Taxes

Sales and Use Tax Exemptions | Sales Tax | FL Corporate Income Tax | Homestead Exemption | Ad Valorem | IPPT | Communications Tax | Tax Table | Fire Protection Services Assessment

Florida has a variety of advantages that make it a profitable site for nearly every type of business. Progressive legislation continues to ensure that Florida will remain a magnet for new and expanding businesses.

  • NO corporate income tax on limited partnerships
  • NO corporate income tax on subchapter S-corporations
  • NO state personal income tax, guaranteed by constitutional provision
  • NO corporate franchise tax on capital stock
  • NO state-level property tax assessed
  • NO property tax on business inventories
  • NO property tax on goods-in-transit for up to 180 days
  • NO sales and use tax on goods manufactured or produced in Florida for export outside the state
  • NO sales tax on purchases of raw materials incorporated in a final product for resale, including non-reusable containers or packaging
  • NO sales and use tax on co-generation of electricity

FloridaTaxAdvantages

Sales & Use Tax Exemption

  • Machinery and equipment used by a new or expanding Florida business to manufacture, produce or process tangible personal property for sale
  • Labor, parts and materials used in repair of and incorporated into machinery and equipment
  • Electricity used in the manufacturing process
  • Certain boiler fuels (including natural gas) used in the manufacturing process
  • Semiconductor, defense and space technology-based industry transactions involving manufacturing equipment
  • Machinery and equipment used predominantly in research and development (effective July 1, 2006)
  • Labor component of research and development expenditures
  • Commercial space activity — launch vehicles, payloads and fuel, machinery and equipment for production
  • Aircraft parts, modification, maintenance and repair, sale or lease of qualified aircraft
  • Production companies engaged in Florida in the production of motion pictures, made for television motion pictures, television series, commercial advertisements, music videos or sound recordings

Sales Tax

Florida law provides that each sale, admission charge, storage, or rental is taxable unless the transaction is specifically exempt. Florida’s general sales tax rate is 6%, however there is an established “bracket system” for collecting sales tax on any part of each total taxable sale that is less than a whole dollar amount. Additionally, Polk County has a discretionary sales surtax of 1%. To compute the Florida sales tax rate for Polk County, you add the county imposed discretionary sales surtax rate (1%) to the general sales and use tax rate (6%) for a total of 7% in Polk County.

Polk County saw a .5% increase January 2004 for new school construction. An additional .5% increase was effective January 2005 to address indigent health care in Polk County. These two increases combined brought the total surtax rate to 1%.

DiscretionarySalesSurtaxInformation

 

Florida Corporate Income Tax

Tax Base and Rate

Florida corporate income tax liability is computed using federal taxable income, modified by certain Florida adjustments, to determine adjusted federal income.

  • A corporation doing business within and without Florida may apportion its total income. Adjusted federal income is apportioned to Florida using a three-factor formula. The formula is a weighted average, designating 25 percent each to factors for property and payroll, and 50 percent to sales.
  • Nonbusiness income allocated to Florida is added to the Florida portion of adjusted federal income.
  • An exemption of up to $5,000 is subtracted to arrive at Florida net income.
  • Tax is computed by multiplying Florida net income by 5.5 percent.

Source: Department of Revenue; www.myflorida.com

Homestead Exemption

Florida law provides a $25,000 homestead exemption on ad valorem taxes covering property owned and permanently lived in by a Florida resident. This means that the first $25,000 of the assessed value of homesteads shall be exempt from ad valorem taxes, provided the individual meets the qualifications and makes applications prior to March 1. An additional homestead exemption went into effect January 2008.

What is the additional homestead exemption?
The Additional Homestead Exemption (AHE) increases the homestead exemption by exempting the assessed value between $50,000 and $75,000. This exemption does not apply to school district taxes. This means, that you will receive NO BENEFIT from the AHE if your assessed value is less than $50,000. You will, however continue to receive your existing homestead exemption.

When does the additional homestead exemption take affect?
The homestead exemption is retroactive to January 1, 2008

Do I need to apply for this additional exemption?
No, if you have an existing homestead exemption, the additional exemption will be applied automatically. This is also true if you are filing a new homestead exemption application for 2011.

Source: www.polkpa.org; 2013

PolkHomesteadExemption

Ad Valorem

The Tax Collector & The Property Taxation Process

The Tax Collector collects all ad valorem taxes levied in Polk County. The Tax Collector also collects non-ad valorem assessments.

Ad valorem taxes are levied annually based on the value of real property and tangible personal property. Ad valorem assessments are made each January 1st. Real property is defined as land, buildings, fixtures, and all other improvements to the land.

Non-ad valorem assessments are also made on real property for essential services, such as fire protection and garbage collection.

The ad valorem tax roll is certified to the Tax Collector by the Property Appraiser. The Property Appraiser determines the assessed value of property.

The County Commission, School Board, municipalities, and other ad valorem taxing bodies set the millage rates for properties within their boundaries. The millage rate is the dollar amount to be paid in taxes for every $1,000 of appraised valuation.

Example: If the taxable value of your home is $75,000 and your city’s millage rate is 7.2 mills, then the taxes due would be calculated as follows:

Taxable Home Value of $75,000 1,000 = 75

75 x 7.2 mills = $540 in City Taxes Due

Non-ad valorem assessment rolls are certified to the Tax Collector by local governing boards or non-ad valorem assessing authorities, such as the Solid Waste Authority, fire district and water control districts.

The Tax Collector consolidates the certified ad valorem and non-ad valorem tax rolls and mails tax notices to property owners. Ad valorem taxes and non-ad valorem assessments are due beginning November 1st or soon after the tax roll is certified.

Tax notices are mailed October 31st. Florida law makes taxpayers responsible for knowing that their property taxes are due each year. Ad valorem taxes and non-ad valorem assessments become delinquent on April 1st.

A Model Property Tax System “Checks and balances protects taxpayers!”

Floridians have established a property tax system that incorporates a structure of checks and balances to protect taxpayers from favoritism, abuse and corruption.

Under this system, three distinct and separate functions are established:

  • Levy Of Taxes
  • Appraisal Of Property
  • Collection Of Taxes

The levying of property taxes is performed by the various taxing authorities, such as the county commission, a municipality, or school board, etc. The taxing authority determines the millage rate (rate of taxes), which are applied to your property.

The appraisal of property is performed by the Property Appraiser, who is responsible for determining the value of your property (including exemptions).

Finally, the system of checks and balances is completed by the collection of property taxes, which is performed by the Tax Collector. The Tax Collector obtains the taxing authority’s millage rate and the appraised value of your property as determined by the Property Appraiser. After processing this information, the tax collector mails out tax bills, then collects and distributes the property taxes due.

Since the essential elements of our property tax system are governed by separate and independent governmental entities, there is in place a basic framework of safeguards to help insure the public trust.

Source: www.polktaxes.com; 2013

Intangible Personal Property Tax (IPPT)

Beginning January 1, 2007, individuals, married couples, personal representatives of estates, and businesses are no longer required to file an annual intangible personal property tax return reporting their stocks, bonds, mutual funds, money market funds, shares of business trusts, and unsecured notes. The Legislature has repealed the annual tax on these properties.

The last annual intangible tax return that these taxpayers were required to file was the 2006 return that was due by June 30, 2006. Any intangible taxes owed to the State for that return or prior years are still due.

Not all intangible taxes have been repealed. The intangible tax on leases of government-owned real property and the one-time intangible tax on notes secured by a mortgage on Florida real property are still in effect.

Source: Department of Revenue, www.myflorida.com; 2013

Communications Tax

Communications services include telecommunications, cable, direct-to-home satellite, and related services. This definition includes voice, data, audio, video, or any other information or signals, including cable services, transmitted by any medium.

Some examples of services subject to the tax are:

  • Local, long distance, and toll telephone
  • Cable television
  • Direct-to-home satellite
  • Mobile communications, including detailed billing charges
  • Private line services
  • Pager and beeper
  • Telephone charges made by a hotel or motel
  • Facsimiles (FAX), when not provided in the course of professional or advertising service
  • Telex, telegram, and teletype

Tax Rates

Florida Portion

The Florida portion of the tax includes a state tax rate plus a gross receipts tax rate, for a combined rate of 9.17 percent. The rate for the state tax is 6.65 percent. The total rate for the gross receipts tax is 2.52 percent, which is composed of .15 percent and 2.37 percent.

Dealers may bill and collect the 6.65 percent state tax rate along with the .15 percent gross receipts tax rate (a total of 6.8 percent) provided the amounts are properly reflected on the tax return.

Local Portion

Each local taxing jurisdiction (municipality, charter county, or unincorporated county) has a specific local tax rate. A list of all the current and past local jurisdictional rates is on our Internet site. For a list of current local rates only, download the Jurisdiction Rate Table.

Direct-to-home satellite service is taxed at a state rate of 10.8 percent plus 2.37 percent gross receipts tax for a total of 13.17 percent. Local tax does not apply to these services.

What is Exempt?

Dealers should not collect taxes on exempt sales of communications services. Exempt sales include:

  • sales for resale
  • sales to Federal agencies, the state, any county or municipality, or other political subdivision;
  • sales to religious and educational organizations with 501(c)(3), I.R.C. status;
  • sales to homes for the aged with 501(c)(3), I.R.C. status and that meet certain provisions.

Source: Department of Revenue, www.myflorida.com; 2013

Tax Table

Florida Tax

Corporate Income Tax 5.5%
Sales Tax 6.0%
Gross Receipt Tax 2.52%
Unemployment Tax (varies) 2.7%
Communication Services Tax 6.65%
Intangible Tax 1 mill per $1000 of assessed valuation

Unemployment Tax – Only taxable wages that are reported by the end of the quarter immediately preceding the quarter for which the rate is calculated can be used in the tax rate calculation. When a new employer becomes liable for the payment of tax, the tax rate is .0270 (2.7 percent) and will remain that until the employer has reported for 10 quarters (11 quarters in some cases). The account will then be rated by dividing the total benefits charged to the account (6 quarters) by the taxable payroll reported for the first 7 of the last 9 quarters immediately preceding the quarter for which the rate is effective. The one exception would be those employers liable by succession and who choose to accept the tax rate of the predecessor with the accompanying responsibility of paying any outstanding indebtedness due. At that time, a tax rate will be calculated based on the employment record and the rating factors, which are built into the Unemployment Compensation Law. The maximum tax rate allowed by law is .0540 (5.4 percent), except for employers participating in the Short Time Compensation Program. Prior to the applicable year, rate notices are mailed to all employers that have a tax rate. An appeal of the tax rate must be made within 20 days from the date of notification (date printed on the rate notice).

Florida Communications Service Tax – The Florida portion of the tax includes a state tax rate plus a gross receipts tax rate, for a combined rate of 9.17 percent. The rate for the state tax is 6.65 percent. The total rate for the gross receipts tax is 2.52 percent, which is composed of .15 percent and 2.37 percent.

Dealers may bill and collect the 6.65 percent state tax rate along with the .15 percent gross receipts tax rate (a total of 6.8 percent) provided the amounts are properly reflected on the tax return.

Local Portion

Each local taxing jurisdiction (municipality, charter county, or unincorporated county) has a specific local tax rate. A list of all the current and past local jurisdictional rates is on our Internet site. For a list of current local rates only, download the Jurisdiction Rate Table.

Direct-to-home satellite service is taxed at a state rate of 10.8 percent plus 2.37 percent gross receipts tax for a total of 13.17 percent. Local tax does not apply to these services.

Source: Florida Department of Revenue, 2013.

Fire Protection Services Assessment

In December 2013, city commissioners in Haines City unanimously voted to implement the fire assessment fee, making property owners pay a flat rate of $145, plus 85 cents for every $1,000 in relative value of improvements. Read more.