Florida does not have a franchise tax. The state repealed its old corporate franchise tax years ago and now taxes corporations only through the Corporate Income Tax (CIT), charged at 5.5% of net income.1Florida Department of Revenue. Corporate Income Tax Most pass-through businesses, including S-corporations, partnerships, sole proprietorships, and LLCs taxed as partnerships, owe nothing at the entity level.
Why You Still See the Word “Franchise” on Florida Forms
Florida’s corporate return is titled the “Corporate Income/Franchise Tax Return” (Form F-1120). The name is a holdover from when Florida did impose a separate franchise tax on corporate net worth. That tax is gone. The liability on the form is calculated entirely on income, not on net worth, capital stock, or asset value. Any reference to “franchise tax” in a Florida instruction booklet or online portal points to the same Corporate Income Tax described below.
What Corporations Actually Owe: The 5.5% Corporate Income Tax
The CIT starts with a corporation’s federal taxable income, applies Florida-specific adjustments, and subtracts an exemption of up to $50,000 to arrive at the taxable base. The rate is 5.5%, in effect for tax years beginning on or after January 1, 2022.1Florida Department of Revenue. Corporate Income Tax Controlled groups of corporations filing separate Florida returns must share a single $50,000 exemption, divided equally unless all members agree to split it differently.2Online Sunshine. Florida Statutes 220.14 – Exemption
A corporation doing business both inside and outside Florida apportions its income to the state using a weighted three-factor formula: sales count for 50%, with property and payroll each at 25%.3Online Sunshine. Florida Statutes 220.15 – Apportionment of Adjusted Federal Income Only the Florida-apportioned share is taxed.
Who Owes the Tax and Who Doesn’t
The CIT applies to C-corporations and to any artificial entity with corporate characteristics such as perpetual life, transferable ownership interests, and limited liability for all owners. LLCs that elect to be taxed as corporations for federal purposes are included. Foreign corporations (incorporated outside Florida but earning income in the state) are subject to the tax as well.4Online Sunshine. Florida Statutes Chapter 220 – Income Tax Code
Pass-through entities generally owe nothing at the entity level. S-corporations, sole proprietorships, partnerships, and LLCs taxed as partnerships pass their income through to the owners’ personal returns, and Florida has no personal income tax. One narrow exception for S-corporations: if the entity owes federal tax on built-in gains or excess net passive income, it must file Form F-1120 and pay Florida CIT for that year.5Legal Information Institute. Florida Code 12C-1.022 – Returns; Filing Requirement
Filing the Return
Every corporation subject to the tax, or required to file a federal return, must file Form F-1120 annually, even if no Florida tax is due.6Florida Department of Revenue. Instructions for Corporate Income/Franchise Tax Return A smaller corporation doing 100% of its business in Florida with Florida net income of $45,000 or less may qualify for the short Form F-1120A, provided it has no unusual additions or subtractions from federal taxable income, is not part of a consolidated return, and claims no tax credits beyond estimated or tentative payments.7Florida Department of Revenue. Florida Corporate Short Form Income Tax Return
For a calendar-year corporation, the return or extension request is due by the first day of the fifth month after the tax year closes. The Florida Department of Revenue publishes a schedule of due dates for every possible fiscal year-end.8Florida Department of Revenue. Corporate Income Tax Due Dates
If your corporation expects to owe more than $2,500 in Florida CIT for the year, you must make quarterly estimated payments on Form F-1120ES. For tax years ending on a date other than June 30, installments are due by the last day of the 5th, 6th, 9th, and 12th months of the tax year. Tax years ending June 30 pay by the last day of the 4th, 6th, 9th, and 12th months.1Florida Department of Revenue. Corporate Income Tax
Penalties for Missing the Filing
If you owe tax and file late, the penalty is 10% of the unpaid tax for the first month, plus 10% for each additional month or partial month, capped at 50%.9Online Sunshine. Florida Statutes 220.801 – Penalties; Failure to Timely File Returns A corporation five months late on a $20,000 bill would owe a $10,000 penalty on top of the tax.
Even when no tax is owed, failing to file a required return costs $50 per month, up to $300. The requirement is triggered whenever the corporation is also required to file a federal return, so most C-corporations cannot skip the Florida filing simply because they had no taxable income.9Online Sunshine. Florida Statutes 220.801 – Penalties; Failure to Timely File Returns
What “No Franchise Tax” Doesn’t Mean
Operating in Florida still comes with several mandatory state and local obligations outside the CIT. Businesses that sell goods or certain services collect sales tax at the state rate of 6%, plus a county discretionary surtax that varies by location.10Florida Department of Revenue. Florida Sales and Use Tax11Florida Department of Revenue. Florida Reemployment Tax12Florida Department of Revenue. Property Tax – Tangible Personal Property13Online Sunshine. Florida Statutes 196.183 – Exemption for Tangible Personal Property
Every Florida corporation and LLC also owes a separate annual report to the Division of Corporations at Sunbiz.org. Reports not filed by May 1 trigger a $400 late fee, and failing to file by the third Friday in September can result in administrative dissolution of the entity.14Florida Division of Corporations. File Annual Report The annual report is not a tax, but missing it carries consequences that outlast any CIT bill.