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

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. However, you will still owe federal income tax to the IRS, and Florida collects revenue through sales tax, property tax, corporate tax, and excise taxes on specific goods.

The absence of state income tax does not mean Florida residents pay nothing to the state. The tax burden shifts to consumption and property ownership instead. Understanding which taxes explore to you depends on what you earn, what you buy, and whether you own real estate in the state.

Key Takeaways

  • Florida has no state income tax on wages, salaries, interest, dividends, or capital gains, which is different from 41 other states.
  • Florida's sales tax starts at 6 percent at the state level, but counties add their own local sales tax, bringing the total to between 6 and 7.5 percent depending on where you shop.
  • Property tax in Florida is calculated as a percentage of assessed property value and varies by county, with rates typically between 0.7 and 1.1 percent of home value.
  • Florida taxes corporate income, and businesses also pay sales tax on goods and services they purchase for resale or use.

Florida sales tax rates by county

Florida's state sales tax is 6 percent. Every county in Florida is allowed to add a local sales tax on top of this, and most do. The combined rate—state plus local—ranges from 6 percent to 7.5 percent depending on which county you make the purchase in.

Some counties add 0.5 percent, others add 1 percent or more. For example, Miami-Dade County has a combined rate of 7 percent, while Duval County (Jacksonville) has 7 percent as well. Smaller counties may have lower combined rates. The sales tax applies to most tangible goods and some services, but groceries, prescription medications, and medical devices are generally exempt.

If you buy something online from a seller without a physical location in Florida, you may not see Florida sales tax added at checkout. However, you are technically responsible for paying "use tax"—a tax on goods you bring into Florida or have delivered to you—at the same rate as sales tax. Most individuals do not pay use tax voluntarily, but it exists as a legal obligation.

How Florida property tax works

Property tax in Florida is based on the assessed value of your home or land. The state does not set a single property tax rate; instead, each county sets its own rate, called the millage rate. One mill equals $1 in tax per $1,000 of assessed property value. A millage rate of 10 mills means you pay $10 per $1,000 of assessed value, or 1 percent.

Florida's property tax rates vary by county. Most counties have millage rates between 7 and 11 mills, which translates to roughly 0.7 to 1.1 percent of your home's assessed value per year. A home assessed at $300,000 in a county with a 10-mill rate would owe $3,000 in annual property tax. Your county assessor determines the assessed value, which may differ from the market price of your home.

Florida offers a homestead exemption that reduces the assessed value of your primary residence by $50,000 for school tax purposes and up to $25,000 for other local taxes, depending on your county. You must explore for this exemption through your county property appraiser's office, and you must own the home and live in it as your primary residence. This exemption can significantly lower your property tax bill.

Corporate income tax and business taxes in Florida

While Florida does not tax individual income, it does tax corporate income. Corporations pay a corporate income tax rate of 5.5 percent on net income. This applies to C corporations and certain other business entities. Sole proprietors and partners do not pay corporate income tax because their business income is not taxed at the state level.

Businesses in Florida also pay sales tax on goods and services they purchase for resale or use in their operations. They collect sales tax from customers and remit it to the state. Businesses may also owe unemployment insurance tax and workers' compensation insurance, which are separate from income tax.

Excise taxes and other state taxes

Florida imposes excise taxes on specific products, including gasoline, diesel fuel, cigarettes, and alcoholic beverages. These taxes are built into the price you pay at the pump or store and are not listed separately on your receipt. The excise tax on gasoline is currently 27.3 cents per gallon at the state level, though the federal government also adds 18.4 cents per gallon.

Florida also collects documentary stamp tax on real estate transactions, insurance premiums tax, and utility tax in some counties. The documentary stamp tax on property sales is 70 cents per $100 of the sale price (or $0.70 per $100). This tax is typically split between the buyer and seller, though the seller usually pays it. When you buy a home in Florida, you will see this tax listed on your closing statement.

How Florida's tax system compares to other states

Nine states have no state income tax: Alaska, Florida, Nevada, South Dakota, Tennessee, Texas, Washington, and Wyoming. Of these, only Alaska, Florida, Nevada, South Dakota, Tennessee, and Texas have no income tax and no estate tax. This makes Florida attractive to retirees and high-income individuals who want to minimize state tax liability.

However, Florida's lack of income tax does not mean the overall tax burden is lower than in other states. Residents pay higher sales tax and property tax to compensate for the missing income tax revenue. A person earning $100,000 per year may pay less in state taxes in Florida than in a state with income tax, but a person with a $500,000 home may pay more in property tax. The comparison depends on your individual situation.

Frequently Asked Questions

Do I have to pay federal income tax if I live in Florida?

Yes. Florida's lack of state income tax does not affect your federal tax obligation. You still owe federal income tax to the IRS on wages, self-employment income, investment income, and other sources. Your federal tax rate depends on your income level and filing status, not on where you live.

Is Social Security income taxed in Florida?

No. Florida does not tax Social Security benefits. However, the federal government may tax your Social Security income depending on your total income and filing status. This is a federal rule, not a Florida rule. Many retirees choose Florida partly because of this state tax exemption.

What is the property tax on a $400,000 home in Florida?

It depends on your county's millage rate and whether you claim the homestead exemption. In a county with a 10-mill rate and no homestead exemption, you would owe $4,000 per year. With the homestead exemption, the assessed value drops by $50,000 for school tax, reducing your bill. The exact amount varies by county and your specific exemptions.

Do I pay sales tax on groceries in Florida?

No. Most groceries are exempt from Florida sales tax. However, prepared foods, candy, and soft drinks are taxed. If you buy a sandwich at a deli counter, you pay sales tax. If you buy bread and deli meat to make a sandwich at home, you do not. The distinction is whether the food is ready to eat.

Can I deduct Florida property taxes on my federal return?

Yes, if you itemize deductions on your federal tax return. The state and local tax (SALT) deduction allows you to deduct up to $10,000 in combined state income tax, property tax, and sales tax per year. This is a federal deduction, not a Florida benefit. Most homeowners with mortgages benefit from itemizing, but you should consult a tax professional about your specific situation.