Sales Tax Fundamentals
Get up to speed on the basics of sales tax
Do you need to collect sales tax in Florida?
You’ll need to collect sales tax in Florida if you have nexus there. There are two ways that sellers can be tied to a state when it comes to nexus: physical or economic. Physical nexus means having enough tangible presence or activity in a state to merit paying sales tax in that state. Economic nexus means passing a states’ economic threshold for total revenue or the number of transactions in that state.
Do you have physical nexus in Florida?
Florida considers a seller to have sales tax nexus if you have any of the following in the state:
- Ownership of property in the state.
- Sales of taxable items at retail.
- An employee present in the state.
- Repairs or alterations of tangible personal property.
- Rentals, leases, or licenses to use real property
- Rentals of short-term living accommodations
- Rental or lease of personal property
- Manufacturing or producing goods for sale at retail.
- Importing goods from any state or foreign country, for sale at retail or for use in the business or for pleasure.
- Providing taxable services (for example, investigative and crime protection services, interior nonresidential cleaning services, and nonresidential pest control services).
For tax information directly from the source, read exactly what the Florida Department of Revenue (Florida’s taxing authority) has to say about what constitutes sales tax nexus.
Do you have economic nexus in Florida?
Effective July 1, 2021, Florida considers vendors who make $100,000 in revenue from buyers in the state in the previous calendar year (excluding marketplace sales for individual sellers) to have economic nexus. As a result, vendors are obligated to collect sales tax from buyers in the state. You can read Florida’s economic nexus guidance for sellers here and you can read more about economic nexus in every state here.
Is what you’re selling taxable?
Services in Florida are generally not taxable. However, if the service you provide includes creating or repairing a product, you may have to deal with the sales tax on products.
Tangible products are taxable in Florida, with a few exceptions. These exceptions include groceries, some medicine and common household remedies, seeds and fertilizer, and prosthetic or orthopedic instruments.
Is SaaS taxable in Florida?
SaaS is non-taxable in Florida. (Source)
What is use tax?
The Florida Department of Revenue says use tax must be paid by consumers for taxable goods or services when sales tax was not paid at the time of purchase. This applies to taxable items bought in the state where the consumer was not charged sales tax and for taxable items delivered into the state where sales tax was not paid. Use tax is also due on tax-exempt items that the purchaser intended to resell, but later was used for business or personal use.
What is discretionary sales surtax?
If an item is subject to sales or use tax, it may also be eligible for a discretionary sales surtax, or county tax. The rate is dependent on which county the good or service was delivered into, and the type of taxable item or service.
Many Florida counties have a discretionary sales surtax (county tax) that applies to most transactions subject to the sales or use tax. The county surtax rate applies to a taxable item or service delivered into a county imposing a surtax. (The surtax rate that applies to motor vehicles and mobile homes is determined by the home address of the purchaser.)
How to get a sales tax permit in Florida
You can register online via Florida’s Registration and Account Maintenance portal.
You can also register by mail by filling out Florida Form DR-1. (Though Florida recommends that you register online.)
In Florida, there may be a waiting period to use the online system to file and pay sales tax.
You’ll need this information to register for a sales tax permit in Florida:
- Business name, physical address, contact information, and mailing address
- Federal Employer Identification Number (FEIN); see instructions for item 8 if you do not have an FEIN
- Bank routing number and account information if enrolling to file and pay tax electronically
- Name, Social Security Number* (SSN), driver license number, address, and contact information of owner/sole proprietor, officers,
- partners, managing members, and/or trustees
- Dates when business activities began or will begin
- Description of business activities
- Employment information (date of hire, number of employees, payroll amounts, payroll agent’s PTIN, if applicable)
Online registration is free. There is a $5 fee to register by mail. Other business registration fees may apply.
How to Collect Sales Tax in Florida
The sales tax rate you collect in Florida depends on whether you are based in Florida or out-of-state.
How to Collect Sales Tax in Florida if You are Based in Florida
Florida is a destination-based sales tax state. So if you live in Florida, collect sales tax at the sales tax rate of the address where you ship your product.
You can look up your local sales tax rate with TaxJar’s Sales Tax Calculator.
How to Collect Sales Tax in Florida if you are Not Based in Florida
Florida wants sellers who made a sale into Florida from outside the state to charge sales tax based on the destination of the buyer.
Should you collect sales tax on shipping charges in Florida?
Shipping is not taxable in Florida if your order meets two separate criteria:
- The charge is separately stated on a bill or invoice
- The charge can be avoided by a decision or action solely on the part of the purchaser
Read a full explanation of sales tax on shipping in Florida here.
When are Returns Due?
When you file and pay Florida sales tax depends on two things: your assigned filing frequency and your state’s due dates.
How often will you file sales tax returns in Florida?
States assign you a filing frequency when you register for your sales tax permit. In most states, how often you file sales tax is based on the amount of sales tax you collect from buyers in the state.
In Florida, you will be required to file and remit sales tax either monthly, quarterly, or annually.
Florida sales tax returns are always due the last day of the month following the reporting period. If the filing due date falls on a weekend or holiday, sales tax is generally due the next business day.
Florida sales tax returns are always due by the 20th of the month following the reporting period. However it is important to note that Florida requires an extra business day to process payments, so though the “filing” due date may be the 20th, the payment due date will be 1-2 days earlier and must be initiated by 5pm ET to count as “on time.” This is indicated below by the “Payment Initiation Due Date.”
Keep in mind that all sales tax dates and other info is subject to change, so always consult with the Florida Department of Revenue for final say on all sales tax matters. If the Florida filing due date falls on a weekend or holiday, sales tax is due the next business day.
Filing Sales Tax
When it comes time to file sales tax in Florida you must do three things:
- Calculate how much sales tax you owe
- File a sales tax return
- Make a payment
How to Calculate How Much Sales Tax You Owe in Florida
Calculating how much sales tax you should remit to the state of Florida is easy with TaxJar’s Florida sales tax report.
All you do is connect the channels through which you sell – including Amazon, eBay, Shopify, Square and more – and we’ll calculate exactly how much sales tax you collected. All the information you need to file your Florida sales tax return will be waiting for you in TaxJar. All you have to do is login.
How to File and Pay Sales Tax in Florida
You have three options for filing and paying your Florida sales tax:
- File online: File online at the Florida Department of Revenue. You can remit your payment through their online system. Click here for detailed guide on how to file online.
- File by mail: You can use Form DR-15 and file and pay through the mail.
- AutoFile – Let TaxJar file your sales tax for you. We take care of the payments, too. You’ll never have to worry about spreadsheets, calculations or filling out complex sales tax returns.