Florida Sales and Use Tax Attorney | Florida Sales Tax Lawyer | Florida State and Local Tax Lawyer

Florida's sales tax laws are designed to ensure that every individual or entity engaging in the retail sale of tangible personal property contributes to the state’s tax base. Retailers are required to collect and remit sales tax on items sold to consumers, making them a key component of Florida's tax enforcement efforts. The Florida Department of Revenue (FDOR) frequently conducts audits of businesses to verify compliance with these tax obligations. These audits are most commonly aimed at ensuring accurate reporting and remittance of sales tax on tangible personal property, as this represents one of the state’s primary revenue sources.

However, Florida’s sales tax laws extend beyond tangible goods to encompass certain taxable services, further broadening the scope of transactions subject to taxation. While not all services are taxable, those specifically outlined in the statutes, such as commercial cleaning, pest control, and security services, are subject to the same compliance and enforcement measures as tangible personal property. Businesses offering these services must maintain detailed records of taxable transactions and properly collect and remit sales tax to avoid penalties during an audit. 

• If you are not sure whether your business activities or products are subject to sales and use tax in Florida, below is an idea of the types of transactions that are taxable and require registering with the Florida Department of Revenue:
  
  Sales of taxable items at retail
• Repairs or alterations of tangible personal property
• Rentals, leases, or licenses to use real property (for example: commercial office space or mini-warehouses)
• Rentals of short-term living accommodations (for example: motel/hotel rooms, beach houses, condominiums, timeshare resorts, vacation houses, or travel parks)
• Rentals or leases of personal property (for example: vehicles, machinery, equipment, or other goods)
• Charges for admission to any place of amusement, sport, or recreation
• Manufacturing or producing goods for retail sales
• Selling service warranty contracts
• Operating vending or amusement machines
• Providing taxable services (for example: investigative and crime protection services, interior nonresidential cleaning services, or nonresidential pest control services)
• Out-of-state businesses selling into Florida that have any number of transactions with total sales over $100,000 in the prior calendar year
• Marketplace providers facilitating remote sales into Florida

Florida sales tax applies to services under two specific conditions. The first condition is when the service itself is explicitly identified as taxable under Florida law. Examples of such services include commercial cleaning services, pest control services, detective and investigative services, and various types of security services, such as armed guard or patrol services. These services are clearly outlined in the statutes and are subject to sales tax regardless of whether they involve the sale of tangible goods.

The second condition occurs when a service is sold in conjunction with tangible personal property. In these cases, the entire transaction may become taxable, depending on how the service and the property are packaged or delivered. For instance, if a business provides a service that involves the sale or transfer of taxable goods—such as repairing equipment with replacement parts included—the combined cost of the parts and the labor may be subject to sales tax. Similarly, services that are an inseparable part of delivering a taxable good, like assembling furniture after purchase, may also be taxable.

Use tax serves as a complementary tax to sales tax, ensuring that tax is collected on the use, consumption, or storage of taxable items and services within Florida when sales tax was not collected at the time of purchase. The key distinction between sales tax and use tax lies in their point of application: sales tax is imposed at the time of a transaction, whereas use tax applies when taxable goods or services are used or consumed, and no sales tax has been paid. This ensures tax compliance and prevents individuals or businesses from evading taxes by purchasing items tax-free from out-of-state vendors or other sources. Florida’s use tax laws explicitly state that tax is due on the use, consumption, or storage of any tangible personal property or taxable service within the state. Additionally, use tax may also apply to rental payments for real property and common area maintenance charges, extending its reach to ensure equitable tax treatment for all taxable transactions. By addressing scenarios where sales tax collection is bypassed, use tax plays a vital role in maintaining the integrity of Florida’s tax system.

Businesses must register for sales tax in Florida by filling out a Florida Business Tax Application. The Florida Department of Revenue offers an online Florida Business Tax Application equipped with an interactive wizard designed to streamline the process of determining tax registration requirements. Submitting the application electronically provides several benefits, including the ability to retain a record of the submission, autofill certain fields, and easily access the assigned registration certificate number. Alternatively, businesses can complete and submit a paper version of the Florida Business Tax Application (Form DR-1). With the Florida Business Tax Application, businesses can register for a range of taxes and fees in addition to Sales and Use tax, including Communication Services Tax, Documentary Stamp Tax, Gross Receipts Tax on Dry-Cleaning, Gross Receipts Tax on Utility Services, Lead-Acid Battery Fee, Miami-Dade County Lake Belt Fees, New Tire Fee, Prepaid Wireless Fee, Reemployment Tax (Unemployment), Rental Car Surcharge, and Severance Taxes. 

Effective July 1, 2021, Florida law requires businesses making remote sales into the state to collect and electronically remit sales and use tax, including any applicable discretionary sales surtax, on those transactions if the business has made taxable remote sales in excess of $100,000 over the previous calendar year. Additionally, effective July 1, 2021, marketplace providers are required to register to collect and electronically remit sales and use tax on taxable sales they facilitate for marketplace sellers for delivery into Florida.

If you hold an active certificate of registration or reemployment tax account issued by the Department because you previously submitted a Florida Business Tax Application (Form DR-1), use the Application for Registered Businesses to Add a New Florida Location (Form DR-1A ) to register:

• An additional business location or Florida rental property, or
• A registered location that has moved from one Florida county to another.

For more information on submitting an application, see Registering Your Business (Form DR-1N ).

Once registered, you will be sent a Certificate of Registration (Form DR-11), a Florida Annual Resale Certificate for Sales Tax (Form DR-13), and tax return forms. If you are registered to pay use tax only, you will not receive a resale certificate. The Certificate of Registration must be displayed in a clearly visible place at your business location.

When to Notify the Department

You must notify the Florida Department of Revenue if you:

• Change your business name;
• Change your mailing address;
• Change your location address within the same county;
• Close or sell your business; or
• Your business becomes active and you will sell or rent taxable property or services.

The quickest way to notify the Department of these changes is to update your account online.

When to Submit a New Tax Application

You must submit a new registration using the online registration system or complete a paper Florida Business Tax Application (Form DR-1 ) if you:

• Change your legal entity; or
• Change the ownership of your business.

Here are some tips for filing your Florida sales tax return:

• File on time for each reporting period even if no tax is due. Don't skip reporting periods or add a partial reporting period to the next return.
• Sign up to receive due date reminder emails every reporting period. These emails are a convenient resource to help you meet your filing obligation.
• Sales reported on lines A through E of the Sales and Use Tax Return (Form DR-15 ) may have different tax rates. Enter your transactions on the right lines so no additional tax will be due.
• Compute the correct sales tax, including discretionary sales surtax (county tax), if any.
• Complete all information on your return, including front and back. Be sure to include your signature and your preparer's signature.
• If you are reporting discretionary sales surtax (county tax) collected, you must complete the back of your return. Need more information? Take our tutorial How to Calculate, Collect, and Report Your Discretionary Sales Surtax.
• Don't include tax collected in gross sales. If you include the tax collected in gross sales, it will increase the amount of tax due and you will receive a bill for additional tax due.
• When you electronically file and pay on time, you may take a collection allowance. Be sure to calculate it correctly. The collection allowance is 2.5% (.025) of the first $1,200 of tax due, not to exceed $30 for each reporting location. If you have less than $1,200 in tax due, your collection allowance will be less than $30.

Florida’s nexus thresholds and rules determine when a business must collect and remit sales tax to the state. Nexus refers to the connection between a business and the state that triggers tax collection obligations. In Florida, nexus can be established through physical presence, economic activity, or agency relationships.

Physical presence nexus is created when a business has a tangible connection to Florida. This includes operating a physical office, store, or warehouse in the state, employing workers or independent contractors in Florida, or storing inventory in the state, including in third-party warehouses like Amazon fulfillment centers. Any business with a physical presence in Florida is required to register with the Florida Department of Revenue to collect and remit sales tax.

Florida also adopted economic nexus rules effective July 1, 2021, following the U.S. Supreme Court’s decision in South Dakota v. Wayfair, Inc.. These rules require out-of-state sellers to collect and remit sales tax if they have $100,000 or more in taxable remote sales to Florida customers in the previous calendar year. Once a business exceeds this threshold, it must register with the Florida Department of Revenue and begin collecting sales tax on all taxable sales to Florida customers.

Examples of Taxable Remote Sales are:

• Purchases made through the internet
• Mail-order catalog purchases
• Purchases made in another country
• Furniture purchased from dealers located in another state
• Computer equipment ordered from out-of-state vendors advertising in magazines

Many out-of-state businesses, such as large internet retailers, already collected and remitted sales and use taxes to the Florida Department of Revenue prior to passage of Chapter 2021-2, Laws of Florida.

Additionally, effective July 1, 2021, marketplace providers are required to electronically register to collect and electronically remit sales and use tax on taxable sales they facilitate for marketplace sellers for delivery into Florida. A separate electronic registration application is required for each place of business located within Florida. Out-of-state businesses can submit one application for all out-of-state locations. The information required in this electronic application is provided in the Florida Business Tax Application for Marketplace Providers and Remote Sales (DR-1MP).

For additional information on remote sales, review Tax Information Publication (TIP) #21A01-03, “New Registration Requirement for Persons Making Remote Sales and for Marketplace Providers and Sellers.”