida Comptroller of Public Accounts website.

Recommended Service: Schedule a free consultation with 1-800Accountant to ensure your business remains legally compliant. 

Florida State Taxes

Every state has its own regulations and rules that dictate how it taxes individuals and businesses. Below is a list of the most relevant state-level taxes for LLCs in Florida. 

Income Taxes

In terms of state income tax, Florida is one of the most business-friendly states in the US. It doesn’t have any personal income tax at a state level and levies Florida corporate income tax at a flat rate of 5.5%, which is much lower than many other states.

What this means for your LLC is that it won’t need to pay taxes on its income at a state level unless it’s elected to be taxed as a C Corp. In this case, your business will need to pay corporate income tax for the privilege of operating in Florida.

Note: If your LLC is structured as a C corp, it will need to submit a corporate income tax return regardless of whether it owes any tax or not. This can be done using Florida Form F-1120.

Sales-Related Taxes

Florida sales tax is applied at a flat rate of 6% that’s added to the price of all tangible goods and services sold within the state and paid by consumers. In Florida, many counties also impose an additional “sales surcharge” that can increase the total sales tax up to 7.5%.

Most physical goods (i.e., personal property such as clothes, electronics, and furniture) are subject to this general state sales tax rate, with the following exceptions:

• Retail Sales of New Mobile Homes: 3%
• Amusement Machine Receipts: 4%
• Rental, Lease, or License of Commercial Real Property: 5.5%
• Electricity: 6.95%

To ensure your LLC’s compliance, regardless of what it sells, it’s best to consult an accountant who can walk you through the requirements.

Note: If your business loans to sell taxable goods or services, you must obtain a sales tax permit from the Florida Comptroller of Public Accounts.

Business Privilege Taxes

In Florida, there are a number of statewide taxes and charges levied on LLCs for the privilege of engaging in certain specific sectors and business activities. The state has authorized a number of these business privilege taxes, with some of the most common ones being:

• Fuel Tax
• Gross Receipts Tax on Dry Cleaning Businesses
• Motor Vehicle Warranty Fee
• New Tire Fee
• Prepaid Wireless Fee
• Secondhand Dealers and Secondary Metal Recyclers

The specifics of each of these taxes – including rates, filing requirements, and exemptions – will vary on a case-by-case basis, which makes it important to consult an accountant in order to ensure your LLC’s compliance.

For a full list of all Florida taxes, as well as more information on how they work, visit the Florida Department of Revenue website.

Federal Taxes

Regardless of where your business is located, if you run an LLC in the US, there are a number of federal taxes you’ll need to pay. Below are some of the main types your LLC may be required to pay for federal tax purposes:

Income Tax

By default, the Internal Revenue Service (IRS) will not treat single and multi-member LLCs as separate entities from you for tax purposes. What this means is that you’ll need to report your share of your LLC’s profits on your individual tax returns and pay federal income tax on them at the personal rate of your tax bracket.

Having said that, keep in mind that LLCs can also elect to be taxed as C corps or S corps, which changes how federal income taxes are levied in different ways.

Self-Employment Tax

In addition to income tax, members of single- and multi-member LLCs will need to pay federal self-employment tax on the share of the business’s profits that they report on their personal tax return at the end of the year.

This tax is levied at a flat rate of 15.3% against businesses with net earnings that exceed $400, though it is applied slightly differently to LLCs that have elected to be taxed as S corps or C corps.

Employment Tax

If your LLC hires any employees, it will need to withhold a portion of their salaries to cover various types of taxes on your employees’ behalf – including Social Security, Medicare (FICA), and payroll taxes.

Furthermore, the members of any LLCs that have elected to be taxed as an S corp will be required to pay employment taxes on their salaries. However, in return for this, the remainder of the business’s profit after these salaries have been distributed will be safe from both self-employment and FICA taxes.

Excise Tax

If your LLC engages in certain types of business (such as the sale of alcohol and tobacco or operating a heavy highway vehicle, among others), it may need to pay federal excise taxes in order to do so legally. Each excise tax comes with its own set of rules, rates, and filing obligations you’ll need to be aware of.

Understanding and fulfilling these federal tax obligations is crucial for keeping your LLC compliant and avoiding unnecessary financial penalties and/or fines.

How to File LLC Taxes in Florida

Below, we’ve outlined the general process an LLC in Florida will need to follow in order to file their tax return correctly. Note that the specificities of each step will vary slightly depending on how your LLC is organized and the specific locality it’s based in.

Step 1: Gather Your Documentation

To ensure accurate tax filing, thorough record-keeping is essential. Begin by collecting your personal information, including:

• You and your partner’s Social Security number, date of birth, and residential address
• The previous year’s tax returns
• Your LLC’s Employer Identification Number (EIN)

Then, you’ll need to gather all documentation related to your business income, such as:

• Invoices you’ve issued
• Sales transaction logs
• Electronic payment reports from services like PayPal or Stripe

Lastly, assemble all records pertaining to your business expenses, which should cover:

• Lease receipts for your business premises
• Bills for utilities
• Records of office supplies purchases
• Documentation of business-related travel
• Payroll records for employees

Note: Depending on how your LLC is organized and its tax election, you may need different information for your tax return. 

Step 2: Find The Right Tax Forms

Once you've gathered all necessary documents, the next step is to select the correct tax forms for your LLC based on its organization:

• Single-Member LLCs: The business’s total income and expenses are reported on a Schedule C form, which is attached to the owner’s federal income tax return and due by April 15 or the following business day if it lands on a weekend or holiday.
• Multi-Member LLCs: File an information return using Form 1065. Members must fill out a Schedule K-1 showing their individual earnings or losses by March 15 or the next business day.
• C Corporations: File a corporate tax return using Form 1120 by the April 15 deadline or on the next business day if it's a weekend or holiday.
• S Corporations: Use Form 1120-S for the corporate tax return and distribute Schedule K-1 forms to shareholders for reporting their shares of profits or losses. The deadline for filing taxes using 1120-S is March 15 or the following business day.

Since state and local taxes will have their own individual forms and requirements, we recommend contacting your municipality or hiring an accountant for guidance.

With the appropriate documentation gathered and the correct tax forms for your business entity on hand, you’ll be ready to fill them out and submit them.

Step 3: File Your Taxes

The majority of businesses choose electronic filing for its speed, enhanced security, and reliability compared to paper filing, which can be slower and more prone to errors. Here’s how it works:

• Federal Tax Returns: The IRS provides two electronic services for tax submission: Free File for businesses with an AGI below $72,000 and Free Fillable Forms for those above the threshold.
• State and Local Tax Returns: Depending on the specific tax, the filing requirements can vary. For the majority of your taxes you’ll be able to file them online through the Florida Department of Revenue website.

Note: These electronic filing tools are best suited for those who are already confident in handling their LLC taxes as if filling out a paper form. 

For new business owners, we recommend opting for the expertise of a tax professional in order to ensure both accuracy and compliance in your tax filings. 

Recommended: Schedule a free consultation with 1-800Accountant to stay on top of your taxes. 

Keep Your Florida LLC Compliant

While LLCs are generally easier to maintain than corporations, there are certain state and local formalities your LLC must satisfy in order to remain compliant. 

Florida Annual Report

In order to keep your Florida limited liability company compliant and running smoothly, you’ll need to submit an annual report between January 1 and May 1 and pay the associated $138.75 filing fee. You’ll only be able to file this annual report online using Florida’s Annual Report-Sunbiz page.

Be careful to submit your annual report in a timely manner, as LLCs must pay a $400 late fee if they fail to file their annual report by the deadline. It's crucial to note you risk administrative dissolution for your LLC if you fail to submit your annual report by the third Friday of September.

Licensure and Tax Requirements

In Florida, almost all businesses are required to obtain various licenses and permits at the local, state, and federal levels. Below, we’ve broken down three of the most common types your LLC may need:

• Sales Tax Licenses: If your LLC plans to sell or lease physical goods that would typically need to pay sales tax, you’ll need to obtain a specific license online from the Florida Department of Treasury.
• Professional Licenses: If your LLC plans to operate in a specialized sector such as healthcare, law, or accounting, it will be required to secure a professional license pertinent to that field. For example, to start an accountancy firm, you’d first need to obtain the relevant license from the Florida State Board of Public Accountancy.
• Environmental Permits: If your business engages in operations that might affect the environment, it will probably require certain permits to legally operate, such as the Florida Pollutant Discharge Elimination System (TPDES) permit, in order to legally release pollutants.

Florida LLC Taxes FAQs