Sales and Use Tax in Florida: Guide for Businesses

Everything you need to know about Sales and Use Tax in Florida

If you plan to start a business in Florida or already have one in operation, it is essential to understand how the Sales and Use Tax (Sales and Use Tax) works. This tax is administered by the Florida Department of Revenue and applies to many business activities within the state.Understanding Sales and Use Tax in Florida will help you properly comply with your tax obligations.

In this article, we explain what sales tax is, what use tax is, who must register, and how the filing of these taxes works.

What is Sales Tax?

In Florida, every sale, admission, storage, or rental is subject to tax unless a specific exemption is established by law.

Sales tax is added to the price of taxable goods or services and is collected from the customer at the time of sale. Then, the business is responsible for collecting that tax and remitting it to the state.

This tax commonly applies to the sale of goods, certain services, rentals, and specific business activities.

What is Use Tax?

Use tax is related to the use, consumption, or storage of taxable goods or services when sales tax was not paid at the time of purchase.

This can occur in several situations, for example:

1. If you purchase a taxable item in Florida and did not pay sales tax, you must pay use tax.

2. If you purchase a tax-exempt item for resale but later decide to use it in your business or for personal use, you must pay use tax.

3. If you purchase an item outside of Florida and bring it into or receive it in Florida without paying sales tax, you must pay use tax.

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Who Must Pay or Collect These Taxes?

Before starting a business in Florida, it is important to determine whether your business activities or the products you sell are subject to sales and use tax.

If your business engages in taxable activities, you must register to collect sales tax or pay use tax with the Florida Department of Revenue.

Some activities that require registration include:

• Retail sale of taxable products

• Repair or alteration of tangible personal property

• Short-term rental accommodations (hotels, vacation homes, condominiums, etc.)

• Leasing or renting tangible personal property such as vehicles, machinery, or equipment

• Charging admission for recreational, sporting, or entertainment activities

• Manufacturing or producing goods for sale

• Sale of service warranty contracts

• Operation of vending or amusement machines

• Providing certain taxable services, such as commercial cleaning or pest control

• Out-of-state businesses selling to customers in Florida exceeding $100,000 in annual sales

• Businesses selling through marketplaces or digital platforms

Remote Sales in Florida

Since July 1, 2021, Florida law requires businesses making remote sales into the state to collect and remit sales tax if they exceed $100,000 in annual sales to Florida customers.

Examples of remote sales include:

• Online purchases

• Catalog or mail-order purchases

• Purchases made in another country

• Furniture purchased from out-of-state distributors

• Computer equipment purchased from out-of-state suppliers

These businesses must also collect any applicable local discretionary surtax.

Business Registration to Collect Tax

Businesses must register each business location to collect, report, and pay sales tax.

Once registered, the Florida Department of Revenue will send:

• A Certificate of Registration

• A Florida Annual Resale Certificate for Sales Tax

• Tax filing forms

  
  

The Certificate of Registration must be displayed in a visible place within the business.

If the business registers only to pay use tax, it will not receive a resale certificate.

Changes That Must Be Reported

You must notify the Florida Department of Revenue if any of the following changes occur:

• Change of business name

• Change of mailing address

• Change of location within the same county

• Closure or sale of the business

• Activation of the business to sell or lease taxable products or services

You must also submit a new registration if:

• The legal entity of the business changes

• The ownership of the business changes

Filing and Payment Frequency

Most new businesses begin by filing quarterly returns. However, the frequency depends on the total annual tax collected.

ANNUAL TAX COLLECTION — FILING FREQUENCY

• MORE THAN $1,000 — Monthly

• $501 – $1,000 — Quarterly

• $101 – $500 — Semiannual

• $100 OR LESS — Annual

If a business wishes to change its filing frequency, it must contact the Florida Department of Revenue Taxpayer Assistance.

Annual Resale Certificate

Businesses registered to collect sales tax receive a Florida Annual Resale Certificate for Sales Tax.

This certificate allows businesses to purchase or rent goods and services tax-free when they will be resold or re-leased.

Key points about this certificate:

• Expires on December 31 each year

• Registered businesses receive a new certificate annually

• Businesses filing electronically must print their own certificate

• Businesses filing by paper receive it by mail in mid-November

  
  

Documentation for Exempt Sales

If a business sells or leases tax-exempt goods or services for resale, it must document each exempt transaction.

This is done with:

• A copy of the customer’s Annual Resale Certificate, or

• An authorization number issued by the Department of Revenue

Conclusion

Sales and Use Tax in Florida is an essential part of tax compliance for many businesses. Understanding when to apply the tax, how to register, and how to properly file returns can help you avoid penalties and legal issues.

If you are starting a business or need assistance registering, filing, or managing sales tax, it is recommended to seek professional guidance to ensure compliance with all state regulations.