Federal taxes: pass-through by default
The IRS treats an LLC according to how many owners it has, unless you choose otherwise:
- One owner: a "disregarded entity". Profit goes on your personal return (Schedule C for most businesses).
- Two or more owners: a partnership. The LLC files Form 1065 and each owner receives a Schedule K-1.
- By election: an LLC can choose to be taxed as an S corporation (Form 2553) or a C corporation (Form 8832).
Owners of pass-through LLCs generally pay self-employment tax on their share of the profit.
Florida income taxes
Florida does not tax personal income, so pass-through profit from your LLC is not taxed by the state. Florida's corporate income tax, at 5.5%, applies only if your LLC elects to be taxed as a C corporation, and even then there is an exemption for the first part of taxable income.
Sales and use tax
If you sell taxable goods or services in Florida, you must register with the Florida Department of Revenue before you start and collect sales tax. The state rate is 6%, and most counties add a discretionary surtax.
Payroll: reemployment tax
If you hire employees in Florida, you register for reemployment tax (Florida's unemployment insurance tax) with the Department of Revenue, in addition to federal payroll taxes.
Local taxes
- Local Business Tax Receipt: an annual tax from your county and often your city for the right to do business there.
- Tangible personal property tax: businesses file a return with the county property appraiser for equipment and furniture. An exemption covers the first part of the value.
A note on elections
Choosing S corp or C corp taxation changes how much you pay and what you file. It is a decision to make with a CPA, based on your numbers. We don't give tax advice.
Forming in another state
This page covers Florida. We form LLCs in other states too, and fees and annual reports vary by state: see our LLC cost by state table.
Frequently asked questions
Does a Florida LLC pay state income tax?
Not by default. Florida has no personal income tax. Only LLCs that elect C corporation taxation pay Florida corporate income tax.
Do I need to register for Florida sales tax?
Only if you sell taxable goods or services in Florida. Registration is with the Florida Department of Revenue before you start selling.
This page is general information, not legal or tax advice. For your specific situation, talk to a licensed attorney or CPA.