Florida Corporate Income Tax

The majority of sales tax for certain kinds of business income is taken from the state. As part of the regulation, the information on how earnings from a particular business are taxed vary according to the legal form of the business. Most state corporations are required to have a corporate income tax while earning generated from entities like partnerships, S corporations, limited liability companies/LLCs, and sole proprietorship are required to have personal income tax under the state. Tax rates for personal income and corporate income tax differ from state to state. However, corporate rates are usually flat, no matter how much income is generated from the business. Generally, income tax can range from 4% to 10%.

Moreover, since Florida doesn’t impose tax on the personal income of each individual because it doesn’t have personal income tax, corporate income tax is a crucial source of income that helps the state. Businesses that are incorporated are required by the law to finish a tax return to make up for the corporate tax subjected to the income of the business. However, both corporations and individuals need to keep in mind that there are also other forms of taxes that are gathered by the state. 

Presently, there are only six states that don’t have any corporate income tax, namely South Dakota, Nevada, Ohio, Texas, Wyoming, and Washington. The rest of the states have an existing corporate income tax for different businesses and companies, and these include Florida. All corporation that is generally registered in Florida needs to settle a corporate income tax return, even though they are not liable to pay any of these taxes. However, there are particular individuals and kinds of businesses that don’t necessarily have to settle a tax return, most especially if they are not part of a corporation. These include:

  • Individuals
  • Sole Proprietors
  • S Corporations – might be subjected to complete tax at a federal level

Does Florida have a corporate income tax?

Florida, just like the majority of the states, has a corporate income tax. The Florida state government utilizes a cutting edge CIT website to support quick and efficient corporate income tax return filing. There are various types of tax returns that can be filed on the web, and one can also pay for it online. These include:

  • F-11204A, Florida Corporate Short Form Income Tax Return
  • F-7004, Florida Corporate Extension of Time
  • F-1120ES, Florida Corporate Estimated Tax Payment

Moreover, the F-1120, Florida Corporate Long Form Income Tax Return can be filed and paid online, but you are required to use specific, specialized software. This is accessible at the Florida Department of Revenue.

Small business corporations that operate within Florida can file their F-11204A, Florida Corporate Short Form Income Tax Return online. However, there are particular requirements that have to be met by these corporations. To qualify, they have to submit the complete name of their corporation, proven address, registration numbers, and Florida contact number. Apart from this, they also need to submit their corporate income tax records as additional to the information on their registered bank details. Other pieces of evidence that should be proven by the corporations include:

  • They have a net income that is not more than $45, 000
  • They operate within the state of Florida, and not somewhere else
  • They have zero tax credits but exempted to Estimated Tax Payments or Tentative Tax Payments
  • They do not have any federal Alternative Minimum Tax
  • The corporation hasn’t filed or been a part of any kinds of tax returns

On another note, Florida corporate income tax is taxed using either of these two strategies: 3.3% alternative minimum tax (AMT) or 5.5% state tax on federal taxable income. The 3.3% tax that is aligned with the AMT strategy is applicable once you have considered the total amount of any reduce exemption or federal exemption as declared on the federal income tax return of the corporation. Florida corporations are required to utilize any of the strategies mentioned above, as long as it yields the greatest tax for the corporation. No matter what strategy is suitable in your situation, $50, 00 net income is exempted – this has been the standard amount ever since the beginning, but it could still change. Moreover, the payment for corporation income tax rate in Florida is set on the 1st of May, if the tax year of the corporation is similar to the calendar year. If not, the corporate income tax return is due on the first day of the fifth month once the corporation’s tax year is close.

Does a Florida LLC file a tax return?

Florida has specialized rules and regulations for LLCs. In case a corporation is part of a multi-member LLC, otherwise known as a partnership for state and federal tax purposes. The LLC is required to file the Florida Form F-1065 while the corporation is subjected to file a Florida corporate income tax return. With regards to this, if a certain corporation indirectly or directly owns one member of the LLC known as a disregarded entity specifically for federal tax purposes, then the corporation is subjected to file the Florida F-1120 stating both the earnings of the single-member LLC and its personal earnings.

Regular LLCs are typically pass-through entities that aren’t subjected to any income tax to either the State of Florida or the federal government. Instead, the earnings from the business are equally given to independent LLC members, which pay their federal taxes according to the amount of income given to them. Since it is given that Florida doesn’t have a personal income tax, standard Florida LLC members aren’t subjected to pay any tax to the state using their earnings from the LLC. As aforementioned, multi-member LLCs known as partnerships for tax reasons that own a corporation as a member, as well as single-member LLCs recognized as disregarded entities that are indirectly or directly belongs to a corporation, are required to specialized state filing requirements. 

Furthermore, even if LLCs are considered as disregarded entities or partnerships by default due to Florida taxes, you still have the freedom to select whether or not you want your LLC to be recognized as a corporation. About this, the LLC is required to have the Florida corporate income tax. Consider this example:

For the current tax year, a certain multi-member LCC that has a default tax recognition of the partnership doesn’t have any corporation member, and it had a $100, 000 net income. This amount of net income will be distributed between you and the other members of the LLC, and each of you will have your respective federal income tax returns paid. This is because all of you are required to. However, take note that you don’t owe your Florida tax returns any tax from this money.

For more information about corporate income tax or taxes in Florida in general, you can contact or check out the Florida Department of Revenue. 

Does a foreign corporation need to file taxes in Florida ?

People from different parts of the world form LLCs and corporations, even if they operate their business from their home country or state. However, what will you do if you own a company that’s operating within the premises of Florida as a foreign corporation?

If you are managing a corporation in Florida, basically, your corporation will be recognized as a foreign corporation that operates in Florida. Individuals typically form a corporation and then sign up as a foreign entity – or the same business – in Florida. This particular procedure is known as Foreign Qualification. This is a procedure where Florida gives you their permission that allows you to do your business in their state. It is an essential step that usually gets ignored by many individuals; however, if you fail to meet the local compliance regulations in Florida, you and your company might be in a lot of trouble.

The Florida corporate income or franchise tax is subjected to all corporations for the permission of doing business, generating income, or operating in Florida. All corporations or companies that are federally taxed as corporations are required to pay their taxes, even out-of-state or foreign corporations.

The corporate income tax rate varies and some companies are required to pay additional Florida sales tax and corporate income tax rate depending on their estimated income.

What is the federal income tax rate in Florida?

There are currently seven federal tax brackets, namely. 37%, 35%, 32%, 24%, 22%, 12%, and 10%. This bracket varies according to the filing status and taxable income of an individual. To find out more about the federal income tax rate, here’s a detailed guide based on the Florida department of revenue:

For single filers in Florida:

  • Tax rate of 10% and taxable bracket of $0 – $9,700 results to 10% of taxable income.
  • Tax rate of 12% and taxable bracket of $9,701 – $39,475 results to a taxable income of $970 plus 12% of the amount more than $9,700
  • Tax rate of 22% and taxable bracket of $39, 476 – $84,200 results to a taxable income of $4,543 plus 22% of the amount more than $39, 475
  • Tax rate of 24% and taxable income bracket of $84,201 – $160, 725 results to a taxable income of $14, 382.50 plus 24% of the amount more than $84, 200
  • Tax rate of 32% and taxable income bracket of $160, 726 – $204, 100 results to a taxable income of $32, 748.50 plus 32% of the amount more than $160, 725
  • Tax rate of 35% and taxable income bracket of $204, 101 – $510, 300 results to a taxable income of $46, 628.50 plus 35% of the amount more than $204, 1000
  • Tax rate of 37% and taxable income bracket of $510, 301 or more results to a taxable income of $153, 798.50 plus 37% of the amount more than $510, 301

For Married, filing together in Florida

  • Tax rate of 10% and taxable bracket of $0-$19, 400 results to a 10 % taxable income
  • Tax rate of 12% and taxable bracket of $19,401 – $78,950 results to a taxable income of $1,940 plus 12% of the amount more than $19,400
  • Tax rate of 22% and taxable income bracket of $78, 951 – $168, 400 results to a taxable income of $9, 086 plus 22% of the amount more than $78, 950
  • Tax rate of 24% and taxable income bracket of $168,401 – $321,450 results to a taxable income of $28, 765 plus 24% of the amount more than $168, 400
  • Tax rate of 32% and income taxes bracket of $321,451 – $408, 200 results to a taxable income of $65, 497 plus 32% of the amount more than $321,450
  • Tax rate of 35% and taxable bracket of $408,201 – $612, 350 results to a taxable income of $93, 257 plus 35% of the amount more than $408,200
  • Tax rate of 37% and income taxes bracket of $612, 351 or more results to a taxable income of $164, 709.50 plus 37% of the amount more than $612, 350

Sales tax Florida as well as franchise tax values are not fixed. It is a requirement that businesses or a company pay franchise tax and pay federal income taxes every January.

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