An Overview of Florida Taxes
Sizing up Florida Tax Rates
Florida doesn't have a personal income tax, and it doesn't have an estate tax or an inheritance tax, either. It does impose a variety of sales and property taxes, however, and some are pretty significant. The state's overall tax burden has nonetheless ranked among the nation's lowest for decades, according to the Tax Foundation, a non-profit and non-partisan educational and research organization.
The Florida Property Tax
The Florida constitution reserves all revenue from property taxes for local governments—the state itself doesn't use any of this money. Property taxes are based on the "just value" or market value of properties as they're assessed by a local appraiser as of January 1 of each year.
Increases in value are limited to 3% of the previous year's assessment or the Consumer Price Index (CPI), whichever is less. This limitation is known as the "Save Our Homes" cap.
Taxes are based on millage rates set by local governments, with 10 mills being equal to 1%. The millage rate is multiplied by the value of the property to determine the dollar amount of property tax. County, city, and school districts are permitted to levy taxes at up to 10 mills each.
Special districts, such as water management, can levy additional taxes, usually at under 2 mills.
Property Tax Exemptions
Florida offers several property tax exemptions that can help reduce your tax bill if you qualify for them. They include a homestead exemption of up to $50,000. Exemptions are also available for senior citizens over age 65 and for the disabled.
Veterans can qualify for four different types of exemptions, and widows and widowers are entitled to a $500 exemption provided that they haven't remarried and weren't divorced at the time of their ex-spouse's death. Homeowners who are legally blind are also entitled to a $500 exemption.
Florida Income Tax
Florida is one of only seven states that has no personal income tax. The state tax on intangible assets, such as stocks, bonds, and mutual funds, was repealed in 2007, so this type of property is no longer taxed, either.
State Corporate Taxes
Florida does impose a 4.458% corporate income tax. Florida Democrat Andrew Gillum vowed to increase this to 7.75% when he campaigned for governor in November 2018. His goal was to raise an additional $1 billion a year in revenues, which he said would go mostly to education, but he was narrowly defeated by a .4% margin.
This tax rate was nonetheless slated to increase to 5.5% in 2018, but legislation was passed to keep it at 4.458%, at least through 2021.
Florida Estate and Inheritance Taxes
There are no "death taxes" in Florida, either on the value of estates or on gifts received by beneficiaries. The Florida estate tax was repealed effective December 31, 2004 and it cannot be reinstated. The state's constitution prohibits it.
Sales and Other Florida State Taxes
Florida state taxes apply to several types of purchases:
- A stamp tax of 70 cents per $100 of value is assessed on documents that transfer interest in Florida real estate, such as warranty deeds and quit claim deeds.
- A tax is also levied on notes, bonds, mortgages, liens, and other written obligations to pay that are filed or recorded in Florida. The rate for these types of contracts is 35 cents per $100 of value. Counties are permitted to add additional fees.
- Florida charges a state sales tax of 6%. Food, prescription drugs, and non-prescription drugs are exempt from taxation, and amusement machine receipts are only 4%. But electricity comes with a sales and use tax of 6.95%, and counties can charge their own additional sales taxes, bringing the tax rate up to as much as 9.5% in some areas.
- The Florida gas tax is actually exorbitant, offsetting some of the state's other tax breaks—at least for those who drive a lot. It's 41.99 cents a gallon as of 2019, and this figure excludes the federal excise tax. Florida ranks tenth for the highest gas tax in the country.
- The state charges a $1.33 tax on each pack of cigarettes. There's also a surcharge for other tobacco products, excluding cigars, that's equal to 85% of the wholesale price. Still, the state ranks 31st overall for this tax rate, according to the Federation of Tax Administrators.
- Hotel tax rates vary by county. They range from 2% to 6%, and this is in addition to the state sales tax rate of 6%. These taxes are known as the Tourist Development Tax and are charged on hotel rooms, but rooms that are leased for more than six months are exempt.
On the bright side, you can buy a flag in Florida—either the U.S. flag or that of the state—without paying any tax at all.
An Overview of Some Florida Tax Rates
- Cigarette tax: $1.33 per pack
- Corporate tax rate: 4.458% through 2021
- Estate tax: None
- Gas tax: 41.99 cents per gallon
- Inheritance tax: None
- Personal income tax: None
- Property tax: Cannot increase by more than 3% of the previous year’s assessment or the Consumer Price Index, whichever is less
- Sales tax rate: 6%
- Sales tax rate for electricity: 6.95%
- Stamp tax: 70 cents per $100 of value
State of Florida. "The 2019 Florida Statutes." Accessed Sept. 16, 2020.
City of Jacksonville. "Save Our Homes - Assessment Cap On Homesteaded Property." Accessed Sept. 16, 2020.
Florida Dept. of Revenue. "Property Tax Exemptions and Additional Benefits." Accessed Sept, 16, 2020.
Florida Dept. of Revenue. "Original Application for Homestead and Related Tax Exemptions." Page 2. Accessed Sept. 16, 2020.
Tax Foundation. "State Corporate Income Tax Rates and Brackets for 2020." Accessed Sept. 16, 2020.
Florida Dept. of Revenue. "Estate Tax." Accessed Sept. 16, 2020.
Florida Dept. of Revenue. "Documentary Stamp Tax." Accessed Sept. 16, 2020.
Florida Dept. of Revenue. "Florida Sales and Use Tax." Accessed Sept. 16, 2020.
Tax Foundation. "How High Are Gas Taxes in Your State?" Accessed Sept. 16, 2020.
Campaign for Tobacco-Free Kids. "State Excise Tax Rates for Non-Cigarette Tobacco Products." Accessed Sept. 16, 2020.
Florida Dept. of Revenue. "Local Option Transient Rental Tax Rates." Accessed Sept. 16, 2020.