Guide to Florida Sales Taxes & Penalties
To sell goods or services in Florida, you must collect sales tax. You will face penalties and interest if you don't file or pay your Florida sales tax correctly and on time. Sales tax evasion can lead to criminal charges.
To help you out, here is an overview of Florida's sales tax rules and penalties.
How Much Is Florida Sales Tax?
Florida sales tax is 6% for most sales of goods, services, hotel rooms, and short-term rentals. The state also applies a 4% sales tax to amusement machine rentals, a 5.5% sales tax on leases and licenses of commercial property, and a 6.95% sales tax on electricity.
Many counties also add a discretionary surtax rate, but with some sales, only $5,000 of the sale is subject to the county sales surtax. The state allows counties to assess sales surtaxes from 0.5% to 2.5%.
For example, if you have a retail store or a restaurant in Miami-Dade County, you must assess the state sales tax of 6% plus the county's discretionary surtax of 1%. This makes the total sales tax 7%. If you sell a $100 item in this county, you must collect $7 in sales tax from the customer and remit that to the Florida Department of Revenue with your sales tax return.
Who Needs to Collect Florida Sales Tax?
Essentially, anyone who sells products or services in Florida needs to collect Florida sales tax. If you sell any of the following types of items or services, you need to collect sales tax:
- Retail items
- Food and beverages from restaurants and caterers.
- Rent or lease payments for vehicles or other goods.
- Repairs and alterations.
- Services such as burglar protection, nonresidential cleaning, and nonresidential pest control.
- Admissions to amusement parks, sport games, etc.
- Rent for commercial spaces.
- Rents for short-term (transient rental accommodations) such as hotels, campground sites, and RV parks
- Memberships to recreation or fitness facilities.
- Vending or amusement machines.
When Are Florida Sales Taxes Due?
Sales tax returns and payments are due on the 1st of the month following the reporting period, but they are not late until after the 20th. The final due date is the next business day if the 20th falls on a weekend or holiday. For example, your sales tax return for March sales is due April 1st, but it is not late until after April 20th or the following business day.
For your return to be on time, you must e-file, postmark, or deliver it in person by the 20th. Payments are considered on time if they are postmarked or delivered by the due date, but if you pay online, you must make the payment by 5 PM ET on the business day before the 20th. For instance, if the 20th falls on a Monday, you must make your e-payment by the previous Friday.
What Are the Penalties for Not Collecting Florida Sales Tax?
You can lose your business license if you don't collect Florida sales tax. The Florida Department of Revenue can issue a warrant for the delinquent sales tax, interest, penalties, and the cost of collection. The county sheriff can execute the warrant to seize your real or personal property. The state also has the right to garnish your bank accounts, wages, and payments from third parties such as clients.
What Are the Penalties for Not Paying Florida Sales Tax?
Failure to pay Florida sales tax can lead to severe penalties. Under Florida state law, failure to file a sales tax return for six consecutive months is a felony.
If you willfully attempt to evade Florida sales tax by submitting a false or fraudulent return, the state can impose an additional penalty of 100% of the tax due. For instance, if you owe $3,000, the penalty will be $3,000.
You can also face the following criminal penalties for not paying Florida sales tax:
- For the first or second offense of not paying sales tax of less than $300 — second-degree misdemeanor and up to 60 days in prison.
- For the third and subsequent offenses of not paying sales tax of less than $300 — third-degree felony and up to five years in prison.
- Failure to pay sales tax of more than $300 and up to $20,000 — third-degree felony and up to five years in prison.
- Failure to pay sales tax of $20,000 or more but less than $100,000 — second-degree felony and up to 15 years in prison.
- Failure to pay sales tax of $100,000 or more — first-degree felony and up to 30 years in prison.
Unpaid sales taxes can add up quickly. If a business with $500,000 in annual revenue fails to pay state sales tax for the year, it will owe $30,000 for the year. Unpaid taxes at that level can lead to significant fines, penalties, and over a decade in prison.
Penalties for Late Sales Tax Returns
If you file or pay late, you incur a penalty of 10% of the tax owed. This penalty applies monthly, and it can get up to 50% of the balance. For instance, if you owe $2,000 and don't pay for six months, you will incur a $1,000 penalty.
The state assesses a minimum penalty of $50. For example, if your sales tax due is $3,000, the late penalty is $300. If your sales tax payment is $500 or less, the penalty is $50.
You still must file if you don't owe sales tax for the month. If you don't, you will incur the $50 late penalty. The Florida Department of Revenue also assesses a late penalty if your return is incomplete.
Can I Avoid Paying the Florida Sales Tax Penalties?
The best way to avoid sales tax penalties is to file a complete and accurate Florida sales tax return on time. However, you can apply for penalty relief. It is always better to contact the Department of Revenue before the agency contacts you.
If you apply for penalty relief on your sales tax before the Department of Revenue contacts you, the Department of Revenue can waive some of your penalties. Still, there is a mandatory penalty of the lessor of $1,000 or 10% of the total tax due. Once the department contacts you, the mandatory penalty increases to the lessor of $5,000 or 20% of the tax due.
Florida Sales and Use Tax Audit
The Florida Department of Revenue can do audits of sales and use tax. Generally, they will send notice DR-840, which is a full audit notice, or a DR-846, which is a limited audit scope notice. The taxpayer will have 60 days to prepare for the audit and may request certain documentation or information. It is important for businesses to be away of these notices and their rights as they prepare for a sales and use tax audit.
How to File and Pay Florida Sales Tax
You can file your Florida sales tax return through the mail using Form DR-15 (Sales and Use Tax Return). Or file online with the Florida Department of Revenue. Filing online tends to be faster and easier.
Where Do I Register My Business for the Florida Sales Tax?
You must register your business with the Florida Department of Revenue. You can register through the mail using Form DR-1 (Account Management and Registration). To register online, visit the state's online Florida Business Tax Application.
Florida Sales Tax on Online Sales
If you sell goods online to Florida residents, you must register and pay sales tax if your Florida sales exceed $100,000 in the previous calendar year. This rule only applies to out-of-state dealers. You must pay Florida sales tax if you have a physical presence in Florida or are a Florida resident, even if your business is exclusively online.
Get Help With Florida Sales Tax
If you have gotten behind on your Florida sales tax returns or payments, you have options. A Florida tax professional can help you file delinquent sales tax returns, negotiate payment arrangements, and deal with the Department of Revenue. To get help, reach out to a local Florida tax pro today that has experience with sales tax issues. They can answer your questions and help you find the best path forward.