Taxes and License Fees in Florida

Once you have presented the authorities with your registration details and they have approved your business, you are officially capable of going about your operations. But before you do so, you have to check what requirements you need to meet to remain in good standing with the state. These requirements relate to licensing and reports you must renew or file each year, respectively.

What kind of tax will you owe on Florida business income?

Federal taxes

Unless otherwise stated, LLCs don’t need pay federal income taxes or pay anything to the national government. Instead, this responsibility falls on you and other members of your organization. To ensure you are on the right track, you must include any income and losses accrued from the business when filing your returns.

However, it helps to note that companies are not precisely restricted to one structure. Generally, authorities treat you based on the number of members in the organization. As such, if you own the company alone, you can find yourself treated as a sole proprietorship. You are always free to select the structure that works best for your business when starting the company, or to file a corporate tax return. You can also change it as you go, based on the advice of your accountant.

For the most part, however, you can avoid double taxation by only reporting what you have made to the government and using your returns to make payments.

State taxes

You will be happy to know that you will not be liable to pay a personal income tax, and neither will you need to report your income and losses when filing individual returns. It’s no wonder many businesses are opting to move their operations to this region, as it is like a tax haven. It gets even better. The authorities do not require you to pay a “franchise” or “privilege” tax, unlike the case in other regions. In this case, filing should be a simple task, and operations should not be as costly as they would be in other areas.

Miscellaneous Taxes

The additional tax requirements come down to what you do. For example, if you sell physical goods, you would need to apply for a sales and use tax permit. Liaise with the authorities to understand what will pertain to you.

Sales and Use Taxes

Unless the transactions are exempt from taxation, you must collect tax for every sale, admission, rental, or storage in the region. You add this fee to the value of the goods, and the purchaser pays it. You must have a permit to collect this fee on behalf of the authorities, which you should render to them at a periodic rate. At present, the base rate starts at 6% though some activities may have higher or lower rates. For example, leasing commercial real estate property requires that you collect a fee of 5.5% of the lease.

Use tax is a bit different from the sales tax and only applies when the latter was not paid at the time of the exchange. Take an example of where you buy an item that is exempt from tax, and you want to resell or use it for business gain; you are required to render this tax. Check on this fee’s requirements and make sure that you comply.

Unemployment Insurance Tax

If you are hiring people to work in your company, you will need to register to pay this tax with the Florida Department of Revenue, which goes by the name re-employment. As a new employer, you will be liable to pay 2.7% on the first seven thousand dollars of yearly wages.

Please note that operating in some industries may make you subject to added taxes, and you need to check with the authorities on this.

Does an LLC need a business license in Florida?

Here is how you can look at this. By registering your business, you make the authorities aware of your intent, and if they approve it, you are now officially able to conduct your business. However, depending on the nature of your operations, you may need to go a step further and get a LLC business license in Florida/ permit. Not everyone will need one, and it helps assess your activities and engage a professional when making this decision.

Also, note that operating in some specific cities and counties may require you to get own specific licenses/ permits on top of those you get from the state. Let’s suppose you want to put up a building. You would need to access the county or municipality’s website to get a license to allow such construction. So, once you are done clearing with the state, make sure that you also contact the local government to be on the right track.

You can find out more about your requirements by accessing the Department of Business and Professional Regulation website.

Do LLCs file annual reports in Florida?

Once you have all the necessary permits, you are free to get started on your business. But to ensure nobody can pull the rug out from under your feet, the LLC will need to submit its Annual Report and pay the annual registration fee. These documents enable the state to keep an eye on you by updating its records and ensuring it has accurate details about your business. Every year before the end of the 1st of May, you need to make sure you have filed the Annual Report in Florida. The Department of State helps a great deal with this by sending a reminder to you before the deadline approaches, giving you enough time to get your affairs in order.

Please note that this is due annually, and failure to meet the deadline can land you in legal trouble. If you are filing an amended report, you are subject to a fee currently $50.

How do I file an annual report in Florida?

Timing is essential, and you need to make sure that you start updating your records the year after you form your company. For example, if you created your company in 2020, you must update your details by the 1st of May 2021. You can even do this in January 2021, so long as you beat the deadline. After this, you will need to keep updating your details every year until you terminate your business.

The Florida LLC annual report filing can take place online on Florida’s e-Filing portal, using your prepaid Sunbiz e-file account. All you need to do is confirm the details you had previously provided when first contacting the state. If you have made any changes in recent months, you need to update the annual report Florida details.

Each year will see you Filing the Annual Report which will cost you $138.75 before the Annual Report due date. Given that this fee is not refundable, it would serve you to get the details right to avoid having to amend the document as this will cost you extra. Late submissions will incur a $400 fee. Please note that the penalty is not all you need to worry about. If the authorities do not receive your report by the 3rd week of September, the state can dissolve your LLC. If this happens, you lose your protective veil and become vulnerable to legal hurdles.

The processing time varies and depends on the number of applications at any given time. You may end up waiting a while longer if you file close to the deadline. If you can, always try and get the report updated before the last month.

Frequently Asked Question

How much does it cost to start an LLC in Florida?

The registration documents alone set you back $100, assuming that you will not engage third-party services to help you get started. For additional assistance, you may end up paying more. For example, if you want to have your point of contact handling this side of things, you may end up paying up to $500 a year. The authorities also expect you to select a point of contact, and you pay $25 for this filing.

Please note that these fees are separate from the maintenance costs of the business. You will need to keep up with some annual charges, such as the annual report, which comes to $138.75 each year. Some costs are one-off but still add to the startup charges. For example, you will pay $25 when you make changes to the business that affect your registration documents.

Away from maintenance, you will need to part with $125 to get started, assuming that you do everything without outside help.

How long does it take to get an LLC entity set up in Florida?

The waiting time is not standard as it comes down to how many people are making applications. If you are taking the standard route, you can wait for anything from two to five business days to get a response. However, you always have the option to expedite the process within 24 hours at an additional fee. A professional service can do this for you at a cost, or you can do so yourself by walking into the instead of using mail or the online portal.

Why is there no state tax in Florida?

The state constitution does not provide for such payments, though business persons still have to pay the federal income tax. The region ranks as one of the best for people wishing to enjoy reduced fiscal burdens.