State & Local Tax (SALT) Strategy for Florida Businesses

State & Local Tax (SALT) Strategy for Florida Businesses

Florida is often described as a no-tax state, and for individuals that is largely true — there is no personal income tax. But Florida operates a corporate income tax, a sales and use tax regime that ranks among the most complex in the country, communication-services taxes, documentary stamp taxes on real estate and lending, and a robust nexus enforcement program for out-of-state sellers. John Montague, Esq. advises Florida businesses, multistate sellers, and out-of-state entities doing business in Florida on the full state and local tax landscape.

Why SALT Counsel Matters in Florida

Florida’s tax simplicity is overstated for businesses. Sales tax audits in Florida are aggressive and proceed on a transactional-sampling basis that can produce assessments orders of magnitude larger than the original transaction. Communication-services tax applies to telecommunications, video, and increasingly to streaming and SaaS-adjacent revenue under expansive definitions. Nexus enforcement post-Wayfair has expanded substantially for remote sellers. And Florida’s documentary stamp tax on lending transactions (the ‘doc stamp’) is a frequent surprise in M&A and refinancing.

Florida Tax Areas We Handle

Sales and Use Tax

Nexus analysis, taxability determinations, exemption certificate management, audit defense, voluntary disclosure agreements (VDAs), and refund claims for over-collected or over-remitted tax.

Corporate Income Tax

Apportionment disputes, throwback/throwout rules, Section 220.13 modifications, combined-reporting questions, and credit eligibility (research and development credit, capital investment credit, brownfield credits).

Communications Services Tax

Taxability of telecommunications, VoIP, video streaming, and digital-services revenue under Florida’s expansive CST framework.

Documentary Stamp & Intangibles Tax

Doc stamp planning for M&A, intercompany lending, real-estate refinancing, and assignment of mortgages.

Local Business Tax Receipts

County and municipal business-tax compliance for businesses operating in multiple Florida jurisdictions.

Common Triggers for SALT Engagement

Most clients engage us at one of five inflection points: (1) receipt of a Florida Department of Revenue audit notice or DR-840A nexus questionnaire; (2) M&A diligence where unpaid sales tax becomes a deal issue; (3) launching a new product or service whose taxability is ambiguous; (4) expanding into Florida from another state and unsure whether nexus has been triggered; or (5) closing a transaction that involves real estate, lending, or intercompany note transfers where doc stamp may apply.

Practical Guidance

Three points we emphasize. First, voluntary disclosure agreements with the Florida DOR are powerful — they generally cap the look-back to three years (versus an open statute when nexus exists but no return has been filed) and waive most penalties. Coming forward voluntarily is almost always better than being found. Second, exemption certificates are gold; we routinely see Florida businesses with valid exempt sales lose at audit because their certificates were missing, expired, or improperly executed. Third, in M&A, sales-and-use tax exposure is one of the top three indemnity drivers — get a SALT diligence review on every deal involving a target with Florida operations.

Frequently Asked Questions

Does Florida have a corporate income tax?

Yes. Florida imposes a corporate income tax (currently 5.5%) on corporations doing business in the state. LLCs taxed as partnerships are generally not subject to it, but LLCs that elect corporate tax status are. The exemption thresholds and apportionment formulas have their own complexity.

What is a Florida sales tax voluntary disclosure agreement?

A VDA is a program offered by the Florida Department of Revenue allowing a non-filer who voluntarily comes forward to limit look-back to three years and avoid most penalties. It is the right tool when nexus exists but compliance has lagged. Disclosure must precede any contact from the DOR.

My business has no physical presence in Florida — do I have nexus?

After Wayfair, economic nexus alone can trigger sales-tax registration obligations. Florida’s threshold is $100,000 in taxable remote sales in the prior calendar year. Income-tax nexus is a separate (and harder) analysis. Many remote sellers are surprised to discover Florida nexus.

What is Florida documentary stamp tax and when does it apply?

Doc stamp applies at $0.35 per $100 of obligation on notes, mortgages, and certain promissory instruments executed or recorded in Florida, and at $0.70 per $100 of consideration on deeds (with Miami-Dade differences). It is a real cost in lending and real-estate transactions and is often missed in deal modeling.

Related Practice Areas

Federal Tax Controversy & IRS Defense · Real Estate Investment & 1031 Exchanges · M&A Due Diligence · Outside General Counsel