Key West Business Owner’s Tax Guide: What You Actually Owe, and to Whom

A Key West business owner pays into three separate systems: the IRS, the State of Florida, and Monroe County. Florida has no personal income tax, but that does not mean your business owes nothing at the state and local level. Most of the trouble I see comes from owners who assumed “no income tax” meant “no state taxes” and found out otherwise a year or two in.

Here is the full map. Each section links to a longer answer if you need the detail.

The short version

What	Who collects it	Who it applies to
Federal income and self-employment tax	IRS	Essentially every business
Corporate income tax	Florida Dept. of Revenue	C corporations and entities taxed as corporations
Sales and use tax	Florida Dept. of Revenue	Anyone selling taxable goods or certain services
Reemployment tax	Florida Dept. of Revenue	Businesses with employees
Tourist development tax	Monroe County Tax Collector	Rentals of six months or less
Local business tax receipt	City of Key West and Monroe County	Most businesses operating here

Does Florida tax my business income?

Florida has no personal income tax. That is real and it is one of the reasons people move businesses here. But Florida does levy a corporate income tax on C corporations and on entities taxed as corporations. If you operate as an LLC taxed as a partnership or an S corporation, the profit generally passes through to you and Florida does not tax it at the entity level.

The part owners miss: there can still be a filing obligation even when nothing is owed. More detail in does Florida have a business income tax.

What about sales tax on my lease?

This one changed, and a lot of the advice still floating around is out of date. Florida spent years charging sales tax on commercial rent, and that tax was repealed effective October 1, 2025. If you are still being charged it on a storefront or office lease, something is wrong.

Important carve-outs survived the repeal, and several of them matter a great deal down here: short-term rentals, self-storage, parking, and boat slips. See does Florida still charge sales tax on commercial rent.

Do I need a license to operate in Key West?

Generally you need a local business tax receipt, and in Key West that usually means one from the city and one from the county. It is a registration and revenue mechanism rather than a professional license, and it is separate from any state licensing your trade requires. Details in do I need a business tax receipt in Key West.

I rent out property. What do I collect?

If you rent accommodation for six months or less, you are almost certainly collecting Monroe County tourist development tax at 5 percent, and state sales tax on top of that. This applies to far more owners than realize it, including people renting a single unit through a platform. See who has to collect Monroe County tourist development tax.

I have people working for me

Two separate issues, and they compound. First, are those people employees or contractors? Getting that wrong is one of the more expensive mistakes available to a small business. Second, if they are employees, you owe Florida reemployment tax and you have to register for it.

See employee or independent contractor and what is Florida reemployment tax.

I run charters, tours, or a marina

The rules here are genuinely specific and they are not obvious. Boat slips stayed taxable even after the commercial rent repeal. Charter and tour treatment depends on the structure of what you are selling. If this is your business, read do I owe sales tax on charters, tours, and boat slips.

Where owners usually go wrong

• Assuming no income tax means no state taxes. Sales tax, reemployment tax, and tourist development tax have nothing to do with income tax and they all have their own registrations and deadlines.
• Registering for one thing and thinking they are covered. The state, the county, and the city are three separate registrations with three separate systems.
• Missing the collection obligations entirely. Sales tax and tourist development tax are money you hold on someone else’s behalf. Falling behind on those is a much worse problem than falling behind on your own income tax.
• Relying on a platform to handle it. Some booking platforms remit some taxes in some counties. That is not the same as all of them handling all of it, and the liability stays with you.

Frequently asked questions

Does Florida have a state income tax?
Not on individuals. Florida does have a corporate income tax that applies to C corporations and entities taxed as corporations. Pass-through entities generally are not taxed at the state entity level.

Do I still pay sales tax on my commercial lease in Florida?
No. Florida repealed the sales tax on commercial rent effective October 1, 2025. Short-term rentals, self-storage, parking, and boat slips remain taxable under separate rules.

What is the tourist development tax in Monroe County?
Five percent on rentals of accommodation for six months or less, collected by the Monroe County Tax Collector, in addition to state sales tax.

Do I need both a city and a county business tax receipt in Key West?
Usually yes. Most businesses operating inside city limits need both. Confirm your specific situation with each office, since requirements vary by activity and location.

Let’s sit down and talk

If you are starting a business here, or you have been running one and are not certain you are registered for everything you should be, that is worth an hour. I would rather sort it out with you now than help you unwind it later. I have been practicing in the Keys for over twenty years and this is a conversation I have often.

Call 305-363-5429 or contact Robert. You can also read more about working with a small business CPA in Key West or our small business accounting services.

This article is general information current as of July 2026, not tax advice for your specific situation. Rates and rules change. Confirm the current figures before you act on them.