Florida Sales Tax for Small Businesses: A Plain-English Guide

Florida has no personal income tax, which is great. What it does have is sales tax, and for small business owners that is the obligation most likely to create a surprise bill. Sales tax is money you collect on the state’s behalf, and the state takes it seriously when it goes unremitted. Here is what Keys business owners need to understand.

Who Has to Collect Sales Tax

If you sell taxable goods or certain services in Florida, you generally need to register with the Florida Department of Revenue and collect sales tax. The statewide rate is 6 percent on most sales, but that is only part of the number you actually charge.

The Monroe County Surtax

On top of the state rate, most counties add a discretionary sales surtax. Monroe County, which covers the Florida Keys, has its own surtax that gets added to the 6 percent state rate. That means the total you collect in Key West is higher than the base state rate, and the surtax has its own rules, including a cap on the portion of a single large sale it applies to. Charging the wrong combined rate is one of the most common mistakes new Keys businesses make.

Vacation Rentals and Tourist Taxes

The Keys run on tourism, and short-term rentals are everywhere. If you rent out a home or condo for six months or less, that income is generally subject to sales tax and to the local tourist development tax, sometimes called the bed tax. Platforms like Airbnb may collect some of these for you, but not always all of them, and the responsibility to get it right still lands on you. Many rental owners assume the platform has it covered and find out otherwise during an audit.

Filing and Paying on Time

Florida assigns you a filing frequency, monthly, quarterly, or annually, based on how much tax you collect. Returns are generally due on the first of the month and considered late after the 20th. File on time and you may qualify for a small collection allowance. File late and you face penalties plus interest, even if you remit the full amount of tax you owe. The penalty is for being late, not just for being short.

Where Businesses Get Into Trouble

• Charging the state rate but forgetting the county surtax
• Treating collected sales tax as business income and spending it
• Missing the difference between taxable and exempt sales
• Assuming a rental platform handles every tax that applies

The cleanest fix is to track sales tax correctly from the start so the money is set aside and the filings are routine. Robert E. Clark handles sales tax tracking and filing as part of small business accounting, and if you are already behind, he can help through tax resolution with the Florida Department of Revenue.

For the full picture of how he supports Keys businesses, see the small business CPA page, then call 305-363-5429 or contact Robert.