Florida has no state income tax, but you will pay sales tax and property tax

Florida does not tax wages, salaries, or investment income at the state level. This is one of the largest differences between Florida and most other states. You will not file a state income tax return in Florida, and your employer will not withhold state income tax from your paycheck.

However, Florida does collect revenue through sales tax and property tax. The state sales tax rate is 6 percent, though counties add their own local sales tax on top of that amount. Property tax rates vary by county and depend on the assessed value of your home or business property.

Key Takeaways

  • Florida has no state income tax on wages, salaries, retirement income, or investment gains.
  • The state sales tax is 6 percent, and most counties add 0.5 to 1.5 percent in local sales tax on top of that.
  • Property tax rates range from about 0.3 percent to 1 percent of assessed property value, depending on which county you live in.
  • Sales tax applies to most goods and some services, but groceries, prescription medications, and medical equipment are typically exempt.

How Florida's sales tax works

When you buy something in Florida, you pay the state sales tax of 6 percent plus your county's local sales tax. The local rate varies: some counties charge 0.5 percent, others charge 1 percent or 1.5 percent. Your total sales tax at checkout will be somewhere between 6 and 7.5 percent in most places, though a few counties reach higher rates.

The sales tax applies to clothing, electronics, furniture, and most other goods. It also applies to some services like haircuts and car repairs. However, groceries (unprepared food you cook at home), prescription medications, and certain medical equipment are exempt from sales tax. Restaurant meals and prepared foods are taxed.

Sales tax is collected by the business at the point of sale and sent to the state and county. You do not file anything yourself—the tax is already included in your receipt total.

Property tax rates by county

Property tax in Florida is based on the assessed value of your home, land, or business property. The state does not set a single rate; instead, each county sets its own millage rate. A mill is one-tenth of one percent, so a rate of 10 mills equals 1 percent of assessed value.

Florida property tax rates typically range from about 0.3 percent to 1 percent of assessed value per year, depending on the county. For example, if your home is assessed at $300,000 and your county's rate is 0.8 percent, you would owe $2,400 in annual property tax. Counties use property tax revenue to fund schools, roads, emergency services, and local government.

Your county property appraiser determines the assessed value of your property, usually every year. Homeowners can claim a homestead exemption that reduces the assessed value, which lowers the property tax bill. The homestead exemption is worth $50,000 of assessed value for most homeowners, though the exact amount and rules vary by county.

Who pays property tax and when

Property tax is owed by anyone who owns real property in Florida—a house, land, commercial building, or rental property. If you have a mortgage, your lender may require you to pay property tax through an escrow account as part of your monthly payment. If you own the property outright, you receive a bill directly from your county tax collector.

Property tax bills are due by March 31 each year in most counties, though some counties have different important date. If you pay by the important date, you may receive a discount of up to 4 percent depending on when you pay. If you miss the important date, penalties and interest begin to accrue.

Other Florida taxes you may encounter

Florida charges a documentary stamp tax when you buy real property. This tax is 0.6 percent of the purchase price and is usually paid by the seller, though the buyer and seller can negotiate who pays it. For a $300,000 home purchase, the documentary stamp tax would be $1,800.

Florida also has a corporate income tax of 5.5 percent on business profits, a sales tax on certain services like telecommunications, and various excise taxes on items like fuel and cigarettes. If you own a business, you may owe corporate income tax even though you do not owe personal income tax on your wages.

Rental car companies pay a 6 percent sales tax plus a 2.5 percent rental car surcharge in Florida. Hotel stays are subject to sales tax plus a tourist development tax that varies by county, typically ranging from 1 to 5 percent.

How Florida's lack of income tax affects your finances

Because Florida has no state income tax, your take-home pay from a job is higher than it would be in a state with income tax, assuming the same salary. This is one reason Florida attracts retirees and workers from other states. If you move to Florida from a state with income tax, you will see an when ready increase in your paycheck.

However, Florida makes up the lost income tax revenue through sales tax and property tax. If you spend a lot of money on goods and services, or if you own property, you may pay more in total taxes in Florida than you would in another state. The overall tax burden depends on your personal situation—your income level, how much you spend, and whether you own property.

Frequently Asked Questions

Do I have to file a Florida state income tax return?

No. Florida does not have a state income tax, so you do not file a state return. You may still owe federal income tax to the IRS, and you will file a federal return if your income exceeds the threshold set by the IRS that year.

What is the total sales tax rate where I live?

Your total sales tax is 6 percent (state) plus your county's local rate. To find your county's local rate, visit your county tax collector's website or call their office. Most counties charge between 0.5 and 1.5 percent locally, making the total between 6.5 and 7.5 percent.

Can I reduce my property tax bill?

Yes, if you own a home and live in it as your primary residence, you can claim a homestead exemption that reduces your assessed value by $50,000 (in most counties). You must file for the exemption with your county property appraiser by March 1 of the year you want it to take effect. Other exemptions may be available if you are a veteran, disabled, or over 65.

Is food taxed in Florida?

Unprepared groceries—items you buy at the store to cook at home—are not taxed. However, prepared food from restaurants, delis, and food trucks is taxed at the full sales tax rate. Alcohol and beverages are also taxed.

What happens if I do not pay my property tax on time?

If you miss the March 31 important date, a penalty of 3 percent is added to your bill. After three months, the penalty increases. If property tax remains unpaid for two years, the county can sell your property at a tax deed sale to recover the debt. Contact your county tax collector when ready if you cannot pay on time.