Florida Sales & Use Tax: What Miami Businesses Get Wrong
Key takeaways
- Miami-Dade’s combined rate is 7%, but the 1% county surtax applies only to the first $5,000 of a single item.
- Most services are not taxable in Florida, but a specific list is, including commercial real property rentals.
- Out-of-state sellers must register once Florida remote sales exceed $100,000 in the prior calendar year.
- Marketplace facilitators collect on their own sales, but your direct sales remain your responsibility.
- Florida’s voluntary disclosure program typically limits lookback and waives penalties, but only if you come forward first.
Florida sales tax looks simple. Six percent, plus a bit of county surtax, filed monthly. Most businesses set it up once and never revisit it.
Then they discover the cap they never applied, the service they should have been taxing, or the state they crossed a threshold in two years ago. Here are the rules that actually cost Miami businesses money.
The rate is 7%, but not on everything
Florida imposes a 6% state sales tax. Miami-Dade County adds a 1% discretionary sales surtax, giving a combined 7%.
Here is the part that is routinely missed: the county surtax applies only to the first $5,000 of a single item of tangible personal property. Above that, only the 6% state rate applies.
| Sale | Correct tax | Common error |
|---|---|---|
| $3,000 equipment | $210 (7% throughout) | : correct either way |
| $20,000 machine | $1,250 (6% on all, 1% on first $5,000) | $1,400 (7% on all): $150 overcharged |
| $60,000 equipment | $3,650 | $4,200: $550 overcharged |
The cap applies per item, not per invoice. Two $4,000 machines on one invoice each get their own cap. One $8,000 machine gets one.
Businesses selling higher-value goods and applying a flat 7% have been overcharging customers, and remitting the excess to the state.
Services: mostly exempt, with a list that matters
Florida generally does not tax professional services. Accountants, lawyers, consultants and designers do not charge sales tax on their fees.
But Florida taxes a specific list, and it catches people:
- Commercial real property rentals: the big one, covered below
- Nonresidential cleaning services
- Commercial pest control
- Detective, burglar protection and security services
- Certain repair, alteration and fabrication of tangible personal property
That last category snares more businesses than the rest combined. If you repair or modify a physical object for a customer, that labor is frequently taxable even though it feels like a service.
Commercial rent is taxable
Florida is unusual in taxing commercial real property leases. If you lease office, retail, warehouse or industrial space, sales tax applies to the rent, and to many additional charges passed through under the lease. The state rate on commercial rent has been reduced several times in recent years, so confirm the current rate rather than relying on an old figure. Residential rentals are not taxed this way.
When out-of-state sellers must register
Florida's economic nexus threshold is $100,000 in taxable remote sales into Florida during the previous calendar year.
Two things distinguish it from other states:
- No transaction-count trigger. Many states also catch you at 200 transactions regardless of value. Florida does not.
- Prior calendar year measurement. You look back at the completed year, not a rolling twelve months.
If you are a Miami business selling into other states, the reverse applies, and most states are considerably more aggressive than Florida. Crossing a threshold in a state you have never visited creates a real obligation there.
Marketplace sales are not fully handled for you
Marketplace facilitators such as Amazon, Etsy, eBay and Walmart are required to collect and remit Florida sales tax on sales made through their platforms.
That is genuinely helpful, and it creates two traps:
- Your direct sales are still yours. Sell through Amazon and your own Shopify store, and the Shopify sales remain entirely your responsibility.
- You may still need to file. Being registered means filing returns even for periods where the marketplace collected everything. Marketplace sales are reported as exempt, not omitted.
Filing frequency and the collection allowance
The Department of Revenue assigns your frequency based on tax collected: monthly above $1,000 annually, quarterly between $501 and $1,000, and less frequently below that. Returns are due on the 1st and late after the 20th of the following month.
File and pay electronically on time and Florida offers a collection allowance of 2.5% of the first $1,200 due, capped at $30 per return. It is small, but it is free, and it disappears entirely if you file late.
If you should have registered and did not
This is more common than you would think: a business grows, adds a taxable product line, and nobody revisits the registration.
Florida operates a voluntary disclosure program. Approaching the Department before they approach you typically limits the lookback period and waives penalties, though interest still applies. Wait until a notice arrives and none of that is available.
The exposure is worse than most owners assume, because uncollected sales tax comes out of your margin: you cannot realistically go back and invoice two years of customers for tax you failed to charge.
Worth checking this quarter
- Is your point of sale applying the $5,000 surtax cap correctly?
- Do any of your service lines appear on Florida's taxable services list?
- If you lease commercial space, is sales tax on rent being handled correctly?
- Have you crossed an economic nexus threshold in any other state?
- Are your exemption certificates current for wholesale customers?
Twenty minutes on these five questions is a reasonable trade against the alternative, which is finding out during an audit.
Dariel Kingsley
Managing Director · Kingsley Accounting Group
Dariel Kingsley has led Kingsley Accounting Group since 2017. Before founding the firm she managed audit and advisory services at PM+M Accounting LLP, served as Chief Financial Officer at Bekaert & Holland Accounting LLP, and worked in finance at Whitley Penn Accounting LLP. She holds a BS in Accounting and Finance from California State University, Fresno.
