In Florida, LLCs do pay taxes, but usually not a state income tax. Florida’s constitution bars a personal income tax, so profits from a default LLC pass through to the owners’ personal returns and face no state-level income tax at all. The LLC still owes federal income tax (paid through the owners), self-employment tax on the owners’ share of earnings, and potentially Florida sales tax, reemployment tax, tangible personal property tax, and an annual report fee. An LLC only owes Florida’s 5.5% corporate income tax if it has elected to be taxed as a C corporation.
Florida State Income Tax on LLCs
Article VII, Section 5 of the Florida Constitution prohibits the state from taxing personal income, and Florida Statute 220.02 carries that prohibition into the state’s income tax code.1Florida Senate. Florida Statutes 220.02 Because single-member LLCs are treated as disregarded entities and multi-member LLCs are treated as partnerships by default, the LLC itself earns no taxable income at the entity level. Profits land on each owner’s personal return, and Florida does not tax them there. A disregarded LLC isn’t even required to file a separate Florida corporate income tax return.2Legal Information Institute. Fla Admin Code Ann R 12C-1.022 – Returns; Filing Requirement
An LLC taxed as an S corporation keeps the same pass-through treatment and also pays no Florida income tax.
When a Florida LLC Does Owe State Income Tax
The one scenario that triggers Florida income tax is a C corporation election. By filing Form 8832 with the IRS, an LLC changes its classification to a corporation for both federal and state purposes.3Internal Revenue Service. About Form 8832, Entity Classification Election Once that election is in place, the LLC files a Florida corporate income tax return and pays the state’s 5.5% tax on net income above $50,000.4The Florida Legislature. Florida Statutes 220.11 – Tax Imposed The same LLC also owes 21% federal corporate income tax on its profits, and any dividends paid to owners get taxed again on the owners’ personal returns. Most small LLCs avoid the election for that reason.
Federal Income Tax by Classification
The IRS taxes every LLC, Florida or otherwise, based on its federal classification.
Single-Member LLCs
A single-member LLC is automatically a disregarded entity. The owner reports business income and expenses on Schedule C of Form 1040 and pays federal income tax at individual rates on the net profit.5Internal Revenue Service. Single Member Limited Liability Companies
Multi-Member LLCs
An LLC with two or more members defaults to partnership treatment.6Internal Revenue Service. LLC Filing as a Corporation or Partnership7Internal Revenue Service. 2025 Instructions for Form 10658Internal Revenue Service. Failure to File Penalty
LLCs Taxed as C Corporations
An LLC that elects C corporation status files Form 1120 and pays 21% federal corporate income tax on profits. Distributions to owners are taxed again as dividends.
LLCs Taxed as S Corporations
For S corporation treatment, the LLC files Form 2553 no more than two months and 15 days after the beginning of the tax year the election should take effect.9Internal Revenue Service. Instructions for Form 2553 For a new LLC that wants S corporation status from day one, the clock starts on the earliest date the LLC had owners, held assets, or began doing business. An S corporation files Form 1120-S by March 15, but profits pass through to owners rather than being taxed at the entity level.10Internal Revenue Service. About Form 2553, Election by a Small Business Corporation Any owner who works in the business must receive a reasonable salary subject to employment taxes.11Internal Revenue Service. S Corporation Employees, Shareholders and Corporate Officers
Self-Employment Tax
Self-employment tax is often the biggest federal tax an LLC owner pays, and Florida’s lack of an income tax does nothing to reduce it. Owners of disregarded entities and partnerships pay it on their share of business earnings.5Internal Revenue Service. Single Member Limited Liability Companies6Internal Revenue Service. LLC Filing as a Corporation or Partnership
The rate is 15.3%, in two parts:
- Social Security at 12.4% on net earnings up to $184,500 in 2026.12Social Security Administration. Contribution and Benefit Base
- Medicare at 2.9% on all net earnings with no cap.
Higher earners pay an additional 0.9% Medicare tax on earnings above $200,000 for single filers or $250,000 for married couples filing jointly, bringing the effective Medicare rate to 3.8% on income above those thresholds. Owners pay both halves of these taxes, usually through quarterly estimated payments, and may deduct half of the self-employment tax on their personal return.
The S corporation election is attractive for profitable LLCs partly because only the owner’s reasonable salary is subject to employment taxes. Distributions above that salary are not, which can save thousands annually on a business with meaningful net income.
The Qualified Business Income Deduction
Owners of pass-through LLCs (disregarded entities, partnerships, and S corporations) may deduct up to 20% of their qualified business income under Section 199A of the Internal Revenue Code.13Office of the Law Revision Counsel. 26 USC 199A – Qualified Business Income The deduction was made permanent by the One Big Beautiful Bill Act, with expanded thresholds taking effect in 2026.
Below the income thresholds, eligible owners simply deduct 20% of qualified business income from taxable income. For 2026, the full deduction is projected to be available to single filers with taxable income below roughly $200,000 and joint filers below roughly $400,000. Above those levels, wage and property limitations phase in. Specified service businesses (law firms, medical practices, consulting firms, and similar fields) lose the deduction entirely once taxable income exceeds the upper phase-in range, projected at about $275,000 single and $550,000 joint for 2026. A minimum deduction of $400 applies starting in 2026 to any taxpayer with at least $1,000 in qualified business income.
For a Florida LLC owner with $150,000 of qualified business income, the full deduction knocks $30,000 off taxable income. The exact benefit depends on wages, qualified property, and business type, so running the numbers is worthwhile.
Quarterly Estimated Tax Payments
LLCs don’t withhold income tax from owner profits, so most owners make quarterly estimated payments to the IRS. The four deadlines for the 2026 tax year are April 15, June 15, September 15, and January 15, 2027.14Taxpayer Advocate Service. Making Estimated Payments Missing them triggers an underpayment penalty based on the IRS’s quarterly interest rate.15Internal Revenue Service. Underpayment of Estimated Tax by Individuals Penalty You generally avoid the penalty if you owe less than $1,000 at filing, or if you’ve paid at least 90% of the current year’s tax or 100% of the prior year’s tax (110% if prior-year adjusted gross income exceeded $150,000).
Other Florida Taxes and Fees
No state income tax doesn’t mean no state obligations. Several other items apply to Florida LLCs depending on what the business does.
Sales and Use Tax
Florida’s state sales tax rate is 6%, with most counties adding a discretionary surtax.16Florida Department of Revenue. Florida Sales and Use Tax An LLC that sells taxable goods or services must register with the Florida Department of Revenue, collect the tax from customers, and remit it. Taxable transactions include retail sales of tangible personal property, rentals, and certain services.17Florida Senate. 2025 Florida Statutes 212.05 – Sales, Storage, Use Tax
Reemployment Tax
LLCs with employees owe Florida’s reemployment tax, the state’s version of unemployment insurance. Only the employer pays it. For 2026, rates range from 0.1% to 5.4% on the first $7,000 of each employee’s annual wages, depending on industry and claims history.18Florida Department of Revenue. Reemployment Tax Rate Information New employers typically start toward the higher end and see their rate drop as they build a clean record.
Tangible Personal Property Tax
LLCs that own business equipment, furniture, or fixtures owe tangible personal property tax to their county. This is a local assessment, not a state tax, but it still has to be filed. You must submit Form DR-405 to your county property appraiser by April 1 each year. The first $25,000 of assessed value is exempt, but you still need to file the return to claim the exemption.
Annual Report
Every Florida LLC files an annual report with the Division of Corporations. The fee is $138.75 if filed on time and jumps to $538.75 for reports received after May 1.19Florida Division of Corporations. LLC Fees Failing to file can lead to administrative dissolution, which strips liability protection until the LLC is reinstated. It isn’t a tax, but it’s a recurring cost every Florida LLC owner needs to track.