Start a business in Florida

Florida really does have no personal income tax. Your LLC's profit lands on your federal return and no Florida return follows it — no state filing, no state rate, nothing. That is the whole of the advantage and it is a large one.

The mistake is the sentence people build on top of it: so there is nothing to file. Florida funds its counties from property, and property here includes the things you bought to work with. If you own furniture, computers, tools, signage, kitchen equipment or leasehold improvements, the county property appraiser assesses them every year and expects a return by 1 April. Add the county business tax receipt, the city one on top of it, and a sales surtax that changes with the delivery address, and Florida turns out to have several small annual obligations instead of one big one.

Forming the company is the easy part and it is covered separately — the Florida LLC page has Sunbiz, the $138.75 annual report due 1 May and the flat $400 late fee, which is the other date worth a calendar entry. Five years of state formation fees comes to $680. What follows is everything that happens after the company exists.

Form DR-405 goes to the property appraiser in the county where the equipment sits, not to the Department of Revenue and not to Tallahassee. It lists what the business owns, when you bought it and what you paid. The appraiser depreciates it, applies the county millage, and sends a bill in November with the rest of the property taxes.

For most small businesses the bill is nothing, because the first $25,000 of assessed value is exempt. But the exemption is not automatic in the way a standard deduction is. You get it by filing an initial DR-405 that claims it. File once, come in under $25,000, and the appraiser will generally stop requiring a return in later years — but that waiver flows from having filed, and it can be lost if the business grows, moves county or buys enough that the appraiser reinstates the requirement.

Florida has no general state business licence. What it has instead is the local business tax receipt — and you usually need two of them. The county issues one. If your address falls inside city limits, the city issues a second, and the two are unrelated: separate applications, separate fees, separate offices.

Fees are set by ordinance rather than by the state, so they vary, but roughly $25–$150 at county level and something similar again at city level is the shape to budget for. The receipt year runs 1 October to 30 September, which has nothing to do with your formation date, your fiscal year or the calendar. A business that opens in August buys a receipt that expires six weeks later.

The state rate is 6% and the county discretionary sales surtax is up to 2% on top, giving a typical 7%. The part that trips up anyone shipping or delivering across the state is that the surtax is set by the county where the goods are delivered, not where your business sits. Two invoices sent on the same day to two customers can carry two different tax rates.

The spread is real: Citrus and Collier levy no surtax at all, so a delivery there is taxed at 6%, while Hamilton is at the 2% ceiling. Most professional services are outside the tax entirely, but commercial cleaning, pest control, detective and security services are in it — so a cleaning company charges tax on its labour and an accountancy practice does not.

Registration for sales tax is free online through the Florida Business Tax Application, $5 on paper. Do it before the first taxable sale rather than after — the obligation to collect starts with the sale, not with the registration, and the difference comes out of your margin.

A non-construction Florida employer needs workers' compensation cover at four or more employees, counting corporate officers and LLC members in the total. Three people can work as a business here with no premium at all, which is a meaningful saving against Maryland or Kentucky, where the first hire triggers it.

Construction is a different regime, and it is the one that catches people. One employee triggers coverage — and the owner counts as that employee unless a formal exemption is filed on form DWC-250. A sole trader roofer who takes on one labourer needs a policy covering two people, and if the exemption paperwork was never filed, covering himself as well. Agriculture sits somewhere between the two at six regular or twelve seasonal workers.

Reemployment tax registration goes to the Department of Revenue in the month after the quarter in which employment starts. Liability begins at $1,500 of wages in a calendar quarter, or one employee for any part of a day in 20 different weeks. The taxable wage base is the first $7,000 per employee per year and the new-employer rate is 2.7% until ten quarters of history exist — so roughly $189 a year per employee at the start, which is small enough that people forget to register and large enough that the state notices.