Sales and Use Tax Exemptions | Sales Tax | FL Corporate Income Tax | Homestead Exemption | Millage Rates | Ad Valorem IPPT | Communications Tax | Occupational License Tax | Tax Table | Impact Fees
Taxes
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Florida has a variety of advantages that make it a profitable site for nearly every type of business. Progressive legislation continues to ensure that Florida will remain a magnet for new and expanding businesses.
NO corporate income tax on limited partnerships
NO corporate income tax on subchapter S-corporations
NO state personal income tax, guaranteed by constitutional provision
NO corporate franchise tax on capital stock
NO state-level property tax assessed
NO property tax on business inventories
NO property tax on goods-in-transit for up to 180 days
NO sales and use tax on goods manufactured or produced in Florida for export outside the state
NO sales tax on purchases of raw materials incorporated in a final product for resale, including non-reusable containers or packaging
NO sales and use tax on co-generation of electricity
Sales & Use Tax Exemption
- Machinery and equipment used by a new or expanding Florida business to manufacture, produce or process tangible personal property for sale
- Labor, parts and materials used in repair of and incorporated into machinery and equipment
- Electricity used in the manufacturing process
- Certain boiler fuels (including natural gas) used in the manufacturing process
- Semiconductor, defense and space technology-based industry transactions involving manufacturing equipment
- Machinery and equipment used predominantly in research and development (effective July 1, 2006)
- Labor component of research and development expenditures
- Commercial space activity — launch vehicles, payloads and fuel, machinery and equipment for production
- Aircraft parts, modification, maintenance and repair, sale or lease of qualified aircraft
- Production companies engaged in Florida in the production of motion pictures, made for television motion pictures, television series, commercial advertisements, music videos or sound recordings
Source: Enterprise Florida; www.eflorida.com; 2008
Sales Tax
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Florida law provides that each sale, admission charge, storage, or rental is taxable unless the transaction is specifically exempt. Florida's general sales tax rate is 6%, however there is an established "bracket system" for collecting sales tax on any part of each total taxable sale that is less than a whole dollar amount. Additionally, Polk County has a discretionary sales surtax of 1%. To compute the Florida sales tax rate for Polk County, you add the county imposed discretionary sales surtax rate (1%) to the general sales and use tax rate (6%) for a total of 7% in Polk County.
Polk County saw a .5% increase January 2004 for new school construction. An additional .5% increase was effective January 2005 to address indigent health care in Polk County. These two increases combined brought the total surtax rate to 1%.
Florida Corporate Income Tax
Tax Base and Rate
Florida corporate income tax liability is computed using federal taxable income, modified by certain Florida adjustments, to determine adjusted federal income.
- A corporation doing business within and without Florida may apportion its total income. Adjusted federal income is apportioned to Florida using a three-factor formula. The formula is a weighted average, designating 25 percent each to factors for property and payroll, and 50 percent to sales.
- Nonbusiness income allocated to Florida is added to the Florida portion of adjusted federal income.
- An exemption of up to $5,000 is subtracted to arrive at Florida net income.
- Tax is computed by multiplying Florida net income by 5.5 percent.
Source: Department of Revenue; www.myflorida.com; 2008
Homestead Exemption
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Florida law provides a $25,000 homestead exemption on ad valorem taxes covering property owned and permanently lived in by a Florida resident. This means that the first $25,000 of the assessed value of homesteads shall be exempt from ad valorem taxes, provided the individual meets the qualifications and makes applications prior to March 1. An additional homestead exemption went into effect January 2008.
What is the additional homestead exemption?
The Additional Homestead Exemption (AHE) increases the homestead exemption by exempting the assessed value between $50,000 and $75,000. This exemption does not apply to school district taxes. This means, that you will receive NO BENEFIT from the AHE if your assessed value is less than $50,000. You will, however continue to receive your existing homestead exemption.
When does the additional homestead exemption take affect?
The homestead exemption is retroactive to January 1, 2008
Do I need to apply for this additional exemption?
No, if you have an existing homestead exemption, the additional exemption will be applied automatically. This is also true if you are filing a new homestead exemption application for 2008.
Source: www.polkpa.org; 2008
Millage Rates
| Millage Rate | ||
| Comparison (per $1,000 of assessed valuation) | ||
| Polk | Lakeland | |
|---|---|---|
| 2003 | 17.066 | 2.995 |
| 2004 | 16.305 | 3.545 |
| 2005 | 16.305 | 3.545 |
| 2006 | 16.805 | 3.545 |
| 2007 | 15.0113 | 3.2296 |
For a complete list of City and County Millage rates click here.
City of Lakeland
Tax Rate Millage/Assessment: $3.2296 mills on 1005 valuation (per thousand of valuation).
- Real Property – residential, commercial and industrial real estate
- Business Personal Property – machinery, equipment, fixtures, merchandise, etc…
http://www.polktaxes.com/propertytax/Millage.asp
Ad Valorem
The Tax Collector & The Property Taxation Process
The Tax Collector collects all ad valorem taxes levied in Polk County. The Tax Collector also collects non-ad valorem assessments.
Ad valorem taxes are levied annually based on the value of real property and tangible personal property. Ad valorem assessments are made each January 1st. Real property is defined as land, buildings, fixtures, and all other improvements to the land.
Non-ad valorem assessments are also made on real property for essential services, such as fire protection and garbage collection.
The ad valorem tax roll is certified to the Tax Collector by the Property Appraiser. The Property Appraiser determines the assessed value of property.
The County Commission, School Board, municipalities, and other ad valorem taxing bodies set the millage rates for properties within their boundaries. The millage rate is the dollar amount to be paid in taxes for every $1,000 of appraised valuation.
Example: If the taxable value of your home is $75,000 and your city's millage rate is 7.2 mills, then the taxes due would be calculated as follows:
Taxable Home Value of $75,000 1,000 = 75
75 x 7.2 mills = $540 in City Taxes Due
Non-ad valorem assessment rolls are certified to the Tax Collector by local governing boards or non-ad valorem assessing authorities, such as the Solid Waste Authority, fire district and water control districts.
The Tax Collector consolidates the certified ad valorem and non-ad valorem tax rolls and mails tax notices to property owners. Ad valorem taxes and non-ad valorem assessments are due beginning November 1st or soon after the tax roll is certified.
Tax notices are mailed October 31st. Florida law makes taxpayers responsible for knowing that their property taxes are due each year. Ad valorem taxes and non-ad valorem assessments become delinquent on April 1st.
A Model Property Tax System "Checks and balances protects taxpayers!"
Floridians have established a property tax system that incorporates a structure of checks and balances to protect taxpayers from favoritism, abuse and corruption.
Under this system, three distinct and separate functions are established:
- Levy Of Taxes
- Appraisal Of Property
- Collection Of Taxes
The levying of property taxes is performed by the various taxing authorities, such as the county commission, a municipality, or school board, etc. The taxing authority determines the millage rate (rate of taxes), which are applied to your property.
The appraisal of property is performed by the Property Appraiser, who is responsible for determining the value of your property (including exemptions).
Finally, the system of checks and balances is completed by the collection of property taxes, which is performed by the Tax Collector. The Tax Collector obtains the taxing authority's millage rate and the appraised value of your property as determined by the Property Appraiser. After processing this information, the tax collector mails out tax bills, then collects and distributes the property taxes due.
Since the essential elements of our property tax system are governed by separate and independent governmental entities, there is in place a basic framework of safeguards to help insure the public trust.
Source: www.polktaxes.com; 2008
Intangible Personal Property Tax (IPPT)
Beginning January 1, 2007, individuals, married couples, personal representatives of estates, and businesses are no longer required to file an annual intangible personal property tax return reporting their stocks, bonds, mutual funds, money market funds, shares of business trusts, and unsecured notes. The Legislature has repealed the annual tax on these properties.
The last annual intangible tax return that these taxpayers were required to file was the 2006 return that was due by June 30, 2006. Any intangible taxes owed to the State for that return or prior years are still due.
Not all intangible taxes have been repealed. The intangible tax on leases of government-owned real property and the one-time intangible tax on notes secured by a mortgage on Florida real property are still in effect.
Source: Department of Revenue, www.myflorida.com; 2008
Communications Tax
What is Taxable?
Communications services include telecommunications, cable, direct-to-home satellite, and related services. This definition includes voice, data, audio, video, or any other information or signals, including cable services, transmitted by any medium.
Some examples of services subject to the tax are:
- Local, long distance, and toll telephone
- Cable television
- Direct-to-home satellite
- Mobile communications, including detailed billing charges
- Private line services
- Pager and beeper
- Telephone charges made by a hotel or motel
- Facsimiles (FAX), when not provided in the course of professional or advertising service
- Telex, telegram, and teletype
What is Exempt?
Dealers should not collect taxes on exempt sales of communications services. Exempt sales include:
- sales for resale
- sales to Federal agencies, the state, any county or municipality, or other political subdivision;
- sales to religious and educational organizations with 501(c)(3), I.R.C. status;
- sales to homes for the aged with 501(c)(3), I.R.C. status and that meet certain provisions.
Source: Department of Revenue, www.myflorida.com; 2008
Occupational License Tax
City of Lakeland
The City of Lakeland requires all businesses located and/or operating inside city limits of Lakeland to pay an annual occupational tax. A receipt for payment of the Occupational Tax is commonly referred to as an Occupational "License." An individual or business that pays the Occupational Tax is only granted the privilege of doing business within the city limits. Payment of such does not constitute the approval of any governing authority responsible for overseeing and/or regulating a trade, practice, activity
or service, etc.
Most license fees are based on square footage, # of workers and/or a category of profession. License fee determined after completion of application with the Occupational License Office. If a business location address is inside the city limits, a City and a Polk County Occupational License is required.
Minimum Fee: $52.50
Maximum Fee: $5,250
Tax Rate for Workers: $11.03
| Tax Rate for Square Footage | |
| Range | Flat Fee |
| 0 - 100 sq. ft. | $5 |
| 101-500 sq ft. | $20 |
| 501 - 1000 sq. ft. | $40 |
| 1,001 - 2,500 sq. ft. | $75 |
| 2,501 - 5,000 sq. ft. | $100 |
| 5,001 sq. ft. and over | Variable Fee $.02 per foot |
If the square footage of the business exceeds 5,000 sf, multiply the total square footage by variable fee.
Definition of Square Footage:
The square footage dimensions of all buildings utilized by the business and in the instance of businesses which utilize outside or uncovered area for the display or demonstration of merchandise or services, shall include such display or demonstration area.
Definition of Worker:
The number of workers shall be determined by the total number of paychecks for all full- time and part-time workers during the previous calendar year divided by the number of pay periods in that calendar year, plus the total number of IRS 1099 forms issued workers during the previous calendar year. Those workers who pay a separate fee as a licensed professional are exempt from this calculation. Note: if calculation results in a fraction, round down to the nearest whole number. Do not include vendors.
Source: City of Lakeland, www.lakelandgov.net; 2008
Polk County
Generally, the County Local Business Tax ordinance requires all businesses located and/or operating in Polk County to obtain an annual County Local Business Tax Receipt.
| Class "A", Non-State Regulated Business, Profession, or Occupation - Annual Cost: $30 This classification is for all businesses, professions, or occupations which are not required to hold any license, certification, or registration with any branch, department, agency or authorized licensing board of the State of Florida. |
|
Class "B", State Regulated Business, Profession or Occupation - Annual Cost: $55 This classification includes all businesses, professions, and occupations for which a license, certification, or registration is required by any branch, department, agency or authorized licensing board of the State of Florida. Note: Proof of state license, registration or certification may also be required prior to issuance of an occupational license. |
|
Class "C", Declared Business, Profession or Occupation - Annual Cost: $300 This classification includes all specified businesses, professions, and occupations for which a declaration shall be published by the Tax Collector upon approval of application and receipt of tax payment. The declaration shall consist of the business name, owner name, location, telephone number, and activity. Specified businesses, professions, and occupations are as follows: |
1) Special Event - Any transient or temporary entertainment such as fairs, circuses, carnivals, festivals and outdoor or tented entertainment events.
2) Stall Market - A market place where transient businesses, professions, and or occupations engage in commerce.
3) Casual Loan Operation - Those who act as pawn brokers or those who provide check cashing loan services.
4) Fortune Telling - Those who are fortune tellers, clairvoyants, soothsayers, tarot card readers, palm readers, or any other such practice.
5) Graphic Entertainment - Those which provide a live display of adult oriented nude or sexually suggestive entertainment.
6) Extreme Entertainment - Any dance and/or concert which is performed outside the confines of a recognized dance hall, restaurant, night club, civic club, community facility, convention hall or government facility.
7) Fireworks - Any manufacturers, distributors, wholesalers, or retailers of fireworks or sparklers as defined in Chapter 791, Florida Statutes.
Source: www.polktaxes.com 2008
Tax Table
| Florida Tax | |
| Corporate Income Tax | 5.5% |
| Sales Tax | 6.0% |
| Gross Receipt Tax | 2.37% |
| Unemployment Tax (varies) | 2.7% |
| Communication Services Tax | 7.03% |
| Intangible Tax - 1 mill per $1000 of accessed valuation | |
|---|---|
Unemployment Tax - Only taxable wages that are reported by the end of the quarter immediately preceding the quarter for which the rate is calculated can be used in the tax rate calculation. When a new employer becomes liable for the payment of tax, the tax rate is .0270 (2.7 percent) and will remain that until the employer has reported for 10 quarters (11 quarters in some cases). The account will then be rated by dividing the total benefits charged to the account (6 quarters) by the taxable payroll reported for the first 7 of the last 9 quarters immediately preceding the quarter for which the rate is effective. The one exception would be those employers liable by succession and who choose to accept the tax rate of the predecessor with the accompanying responsibility of paying any outstanding indebtedness due. At that time, a tax rate will be calculated based on the employment record and the rating factors, which are built into the Unemployment Compensation Law. The maximum tax rate allowed by law is .0540 (5.4 percent), except for employers participating in the Short Time Compensation Program. Prior to the applicable year, rate notices are mailed to all employers that have a tax rate. An appeal of the tax rate must be made within 20 days from the date of notification (date printed on the rate notice).
Florida Communications Service Tax - The tax includes a state rate of 6.8 percent plus a gross receipts tax rate of 2.37 percent, for a combined state communications services tax rate of 9.17 percent. Each local taxing jurisdiction may add its own local tax rate on communications services.
Source: Florida Department of Revenue, 2008.
Impact Fees
Please refer to the Impact Fee Guide & Procedures Manual for the City of Lakeland and the Impact Fee Schedule for Lakeland/Polk County.
http://www.lakelandgov.net/commdev/planning/impactfees.html