How Florida Taxes LLCs in 2025
Florida is one of the most popular states for LLC formation, and for good reason: the Sunshine State has no personal income tax. This means LLC owners who operate pass-through entities pay zero state income tax on their business profits. Florida's Constitution prohibits the imposition of a personal income tax, making this benefit particularly secure.
While Florida does not tax personal income, it does impose a 5.5% corporate income tax on LLCs that elect C-corporation taxation (with the first $50,000 exempt). For the vast majority of LLC owners who use pass-through taxation, the state income tax liability is $0.
Constitutional Protection: Florida's ban on personal income tax is enshrined in the state constitution (Article VII, Section 5). Changing this would require a constitutional amendment approved by voters, making Florida's no-income-tax status highly secure and reliable for long-term business planning.
Florida Corporate Income Tax (C-Corp Only)
LLCs electing C-corporation taxation are subject to Florida's corporate income tax:
| Taxable Income | Tax Rate |
|---|---|
| $0 - $50,000 | 0% (exempt) |
| Over $50,000 | 5.5% |
The $50,000 exemption means that only net income exceeding this threshold is taxed. For most pass-through LLCs, this is not applicable.
Florida LLC Annual Requirements
- Annual Report: $138.75 per year, filed with the Florida Division of Corporations
- Due date: May 1 annually
- Late fee: $400 supplemental fee if filed after May 1
- Failure to file: LLC may be administratively dissolved if not filed by the third Friday of September
- Filing method: Must be filed online through sunbiz.org
Federal Taxes for Florida LLCs
Although Florida imposes no state income tax, LLC owners still owe federal taxes:
- Self-Employment Tax (15.3%): 12.4% Social Security on income up to $176,100, 2.9% Medicare on all income, plus 0.9% Additional Medicare Tax on income exceeding $200,000 (single) or $250,000 (MFJ).
- Federal Income Tax: 10% to 37% based on total taxable income and filing status
- Quarterly estimated payments: April 15, June 15, September 15, January 15
- QBI Deduction: Up to 20% of qualified business income under Section 199A
Tax Savings Example: A Florida LLC owner earning $150,000 saves approximately $7,500-$10,000 per year compared to operating the same LLC in a state with a 5-7% income tax rate. Over 10 years, this represents $75,000-$100,000 in cumulative tax savings.
Florida Sales and Use Tax
Florida relies heavily on sales tax as a revenue source:
- State sales tax: 6%
- County discretionary sales surtax: Up to 2.5% additional (varies by county)
- Average combined rate: 7.02%
- Miami-Dade County: 7% combined
- Orange County (Orlando): 6.5% combined
- Hillsborough County (Tampa): 8.5% combined
- SaaS and digital goods: Generally exempt from Florida sales tax (but rules are evolving)
Florida LLC Formation Costs
- Articles of Organization: $125 (online filing)
- Annual Report: $138.75 per year
- Registered Agent: Required; can be a member, officer, or commercial agent
- Name reservation (optional): $25
- Certified copies (optional): $30 each
- Fictitious name registration (if applicable): $50
Florida Reemployment Tax (Unemployment)
If your Florida LLC has employees:
- Reemployment Tax (UI): 0.1% to 5.4% on the first $7,000 of wages per employee (new employer rate: 2.7%)
- Workers' Compensation: Required for most employers with 4+ employees (construction: 1+ employees)
- No state income tax withholding: Since Florida has no income tax, employers do not withhold state taxes from employee paychecks
Florida LLC vs. Other No-Income-Tax States
| State | Income Tax | Sales Tax | LLC Annual Fee | Filing Fee |
|---|---|---|---|---|
| Florida | 0% | 6% + local | $138.75 | $125 |
| Texas | 0% | 6.25% + local | $0 (franchise may apply) | $300 |
| Wyoming | 0% | 4% | $60 | $100 |
| Nevada | 0% | 6.85% + local | $350 | $425 |
| Tennessee | 0% | 7% + local | $300 min | $300-$3,000 |
| South Dakota | 0% | 4.5% | $50 | $150 |
| Alaska | 0% | 0% (local only) | $100 biennial | $250 |
| New Hampshire | 0% (5% interest/dividends) | 0% | $100 | $100 |
| Washington | 7% cap gains only | 6.5% + local | $0 | $200 |
Advantages of a Florida LLC
- No personal income tax: Constitutionally protected, providing long-term certainty
- Large consumer market: Florida is the third-most-populous state with 23+ million residents
- No state capital gains tax: Investment profits are not taxed at the state level
- Homestead exemption: Florida's strong homestead protection shields your primary residence from most creditors
- Charging order protection: Florida provides strong protection for single-member LLC interests
- Business-friendly environment: Streamlined online filing through sunbiz.org
Filing Deadlines for Florida LLCs
- Federal tax return: April 15 (Form 1040 with Schedule C or Form 1065)
- Annual Report: May 1 (filed at sunbiz.org; $400 late fee applies)
- Sales tax returns: Monthly, quarterly, or semiannually (based on volume)
- Estimated tax payments: Federal quarterly estimates (April 15, June 15, September 15, January 15)
- Reemployment tax: Quarterly filing with the Florida Department of Revenue
Common Mistakes Florida LLC Owners Make
- Missing the May 1 annual report deadline: The $400 late fee is one of the harshest in the nation. Set reminders early.
- Assuming no taxes are owed: Federal self-employment tax (15.3%) and federal income tax still apply. Only the STATE income tax is zero.
- Forgetting about tangible personal property tax: Florida counties impose an annual tax on business equipment and furnishings.
- Not collecting sales tax: If selling taxable goods or services, you must register, collect, and remit Florida sales tax.
- Ignoring commercial rent tax: Florida imposes a 2% sales tax on commercial real estate rentals (being phased down).
- Multi-state nexus issues: If your Florida LLC sells to customers in states with income tax, you may have nexus in those states.
Tax Deductions for Florida LLC Owners
- QBI Deduction: 20% of qualified business income under Section 199A
- Self-employment tax deduction: 50% of SE tax as an above-the-line deduction
- Home office deduction: Simplified ($5/sq ft) or regular method
- Health insurance premiums: Self-employed health insurance deduction
- Retirement contributions: SEP IRA (up to $69,000), Solo 401(k), SIMPLE IRA
- Vehicle expenses: Standard mileage rate of $0.70/mile (2025) or actual expenses
- Business meals: 50% deductible for business-related meals
- Section 179 depreciation: Up to $1,250,000 for qualifying business equipment