Florida's Main Taxes: What You Actually Pay

Florida has no state income tax on wages, retirement income, or investment gains — that is the biggest difference between Florida and most other states. Instead, Florida funds state government through sales tax, property tax, corporate taxes, and smaller levies on specific goods and services. If you move to Florida or earn money there, you will owe federal income tax to the IRS, but not to the state of Florida itself.

The tradeoff is that Florida's sales tax and property tax are higher than the national average. A gallon of gas, a restaurant meal, or a new appliance costs more in Florida tax than it would in many other states. Property owners pay tax based on the assessed value of their home or land, and that rate varies by county.

Key Takeaways

  • Florida collects no state income tax on wages, pensions, or investment income, which is why retirees and high earners often move there.
  • Sales tax in Florida ranges from 6% to 7.5% depending on the county, and applies to most goods but not to groceries or prescription drugs.
  • Property tax is assessed by county and based on the market value of your home; rates range from about 0.7% to 1.1% of assessed value across the state.
  • Corporations pay a 5.5% tax on net income in Florida, and businesses also owe sales tax on goods they buy for resale.
  • Fuel tax, documentary stamp tax on property sales, and excise taxes on cigarettes and alcohol are smaller but real costs for specific purchases.

Sales Tax: What It Covers and What It Does Not

Florida's sales tax starts at 6% and can reach 7.5% depending on which county you are in. Miami-Dade County charges 7%, Orange County (Orlando) charges 6.5%, and Hillsborough County (Tampa) charges 7.5%. When you buy something at a store, the tax is added at checkout unless the item is exempt.

Groceries and prescription drugs are not taxed in Florida. Neither are medical devices like hearing aids or prosthetics. Clothing and shoes under $100 per item are also exempt. But restaurant meals, prepared foods, and non-prescription items are taxed at the full rate. If you order food for delivery or takeout, it is taxed the same way as eating in the restaurant.

Services are usually not taxed in Florida — haircuts, plumbing repairs, and car maintenance do not have sales tax added. But if you buy a physical product as part of that service (like paint for a house), the product itself is taxed.

Property Tax: How It Is Calculated and Who Pays It

Property tax in Florida is based on the assessed value of your home or land, not on your income or the price you paid for it. The county assessor determines the value each year, and the tax rate varies by county. Rates range from roughly 0.7% to 1.1% of assessed value, which means a home worth $300,000 might owe $2,100 to $3,300 per year depending on location.

If you own your home outright, you pay property tax directly to the county. If you have a mortgage, your lender usually collects the tax as part of your monthly payment and pays the county on your behalf. Property tax bills are due in November, though you can pay in installments.

Florida offers a homestead exemption that reduces the assessed value by $50,000 for primary residences, which lowers the tax bill. You must own the home and live in it as your main residence to claim it. There are also exemptions for seniors over 65, disabled people, and surviving spouses of military members.

Corporate and Business Taxes

Corporations operating in Florida pay a 5.5% tax on net income. This applies to for-profit businesses, not to nonprofits or sole proprietors. The tax is calculated on profit after expenses, not on total revenue.

Sole proprietors and partnerships do not pay a separate Florida business tax — instead, business income is reported on the owner's federal tax return. However, businesses of all types must collect and remit sales tax on goods they sell. If you run a business that buys inventory, you can get a resale certificate so you do not pay sales tax when you buy goods to resell, but you will owe sales tax when you sell them to customers.

Fuel Tax, Excise Tax, and Other Smaller Taxes

Florida charges 27.1 cents per gallon of gasoline and 27.4 cents per gallon of diesel fuel. This is in addition to the federal fuel tax of 18.4 cents per gallon for gas and 24.4 cents per gallon for diesel. When you fill up at a gas station, both taxes are included in the price.

Cigarettes and smokeless tobacco are taxed at $2.175 per pack of 20 cigarettes. Alcohol is taxed differently depending on the type — beer, wine, and spirits each have separate excise tax rates. These taxes are built into the shelf price at stores.

When you buy or sell real estate in Florida, the seller pays a documentary stamp tax of $0.70 per $100 of the sale price. On a $300,000 home sale, that is $2,100. This tax is usually paid at closing and is often negotiated between buyer and seller as part of the deal.

Who Does Not Pay Income Tax in Florida

Retirees who receive Social Security, pensions, or distributions from retirement accounts do not owe Florida state income tax on that money. Military pensions are also exempt. This is why Florida attracts many retirees — they can live on retirement income without a state income tax bill.

However, retirees still pay sales tax and property tax. If a retiree owns a home in Florida worth $400,000, they will owe property tax based on that value every year, even if their only income is a pension. And every purchase at a store is subject to sales tax.

Non-residents who earn money in Florida — such as contractors, freelancers, or people who work remotely for a Florida company — do not owe Florida income tax either. They owe federal income tax to the IRS, but Florida does not tax their wages.

Federal Taxes You Still Owe

Moving to Florida does not change your federal tax obligations. You still owe federal income tax on wages, self-employment income, investment gains, and most other income sources. You still file a federal return with the IRS every year if your income exceeds the threshold for your filing status.

If you are self-employed in Florida, you owe self-employment tax (Social Security and Medicare tax) at 15.3% of net profit, just as you would in any other state. This is a federal tax, not a Florida tax. You also owe federal capital gains tax if you sell investments or real estate at a profit.

Frequently Asked Questions

Do I have to pay Florida income tax if I move there from another state?

No. Florida has no state income tax on wages, pensions, or investment income. You will owe federal income tax to the IRS, but not to Florida. This applies whether you are a new resident or have lived there for decades.

What is the sales tax rate where I live in Florida?

Sales tax ranges from 6% to 7.5% depending on your county. You can find your county's rate on the Florida Department of Revenue website by entering your zip code, or ask a cashier at any store in your area.

How much property tax will I owe on a home in Florida?

Property tax depends on the assessed value of your home and your county's tax rate. Rates range from about 0.7% to 1.1% of assessed value. A $300,000 home might owe $2,100 to $3,300 per year. The county assessor's office can give you an estimate based on your specific address.

Are groceries taxed in Florida?

No. Groceries are exempt from sales tax in Florida. This includes items like milk, bread, vegetables, and meat. Restaurant meals and prepared foods are taxed, but raw groceries you cook at home are not.

Do I owe Florida taxes if I work remotely for a company in another state?

No. Florida does not tax income earned from work, regardless of where your employer is located. You owe federal income tax to the IRS, but not to Florida. Your employer may still withhold federal tax from your paycheck as usual.