Florida Communications Services Tax: Rates, Exemptions, Filing

The Florida communications services tax is a state and local tax on phone, cable, satellite, VoIP, and other transmission services, charged on the customer’s bill and remitted monthly by the provider. The state portion is 7.44% for most services, and local rates set by each county and municipality add anywhere from roughly 1.2% to over 7% on top. Providers register with the Florida Department of Revenue, collect the tax as a separate line item, and file Form DR-700016 by the 20th of each month.

What Services Are Taxed

The CST applies to any service that transmits voice, data, audio, video, or other signals through an electronic medium, whether by cable, satellite, microwave, radio, or any method developed later. VoIP is explicitly included regardless of how the FCC classifies it. Cable television and direct-to-home satellite video also fall within the tax.¹

What Isn’t Taxed

Several categories sit outside the CST entirely:

Internet access, under both Florida’s definition and the federal Internet Tax Freedom Act, which Congress made permanent in 2016.²
Information services that generate, store, or process content rather than transmit it.
Installation and maintenance of wiring or equipment on a customer’s premises.
Sales or rentals of tangible equipment, which fall under sales tax in Chapter 212 instead.
Directory and other advertising.
Billing, collection, bad check, and late payment charges.

The billing and collection carve-out catches providers off guard. Charging CST on those line items is an error that will surface in an audit.¹

The Rate Stack

At the state level, two components combine on most communications services:

State CST of 4.92% of the sales price.
Gross receipts tax of 2.52%, imposed under Chapter 203 but administered alongside the CST.

Together that comes to 7.44%.³ Direct-to-home satellite carries its own state rate of 9.07% instead of the standard 4.92%.⁴

Local rates are set by each county and municipality. Charter counties and municipalities can levy up to 5.1% (or 4.98% if they also levy permit fees under Section 337.401). Noncharter counties are capped at 1.6%. Small add-ons are allowed in either case.⁵ A customer’s combined state-and-local burden can therefore vary substantially from one address to another. The Department of Revenue publishes a searchable rate table keyed to the service address.⁶

Which Local Rate Applies

For wired services, the local rate follows the customer’s service address. If the address sits inside a municipality, the city rate applies; if it sits in an unincorporated area, the county rate applies.⁷

Mobile service is sourced differently. Under the federal Mobile Telecommunications Sourcing Act, incorporated into Florida law, the local rate for wireless charges is set by the customer’s “place of primary use,” meaning the residential or business street address on file with the provider. That address must sit within the provider’s licensed service area. Wireless providers apply a single local rate per customer rather than tracking where individual calls originate.⁷

Private communications services with channel termination points in more than one jurisdiction follow allocation formulas that split the charges based on where those points are located.

Who Is Exempt

Chapter 202 provides several exemption categories. A wrongly claimed exemption lands back on the provider in an audit, so documentation matters as much as eligibility.

Residential landline service: the separately stated price of communications services sold to a residential household is exempt from the state CST and certain gross receipts components. The exemption does not reach mobile, video, or direct-to-home satellite service, and it does not apply to residences used as transient lodging such as hotels or short-term rentals.
Federal government: sales to federal agencies or instrumentalities, and to entities federal law shields from state taxation, are fully exempt.
State and local government: sales to the state, counties, municipalities, or political subdivisions are exempt when the government entity pays the provider directly. A government employee paying by personal card and seeking reimbursement later does not qualify.
Qualifying nonprofits: homes for the aged, religious institutions with an established physical place of worship, and educational institutions are exempt if the organization holds a 501(c)(3) determination.
Resale: a provider buying communications services to resell to its own customers can purchase tax-free with the proper documentation.

⁸

Resale Certificates

To claim the resale exemption, the buyer must hold a valid Florida Annual Resale Certificate for Communications Services Tax. The certificates expire December 31 each year, and the Department issues new ones automatically to registered, active dealers. The selling dealer must document each exempt resale transaction. Keeping a copy of the buyer’s current annual certificate on file covers every sale to that buyer during the calendar year. The Department also offers online verification that returns a Transaction or Vendor Authorization Number for a given certificate.⁹

Registering and Collecting

Any provider selling communications services in Florida must register with the Department of Revenue as a dealer. Once registered, the dealer collects the applicable state and local taxes from each customer and shows the tax as a separate line item on invoices.⁵

If a Florida customer buys taxable communications services from an out-of-state provider that is not registered, the customer owes the tax directly to the Department, the same as if the purchase had come from a Florida dealer.⁵

Filing Deadlines and the Collection Allowance

Dealers file on Form DR-700016, the Florida Communications Services Tax Return. The return and payment are technically due on the first day of the month after the services were sold, but to avoid penalty and interest, both must be received or postmarked by the 20th of that month.¹⁰ Returns break out taxable sales and any adjustments or credits by jurisdiction.

Dealers who file complete, on-time returns receive a collection allowance of 0.75% of the tax due. The allowance disappears entirely if the return or payment is late, and the Department can deny it when a return is incomplete or disorganized enough that it can’t be readily verified.⁵ On a large remittance, 0.75% is real money.

Late Penalties

Missing the deadline costs 10% of the unpaid tax if the return is fewer than 30 days late. Another 10% is added for each additional 30-day period or fraction of one, up to a maximum of 50% of the unpaid tax.¹¹ Interest runs on top. An unaddressed liability grows quickly.

Bundled Services

When taxable communications services are sold with nontaxable items for a single price, the default rule taxes the entire charge. The only way to spare the nontaxable portion is to reasonably identify those charges in your books and records. A package combining phone service and internet access, for example, requires an internal allocation documenting each component’s value, even if the customer sees one bundled price.¹² Unbundling for CST purposes doesn’t necessarily mean the separated charges escape tax altogether; they may still be subject to Florida’s general sales and use tax under Chapter 212.

Records and Audits

The Department’s standard audit lookback is three years. If a dealer failed to file returns or filed one or more substantially incorrect returns during that window, the Department can extend the audit further back.¹³

Keep records of every CST transaction for at least three years. That means invoices, billing records, exemption certificates, resale authorization numbers, and anything documenting claimed exemptions or credits. Clean records close audits faster than any argument.

The E911 Fee Is Separate

Florida also imposes an E911 fee of $0.40 per month per service identifier on voice communications services, with prepaid wireless paying the same amount per retail transaction. Providers collect it alongside the CST, but the fee itself is not part of the CST tax base or any other state or local tax.¹⁴

Disputing an Assessment

If you disagree with a proposed assessment, refund denial, or the Department’s interpretation of the law, the first step is a written protest filed within the window stated on the notice, typically 60 days from the date of the proposed assessment or refund denial. The protest must meet the requirements in Florida Administrative Code Rule 12-6.003.¹⁵

If informal protest doesn’t resolve the dispute, the remaining options are filing an action in circuit court or petitioning for a formal hearing under Chapter 120. Missing the protest deadline closes the informal process and leaves only those two routes.¹⁶ CST disputes often turn on how a specific service is classified, whether an exemption was properly documented, or how a bundled transaction should have been allocated, so bringing in counsel before the protest deadline passes is usually worth the cost.

1
Florida Senate. Florida Code Chapter 202 – Communications Services Tax Simplification Law
2
Congress.gov. H.R.235 – Permanent Internet Tax Freedom Act
3
Florida Department of Revenue. Florida Communications Services Tax Overview and Compliance Guide
4
Florida Senate. Florida Code Chapter 202 Section 12 – Tax Rate
5
Online Sunshine. Florida Code Chapter 202 – Communications Services Tax Simplification Law
6
Florida Department of Revenue. Communications Services Tax Rate Table – Address Lookup
7
Florida Senate. Florida Code Chapter 202 Section 19 – Local Communications Services Tax
8
Online Sunshine. Florida Code Chapter 202 Section 125 – Exemptions
9
Florida Department of Revenue. Communications Services Tax
10
Cornell Law Institute. Florida Admin Code 12A-19.020 – Tax Due at Time of Sale
11
Online Sunshine. Florida Code Chapter 202 Section 28 – Credit for Collecting Tax; Penalties
12
Florida Department of Revenue. Instructions for Completing the Florida Communications Services Tax Return
13
Florida Department of Revenue. What to Expect from a Florida Sales and Use Tax or Communications Services Tax Audit
14
Florida Senate. Florida Code Chapter 365 Section 172 – Emergency Communications
15
Florida Department of Revenue. Informal Dispute Resolution
16
Florida Department of Revenue. Protest Procedures