Florida has no state income tax on individuals. Wages, salaries, tips, capital gains, dividends, interest, rental income, Social Security, pensions, and self-employment earnings all escape state-level taxation, and employers do not withhold any state income tax from paychecks. You still owe federal income tax to the IRS on everything the federal code treats as taxable, and if you own a corporation doing business in Florida, that entity faces a separate corporate income tax. The state funds itself largely through sales tax and property taxes instead.
Why the No-Income-Tax Rule Is Hard to Change
Florida’s prohibition is not an ordinary statute that a future legislature could repeal. It sits in the state constitution. Article VII, Section 5 bars the state, or any authority under it, from levying a tax on the income of natural persons who are residents or citizens, except to the extent such a tax could be credited against similar federal taxes.1Florida Senate. Florida Constitution Because the federal government currently offers no such credit, the effective rate is zero. Undoing it would require a constitutional amendment approved by Florida voters, which is a much higher bar than a routine tax bill.
The protection covers every category of personal income. Retirees pay no state tax on pension distributions or Social Security benefits. Investors pay no state tax on capital gains or dividend income. Freelancers and independent contractors file no state estimated payments on their business earnings. The practical result for most residents is a simpler tax year: one federal return, no state return.
Taxes You Still Pay as a Florida Resident
Living in a no-income-tax state does not mean living tax-free. Florida leans on other revenue sources, and some of them hit harder than they would elsewhere.
Sales and Use Tax
The statewide general sales tax rate is 6%, applied to most retail sales of tangible goods and certain services.2Florida Department of Revenue. Florida Sales and Use Tax Counties can add a discretionary surtax ranging from 0.5% to 1.5%, pushing the combined rate as high as 7.5% in some locations.3Florida Department of Revenue. Discretionary Sales Surtax Unprepared groceries are exempt. Residential electricity is taxed at a higher 6.95% rate.
Use tax catches purchases made outside Florida where the seller did not collect the state sales tax. If you order furniture from a vendor in another state and no Florida tax is charged, you technically owe use tax at the same rate when the item arrives.
Property Tax and the Homestead Exemption
Property taxes are the other main pillar of Florida’s budget, especially for counties and school districts. The homestead exemption removes up to $25,000 from the assessed value of a primary residence for all tax purposes, plus an additional $25,000 from assessed value above $50,000 for every levy except school district taxes.4The Florida Legislature. Florida Statutes 196.031 – Exemption of Homesteads To qualify, you must own the property and live there as your permanent residence by January 1, then file with your county property appraiser by March 1. Miss the deadline and you lose the exemption for the entire year.
Once the exemption is in place, Save Our Homes caps annual increases in the assessed value at 3% or the change in the Consumer Price Index, whichever is lower.5The Florida Legislature. Florida Statutes 193.155 – Homestead Assessments Long-term owners can accumulate meaningful savings in a rising market. The assessment resets to market value when you sell and buy again.
Real Estate Transfer Taxes
Buying or selling property triggers documentary stamp taxes. On deeds, the rate is 70 cents per $100 of consideration in every county except Miami-Dade, which charges 60 cents per $100 plus a 45-cent surtax per $100 on most transfers (the surtax does not apply to single-family dwellings).6Florida Department of Revenue. Florida Documentary Stamp Tax A $400,000 home purchase outside Miami-Dade generates $2,800 in doc stamps. Promissory notes are taxed at 35 cents per $100,7The Florida Legislature. Florida Statutes 201.02 – Tax on Deeds and Other Instruments and a nonrecurring intangible tax of 2 mills (0.2%) applies to mortgages secured by Florida real property.8Florida Senate. Florida Statutes Chapter 199 – Intangible Personal Property Taxes These costs land at closing and are easy to forget when budgeting.
Corporate Income Tax Is Separate
The constitutional ban protects only natural persons. Corporations and other artificial entities conducting business, earning income, or simply existing in Florida fall under Chapter 220 of the Florida Statutes.9The Florida Legislature. Florida Code Chapter 220 – Income Tax Code The standard rate is 5.5% of net income, though recent taxable years have carried a temporarily reduced rate of 4.458%.10Florida Department of Revenue. Florida Tax and Interest Rates The first $50,000 of net income is exempt,11Florida Senate. Florida Statutes 220.14 – Exemption so smaller corporations with modest profits often owe nothing.
Every corporation doing business or earning income in Florida must file Form F-1120 each year, even when no tax is due. The return is generally due on the first day of the fifth month after the close of the tax year, which is May 1 for calendar-year filers.12Florida Department of Revenue. Florida Corporate Income Tax S corporations with a valid federal election generally owe no Florida corporate tax and are not required to file a corporate return.
No Estate or Inheritance Tax
Florida imposes no state estate tax and no inheritance tax. The same constitutional language that blocks personal income tax restricts estate taxes to amounts creditable against federal levies, and because the federal government phased out that credit, Florida’s effective rate has been zero since 2005.1Florida Senate. Florida Constitution
Federal estate tax still applies to large estates regardless of state. For deaths in 2026, the filing threshold is $15,000,000, with a top federal rate of 40% on the excess.13Internal Revenue Service. Estate Tax If you own real estate in a state that does impose its own estate or inheritance tax, that state can tax the property located within its borders no matter where you lived.
Becoming a Florida Resident for Tax Purposes
Buying a condo in Miami does not, by itself, make you a Florida resident in the eyes of the state you came from. High-tax states, particularly New York and New Jersey, scrutinize whether you have genuinely shifted your permanent home. Get this wrong and your former state can keep taxing your income even though you spend most of the year in Florida.
File a Declaration of Domicile
Florida Statute 222.17 lets any person who has established a domicile in the state file a sworn declaration with the clerk of the circuit court naming their Florida address as their permanent home.14Florida Senate. Florida Statutes 222.17 – Manifesting and Evidencing Domicile in Florida Recording fees are modest, typically around $10.15Miami-Dade County Clerk of the Court and Comptroller. Declaration of Domicile The declaration is not conclusive on its own, but it creates a dated public record of your intent.
Mind the 183-Day Rule
Many high-tax states apply a 183-day test. If you keep a home in your former state and spend more than 183 days there in a year, that state can treat you as a statutory resident and tax your worldwide income. The burden of proving you were physically in Florida for the majority of the year typically falls on you.
Auditors look at a cluster of factors: registering to vote in Florida, obtaining a Florida driver’s license, titling vehicles in the state, and using a Florida address on your federal return. Keep flight records, utility bills, and credit card statements that show Florida-based spending. Residents who lose these audits almost always lost because they did not keep records.
Claim the Homestead Exemption
Applying for the homestead exemption on your Florida home lowers your property tax bill and simultaneously creates strong evidence of permanent residency. The exemption requires that you own the property and live there as your permanent home as of January 1, then file with the county property appraiser by March 1.4The Florida Legislature. Florida Statutes 196.031 – Exemption of Homesteads Because Florida law requires you to certify permanent residence to receive the exemption, having it on record is among the most persuasive signals a former state’s auditor will encounter.16Florida Department of Revenue. Homestead Property Tax Exemption