Florida State Tax Updates

April 19, 2024

Authored by: Bonnie Susmano, JD, MBA and Ryan Schupp

On April 8, 2024, the Florida Department of Revenue released Florida Tax Information Publication No. 24A01-02, announcing a sales tax rate reduction on using, renting, leasing, or licensing commercial real property. Effective June 1, 2024, the sales tax rate on commercial property rentals is reduced from 4.5% to 2%. The reduced rate does not apply to rentals lasting less than six months, motor vehicle parking or storage spaces, docking spaces for boats, or storage spaces for aircraft. Rental payments paid after the effective date but for rental periods between December 1, 2023, and May 31, 2024, will be subject to the original 4.5% rate plus any applicable discretionary sales surtax. Rental payments paid before the effective dates but for rental periods on or after June 1, 2024, will be subject to the 2% sales tax rate plus any discretionary sales surtax.

If you have questions about how sales tax affects your business, please reach out to a member of the Withum SALT Team.

November 30, 2023

Authored by: Katie Nguyen, CPA and Leroy Solis, MBA

On November 13, 2023, Florida’s Governor Ron DeSantis signed L. 2023, H1, providing disaster relief from Hurricane Idalia that includes:

These exemptions are effective retroactively to August 30, 2023, to help taxpayers recover from damaged caused by the Hurricane. Specific counties are eligible for the disaster relief provisions include Charlotte, Citrus, Columbia, Dixie, Gilchrist, Hamilton, Hernando, Jefferson, Lafayette, Levy, Madison, Manatee, Pasco, Pinellas, Sarasota, Suwannee, and/or Taylor County. As the exemptions are retroactive, taxpayers may need to file refund claims to recoup taxes already paid.

If you have questions about Florida’s disaster relief provisions, please reach out to a member of the Withum SALT Team.

October 25, 2023

Authored by: Bonnie Susmano, JD, MBA and Brandon Vance, CPA

The Florida Department of Revenue recently published Technical Assistance Advisement TAA 23A19-001, holding a video service provider subject to the Communications Services Tax. The taxpayer provides digital goods and services that enable users to request customized and personalized messages from entertainers, musicians, athletes, and other social media influencers. The taxpayer also offered a service that permits real-time interaction with the selected influencer, which was billed on a per-minute basis. In issuing the TAA, the Department rejected the taxpayer’s assertion that it was offering an “information service.” Furthermore, the Department determined that the taxpayer’s offerings satisfied the definition of a communications service. Therefore, the taxpayer is subject to the Florida Communications Services Tax.

If you have questions about whether your business is subject to communication taxes, please reach out to a member of the Withum SALT Team.

October 24, 2023

Authored by: Jonathan Weinberg, JD, LLM, Principal and Ryan Schupp

On September 12, 2023, the Florida Department of Revenue issued Technical Assistance Memo 23A-016, holding a taxpayer was not required to collect sales and use tax on tangible personal property intended to be exported from Florida. The Department found the taxpayer’s documentation, including a detailed description of the property sold, shipment date, ultimate destination, and freight forwarder information, substantiated that the property was being exported outside the country and, thus, the taxpayer was not obligated to collect and remit sales tax on the transaction.

If you have questions about whether your business is obligated to collect and remit sales tax, please reach out to a member of the Withum SALT Team.

June 2, 2023

Authored by: George Gonzales, MST and Brandon Vance, CPA

On May 25, 2023, Florida Gov. DeSantis signed a law creating the Farm Tax Exempt Agricultural Materials (TEAM) card for farmers. This card will replace exemption certificates for farmers. Instead of presenting an exemption certificate, farmers will be able to show vendors their TEAM Cards. Applications to obtain a TEAM Card will be made available on January 1, 2024.

If you have questions about whether your business can make purchases exempt from sales tax, please reach out to a member of the Withum SALT Team.

December 2, 2022

Authored by: Brandon Spinella and Bonnie Susmano, JD, MBA

Target Enterprise, Inc (TEI), a subsidiary of Target Corporation based in Minnesota, prevailed in its dispute with the Florida Department of Revenue over the Department’s $10M assessment of additional tax.Specifically, the trial court concurred with the taxpayer that most of its receipts should be sourced outside Florida. When calculating its corporate income tax liability for the years in question (2017, 2018, 2019), TEI attributed zero sales receipts to Florida since the costs to render services to its parent corporation were attributable to its employees in Minnesota. The Florida Department of Revenue (DOR) argued that it was required to attribute its service receipts to Florida based on the proportion of retail square footage of Target stores located in the state of Florida compared to Target’s retail square footage nationally. The court agreed with TEI, stating that TEI is a distinct legal entity separate and apart from Target, so it would be improper to combine Target’s activities in Florida with TEI’s activities. Furthermore, the court agreed with TEI that its income-producing activities occurred outside of Florida based on the location of TEI’s payroll.

If you have questions regarding how your business should be sourcing its income for State Income Tax Apportionment purposes, please contact a member of the Withum SALT Team.

November 11, 2022

Authored by: Brandon Vance, CPA and George Gonzales, MST

Effective November 9, 2022, purchases of ENERGY STAR appliances for noncommercial use are temporarily exempt from Florida Sales Tax from July 1, 2022, through June 30, 2023. Additionally, children’s diapers, baby and toddler apparel, shoes, and clothing are temporarily exempt from Florida sales tax from July 1, 2022, through June 30, 2023. Lastly, impact-resistant windows, impact-resistant doors, and impact-resistant garage doors are temporarily exempt from Florida sales tax from July 1, 2022, through June 30, 2024.

June 30, 2022

Specified public service employees will receive $50,000 added to their homestead property tax exemption on the assessed value within the $100,000 to $150,000 range. Public service employees include teachers, law enforcement officers, correctional officers, firefighters, EMTs, paramedics, child welfare service professionals, active members of the U.S. Armed Forces, and members of the Florida National Guard. The exemption does not apply to school district taxes. Individuals must be employed full-time on January 1 to qualify for the exemption. Qualified individuals must annually file an application before March 1 of the year the exemption is claimed.

February 4, 2022

Florida Counties may impose a discretionary sales surtax in addition to the state sales and use tax. County surtax is used to fund authorized projects. The surtax is limited to the first $5000 of sales price on the sale of tangible personal property. There is no surtax limitation on rentals or services. The Florida Department of Revenue recently issued guidance on the surtax limitation (Fla Dep’t of Revenue, Technical Assistance Advisement 21A-005). The Taxpayer, a general contractor, sold its customer concrete related to a construction project. For the $5000 surtax limitation to apply (i.e., only the first $5000 of the concrete would be subject to surtax), a taxpayer must pass the single sale test and the bulk sale/working unit test. To pass these tests, a taxpayer must show a single sale in which one purchaser buys all items in the same sales order, and if there are multiple items, they must be normally sold in bulk or assembled to be a working unit. In this instance, the Taxpayer had a purchase agreement for concrete materials; however, there were three change orders. Due to these three change orders, the Taxpayer failed the single sale test, and the total sale of concrete was taxable.

January 17, 2022

Florida’s corporate income tax collections significantly exceeded projections, triggering an automatic refund of the excess funds. Specifically, Florida’s corporate income and franchise tax returns for taxable years beginning April 1st, 2019, and before March 31st, 2020, are eligible for an automatic refund if these returns were filed on or before February 1st, 2022. For most, this is the return for the tax year ending December 31st, 2020.

The available refund is calculated based on the taxpayer’s final tax liability divided by the sum of all eligible taxpayer’s final tax liability reported on a return filed with the Florida Department of Revenue plus any Florida Tax Credit Scholarship Program credit taken. The partial refund will first be applied against any outstanding tax, penalty, or interest liability of the taxpayer. Any remaining refund of $10 or more post-offset will be refunded by May 1st, 2022. For amounts under $10, the Department will provide a payment credit on the taxpayer’s corporate income tax account.

September 23, 2021

The Florida Department of Revenue (FDOR) recently issued guidance that the Florida corporate income/franchise tax rate has been reduced to 3.535% from 4.458% starting January 1, 2021, but before January 1, 2022. On or after January 1, 2022, the tax rate will return to 5.5%.

For 2022 estimated tax payments, interest and penalties are not imposed on payments that meet:

Since the 2022 corporate income tax rate reverts to 5.5%, the prior year exception for tax years beginning with the 2022 calendar year is based on the tax due from the preceding year’s income using the 5.5% tax rate. Therefore, FDOR advises taxpayers to recompute the prior year’s tax due using a 5.5% tax rate to determine the installment required for meeting the previous year’s exception for 2022 state corporate income tax estimated tax payments. (see Tax Information Publication 21C01-02, Fla. Dept. of Rev. (9/14/21).

June 18, 2021

The Florida Department of Revenue has issued an updated version of its brochure on the collection of sales and use tax on transient accommodations. The document explains: (1) which types of rental accommodations are subject to tax and which are exempt; (2) how to register to collect sales tax; (3) who must register to collect sales tax; (4) the taxation of trailer camps, recreational vehicle and mobile home parks; and (5) filing, reporting and remitting procedures. For specific information, please see GT-800034: Sales and Use Tax on Rental of Living or Sleeping Accommodations, Fla. Dept. of Rev., 05/01/2021.

June 9, 2021

During this sales tax holiday period, admissions to music events, sporting events, cultural events, specified performances, movies, museums, state parks, and fitness facilities are exempt from sales tax. Also exempt from sales tax during this holiday period are qualifying boating and water activity supplies, camping supplies, fishing supplies, general outdoor supplies, and sports equipment. The sales tax holiday does not apply to (i) the rental or repair of any of the qualifying items listed below, and (ii) sales in a theme park, entertainment complex, public lodging establishment, or airport. For more information, please see Florida Tax Information Publication #21A01-05.

May 26, 2021

Florida Governor Ron DeSantis has signed an omnibus tax bill that: authorizes three sales tax holidays; creates a sales tax exemption for independent living items for seniors; specifies that forwarding agents are dealers for purposes of the sales and use tax; creates the Strong Families Tax Credit Program, which provides a credit against the corporate income tax, insurance tax, severance taxes, alcoholic beverage taxes or the self-accrued sales tax liability of direct pay permit holders for businesses that make monetary donations to certain eligible charitable organizations that provide services focused on child welfare and well-being; creates a tax credit for businesses that employ student interns; requires tax collectors to accept late payments on the first installment of prepaid property taxes, and removes the late payment penalty for those payments; doubles the property tax exemption for certain affordable housing properties from 50% to 100%; provides an exemption for property owned by a house of public worship and used by an educational institution for educational purposes limited to students in preschool through grade 8; and provides that certain modifications to documents to update an interest rate are not subject to the documentary stamp tax.For specific text of the bill, please see L. 2021, H7061, effective July 1, 2021.

May 21, 2021

Beginning July 1, 2021, persons not located in Florida who make a substantial number of remote sales for delivery into Florida are required to register with the Florida Department of Revenue and collect and remit tax. A “substantial number of remote sales” is any number of taxable remote sales in the previous calendar year in which the sum of the total sales exceeds $100,000. A “remote sale” is the retail sale of tangible personal property ordered by mail, telephone, the internet, or other communication, from a person who receives the order outside Florida and causes the property to be transported into Florida. Further, effective July 1, 2021, marketplace providers who have a physical presence in Florida or who make or facilitate a substantial number of remote sales through a marketplace, are required to register with the Department and collect and remit tax. For specific information on these registration requirements, as well as the definition of “marketplace” and “marketplace provider,” please see Florida TIP #21A01-03 (5/14/2021).

May 13, 2021

The Florida Department of Revenue has issued an updated version of its Sales and Use Tax Brochure. The document explains: (1) when sales tax, use tax, and discretionary sales surtax are imposed, the rates, and due dates; (2) who must register to collect tax and who is exempt; (3) how to apply the bracket system; (4) how to register to collect sales tax; and (5) collection procedures. The newest publication includes the new rate for rentals of commercial property. For further information, please consult GT-800013: Florida’s Sales and Use Tax, Fla. Dept. of Rev., 03/01/2021.

May 5, 2021

The Florida Department of Taxation recently issued sales and use tax applicable to concession stands (GT-800003). Sales of food, drinks, tobacco products, and other items with a sales price of 10 cents or more are taxable when made from concession stands at arenas, auditoriums, carnivals, fairs, stadiums, theaters, street corners, and other similar places. For example, sales of food and beverages made at hot dog, ice cream, yogurt, or snow cone stands, and sales of tobacco products at tobacco stands are taxable. Sales of food, drinks, and other items sold at fundraisers and similar events, including those sold by nonprofit organizations that hold a valid Florida Consumer’s Certificate of Exemption (Form DR-14), are taxable unless specifically exempt. Any person selling taxable items from a concession stand, and any person who rents, leases, or grants a license to others to use real property to operate a concession stand, must register as a dealer to collect and report sales tax.

April 28, 2021

Florida Governor Ron DeSantis has signed legislation requiring marketplace providers and out-of-state retailers with no physical presence in Florida to collect sales tax on sales of taxable items delivered to purchasers in Florida, if the marketplace provider or out-of-state retailer make sales exceeding $100,000 during the previous calendar year. Every person making a substantial number of remote sales is a “dealer” required to register to collect sales and use tax. “Dealer” includes a retailer who transacts a substantial number of remote sales or a marketplace provider that has a physical presence in Florida or that makes or facilitates through its marketplace a substantial number of remote sales. “Retail sale” for purposes of the sales and use tax is amended to include sales facilitated through a marketplace. For further details, please see S.B. 50, enacted 04/19/21.

Also of note as part of S.B. 50 (the remote seller bill referenced above) is a provision whereby two months after the Florida Unemployment Compensation Trust Fund reaches $4.07 billion, the state sales tax rate on the rental or license fee for use of real property in Florida will be reduced from 5.5% to 2% underFla. Stat.§ 212.031. This is potentially significant in that Florida sales tax (plus any applicable discretionary local sales surtax) is due on the total rent charged for renting, leasing, or granting a license to use commercial real property in Florida (unless the rent is specifically exempt). Some examples of taxable commercial real property rentals include commercial office or retail space, warehouses, convention and meeting rooms, and self-storage units or mini-warehouses.

Effective July 1, 2021, businesses that collect and remit Florida sales and use tax must round sales tax due on a transaction, rather than using the “bracket system” that was previously in place. The computation of sales tax due must be carried to the third decimal place; if the third decimal place is greater than four (4), the tax must be rounded up to the next cent. Businesses may apply rounding to the aggregate amount of tax due on an invoice, or to the taxable amount on each individual item on the invoice. Businesses have until September 30, 2021 to update their point of sale systems accordingly.

April 14, 2021

April 1, 2021

Based on individual facts and circumstances, the Florida Department of Revenue will work with taxpayers who are unable to file tax returns by the required due date as a result of winter storms in Louisiana, Oklahoma and Texas. Filing deadlines for taxpayers who are able to file will not change. Florida corporate income/franchise tax returns originally due, or due on extension, between February 11, 2021 and June 15, 2021 are now due June 30, 2021. Taxpayers needing assistance should contact the Department to discuss their individual situations.

March 8, 2021

On Thursday, March 4th, the Florida’s Senate Bill 50 was unanimously passed by the Committee on Appropriations and is expected to move to the full Senate floor for consideration in regards to marketplace facilitators and remote sellers in Florida. The bill introduces the new requirement of remote sellers to register with the department and begin to collect and remit tax if, during the 2020 calendar year, they have had $100,000 or more in sales into the state of Florida. If the bill is enacted, the requirement will take effect July 1, 2021.

The bill includes amendments to include tax, interest, and penalty relief for Florida customers, marketplaces and dealers from outside of Florida before the effective date of the bill unless under audit or a tax bill has been received. State provisions allowing the Florida tax department to waive local options surtax for purchases of items by residents in other states that are transported into Florida would remain the same. If the bill is passed, marketplace facilitators will also be required to start collecting and remitting other state taxes such as the emergency 911 fee, waste tire fee, and lead-acid battery fee effective April 1, 2022.

After the Wayfair decision, Florida is currently one of two remaining states that have not adopted requirements for remote sellers to collect and remit sales and use taxes. Florida is also one of three states that currently do not have marketplace facilitator laws in effect.

March 3, 2021

Proposed Florida bill would require out-of-state sellers with $100,000 in annual taxable sales in Florida to collect and remit sales tax. Also impacted would be marketplace providers and large e-commerce platforms such as Amazon, who would similarly be required to collect and remit taxes on behalf of online retailers using their platforms.

April 28, 2020

The Florida Department of Revenue has issued Emergency Order 20-52-DOR-003 which extends the original filing and payment due dates for corporate returns as follows:
Corporate Taxpayers with a Fiscal Year Ending December 31, 2019:

Corporate Taxpayers with a Fiscal Year Ending January 31, 2020:

Corporate Taxpayers with a Fiscal Year Ending February 29, 2020:

April 1, 2020

The property tax payment deadline has been extended to March 31, 2020. Property tax returns for railroad, railroad terminal, private car, freight line and equipment company property has been extended to from April 1, 2020 to April 15.

March 2020

Florida once again in a new ruling determined that market-based sourcing was more appropriate for a technology-based company that provides a platform for developers to create and sell software apps. See FL TAA No. 20C1-001. The state continues to interpret that its statute for the sourcing sales of an “income-producing activity” occurred where the customer is located, opposed to where the company incurred costs to deliver the services. There has been a number of rulings in the last many years in FL that have made similar determinations across a number of service industries, and we are continuing to monitor to see if at some point this is challenged and overturned.

November 2019

Beginning on or after January 1, 2020, the Florida sales tax rate imposed on the total rent charged for either renting, leasing, letting, or granting a license to use real property is decreased to 5.5%. Examples of real property rentals subject to tax include commercial office or retail space, warehouses, and self-storage units or mini-warehouses. The local option discretionary sales surtax continues to apply to the total rent charged by the county where the property is situated. Regardless of when rent is actually paid, sales tax is due at the rate in effect during the time the tenant occupies or is entitled to occupy the real property. (Florida Tax Information Publication No. 19A01-11, 10/30/2019.)