Florida Tax Guide 2026

TaxKiln Editorial · Last reviewed: May 25, 2026

Florida has no personal income tax — explicitly prohibited by Article VII, Section 5 of the Florida Constitution. C-corporations pay 5.5% on Florida net income (S-corps and LLCs are pass-throughs with no entity-level Florida tax). Sales tax is 6% state + up to 2.5% county discretionary surtax. Property tax is moderate (~0.82% effective average) and homesteaded property is protected from assessment increases above 3%/year by Save Our Homes.

Constitutional prohibition on income tax

Article VII §5 of the Florida Constitution prohibits the state from imposing a tax on personal income, on intangibles owned by Florida residents, and limits property tax to local-government use. Changing this requires constitutional amendment via citizen initiative or legislative referral, with 60% voter approval. Politically inert — Florida's no-income-tax status has been a core economic-development brand since the 1924 constitutional amendment.

Florida Corporate Income Tax (C-corps only)

Florida taxes C-corporations at 5.5% of Florida-apportioned net income (Florida Statutes §220.11). The first $50,000 is exempt. Apportionment uses a three-factor formula weighted toward sales (single-sales-factor for some industries). S-corporations and LLCs taxed as partnerships are NOT subject to Florida CIT — Florida does not impose a pass-through entity tax. Federal pass-through income flows to owners who, if Florida residents, pay no state tax on it.

Sales tax

State rate: 6%. Counties may add a discretionary sales surtax (0.5% to 2.5%, varies by county). The discretionary surtax applies only to the first $5,000 of each single transaction. Representative combined rates: Miami-Dade 7%, Orlando (Orange) 6.5%, Tampa (Hillsborough) 7.5%, Jacksonville (Duval) 7.5%. Economic nexus threshold for remote sellers: $100,000 of FL sales (no transaction count).

Property tax and Save Our Homes

Local governments (counties, school districts, cities, special districts) set millage rates. Statewide effective average ~0.82% — moderate. The homestead exemption removes $50,000 of assessed value ($25k for school taxes); additional exemptions for seniors, veterans, disability. Save Our Homes (Art. VII §4(d)) caps annual assessment increase on homesteaded property at 3% or the CPI, whichever is less. Non-homestead property is capped at 10%/year. Effect: long-held primary residences accrue a substantial 'SOH differential' — assessment far below market — that resets on sale.

No local income tax

No Florida city or county levies a personal or corporate income tax. Local revenue is property tax + sales surtax + tourist development tax (hotel bed tax) + impact fees + utility franchise fees. Wage earners and self-employed file no city or county income return.

Self-employed considerations

No personal income tax means no Schedule C-style state filing for sole proprietors. LLC formation is $125 (Sunbiz Articles of Organization); $138.75 annual report. No franchise tax, no minimum entity fee. The state's friendliness to small operators is meaningful — only sales tax compliance creates ongoing state interaction for service-based sole proprietors. Professional licensing (DBPR for contractors, real-estate, cosmetology; DOH for medical) is required for regulated trades; municipal business tax receipts (formerly 'occupational licenses') are required by most cities and counties.

Residency — the snowbird audit problem

Florida itself doesn't audit residency claims (no income tax to recover). But the high-tax states people leave from — NY, NJ, MA, CT, IL — DO audit aggressively. Establishing FL domicile requires: • Declaration of Domicile filed with the county clerk • FL driver's license + vehicle registration • Voter registration • Spend >183 days in FL • Sever or document attenuation of high-tax-state ties (sell or rent home, change doctors, move social ties) NY's audit posture treats anything less than a clean break as continued NY residency. The Declaration of Domicile alone is not sufficient — high-tax states look at substance.

Estate planning advantages

No state estate tax. No state inheritance tax. No state gift tax. Florida's homestead has unlimited acreage protection from creditors (Art. X §4) for primary residence — making it a high-asset-protection jurisdiction. Tenancy by the entirety for married couples protects jointly-titled property from individual-spouse creditors. Combined with federal $15M permanent exemption (OBBBA), Florida is among the friendliest states for high-net-worth estate planning.

Worked example: Carmen Velazquez, real-estate agent (Naples, FL, single)

Carmen's 1099 commissions for 2026: $245,000. She operates as a single-member LLC. Florida-source income only.

Federal: Schedule C income $245,000. SE tax: ~$26,000 Federal income tax: depending on deductions, ~$48,000 Florida state tax: Personal income tax: $0 (no PIT) LLC entity tax: $0 (no Florida tax on pass-through entities) Annual report fee: $138.75 Sales tax: typically not applicable to real estate commissions Municipal business tax: ~$50–$200 depending on city Total Florida tax burden: ~$200/year of administrative fees. Comparison to her prior NY (Brooklyn) burden on same income: NY state ~$15,400 + NYC ~$9,200 = ~$24,600. Florida relocation saves Carmen ~$24,400/year, before property tax differences are netted.

Statute references

Constitutional prohibition on personal income tax — Fla. Const. Art. VII §5
Florida Corporate Income Tax — Fla. Stat. §220.11
Sales and use tax — Fla. Stat. §§212.05, 212.054 (discretionary surtax)
Save Our Homes property cap — Fla. Const. Art. VII §4(d)
Homestead creditor protection — Fla. Const. Art. X §4
Marketplace facilitator sales tax — Fla. Stat. §212.05965

Last reviewed: May 25, 2026