Florida has no state income tax on individuals. Wages, investment gains, business profits distributed to owners, Social Security, pensions, and IRA withdrawals all escape state-level taxation for Florida residents. You still owe federal income tax on everything you earn, and you’ll still pay Florida sales tax, property tax, and various transaction taxes, but the state does not require residents to file a personal income tax return.
Why the Zero Rate Is Locked In
Article VII, Section 5 of the Florida Constitution prohibits any tax on the income of natural persons who are residents or citizens of the state “in excess of the aggregate of amounts which may be allowed to be credited upon or deducted from any similar tax levied by the United States or any state.”1Florida Senate. The Florida Constitution Because federal law offers no such credit for state income taxes paid, the constitutional ceiling keeps the effective rate at zero.
This isn’t a legislative preference that a future session could reverse on its own. Removing the cap would require a constitutional amendment approved by at least 60% of Florida voters.2Florida Department of State. Constitutional Amendments/Initiatives A retiree drawing six figures in pension income gets the same treatment as a minimum-wage worker: no state return, no state withholding, no state liability.
No State Estate or Inheritance Tax Either
The same constitutional clause that blocks personal income tax also prevents Florida from levying an estate or inheritance tax beyond what could be credited against federal estate tax. When Congress replaced the federal credit for state death taxes with a deduction, Florida’s estate tax dropped to zero. No Florida estate tax has been due for anyone who died on or after January 1, 2005.3Florida Department of Revenue. Estate Tax
Federal estate tax still applies to large estates. The exemption is scheduled to revert in 2026 to the pre-2018 level of $5 million, adjusted for inflation, after the temporary increase under the Tax Cuts and Jobs Act expires.4Internal Revenue Service. Estate and Gift Tax FAQs Estates above that threshold owe federal tax at rates up to 40%, regardless of Florida’s favorable state treatment.
Businesses That Do Pay Income Tax
The individual exemption doesn’t cover every business form. Chapter 220 of the Florida Statutes imposes a 5.5% corporate income tax on C-corporations and other artificial entities with characteristics like perpetual life, transferable ownership, and limited liability.5Florida Senate. Florida Statutes Chapter 220 – Income Tax Code6The Florida Legislature. Florida Code 220.11 – Tax Imposed The first $50,000 of net income is exempt.7The Florida Legislature. Florida Code 220.14 – Exemption A C-corporation with $120,000 in Florida net income owes 5.5% on $70,000.
S-corporations, partnerships, and LLCs taxed as partnerships for federal purposes are explicitly excluded from the definition of “corporation” under Florida’s tax code and do not owe the corporate income tax.8Florida House of Representatives. Florida Code 220.03 – Definitions Income from these pass-through entities flows to the individual owners, and because those owners are natural persons, the constitutional prohibition shields that income from state tax. Sole proprietorships using fictitious names are also excluded.
What Florida Taxes Instead
Skipping the income tax doesn’t mean Florida operates without revenue. The state shifts its funding to consumption, property, and transaction taxes, and those show up in daily life.
Sales Tax
The general sales tax rate is 6% on most retail purchases of tangible goods. Counties may add a discretionary surtax of 1% or 1.5% on top, so combined rates generally fall between 6% and 8% depending on where you shop. Groceries (unprepared food), prescription drugs, and certain other necessities are exempt, and the state periodically runs sales tax holidays for school supplies, disaster preparedness items, and similar categories.
Property Tax
Property tax is a major revenue source, collected at the county level. Homeowners who make Florida their permanent residence can claim a homestead exemption worth up to $50,000. The first $25,000 reduces assessed value for all property taxes, including school district levies; an additional $25,000 applies to assessed value between $50,000 and $75,000 for non-school taxes only.9Florida Department of Revenue. Property Tax Information for Homestead Exemption Once a homestead exemption is in place, the Save Our Homes provision caps annual increases in assessed value at 3% or the change in the Consumer Price Index, whichever is less.10Florida Department of Revenue. Save Our Homes Assessment Limitation and Portability Transfer
Real Estate Transaction Taxes
Buying property in Florida triggers two additional state taxes. The documentary stamp tax on deeds is $0.70 per $100 of the transfer amount in every county except Miami-Dade, which charges $0.60 per $100.11Florida Department of Revenue. Florida Documentary Stamp Tax On a $400,000 home outside Miami-Dade, that’s $2,800 in documentary stamps.
A separate nonrecurring intangible tax of 2 mills ($2 per $1,000) applies to obligations secured by a mortgage or lien on Florida real property.12The Florida Legislature. Florida Code 199.133 – Levy of Nonrecurring Tax A $300,000 mortgage generates $600 in intangible tax. It’s owed even if the mortgage isn’t recorded in Florida, as long as the secured property sits within the state.13Florida Department of Revenue. Nonrecurring Intangible Tax
Becoming a Florida Resident for Tax Purposes
Moving to Florida and being recognized as a Florida resident for tax purposes are two different things. Your former state may not simply accept your word for it, especially if you’re leaving a jurisdiction with high income tax rates. Documentation and lifestyle changes both matter.
The most important formal step is filing a Declaration of Domicile with the clerk of the circuit court in your Florida county. Under Florida Statute 222.17, this sworn statement declares that you reside in and maintain a permanent home in the county and intend to keep it as your principal residence.14Florida Senate. Florida Statutes 222.17 – Manifesting and Evidencing Domicile in Florida If you also maintain a home in another state, the declaration can specify that your Florida home is the predominant and principal one.
Practical steps reinforce the claim:
- Obtain a Florida driver’s license within 30 days of establishing residency.15Florida Department of Highway Safety and Motor Vehicles. New Resident
- Register your vehicles in Florida.
- Register to vote in Florida.
- Move bank accounts, investment accounts, and professional relationships (doctors, accountants, attorneys) to Florida.
Florida itself has no statutory “183-day rule” requiring a specific number of days in the state. That concept comes from other states that use physical-presence thresholds to claim you as their resident. Spending more than half the year in Florida is a useful benchmark, but it’s your overall pattern of life that determines domicile.
Domicile Audits From High-Tax States
If you earned significant income in New York, New Jersey, Connecticut, or California, moving to Florida can trigger a residency audit from your former state. Those states have dedicated audit teams that scrutinize people who claim to have changed domicile.
Auditors don’t focus mainly on driver’s licenses or voter registration. A New York residency audit, for example, examines five primary factors:
- Home: size, maintenance, and use patterns of your Florida residence compared to any home you still keep in the former state.
- Active business involvement: where you work, where your business connections are, where your income originates.
- Time: how many days you spend in each location. Even a partial day in the former state counts as a full day there.
- Near and dear items: where you keep art, jewelry, and family heirlooms. Auditors check insurance riders to verify locations.
- Family connections: where your spouse and minor children live.
The taxpayer bears the burden of proof, and the standard in many states is clear and convincing evidence that you abandoned your old domicile and moved to Florida with intent to stay permanently. Keeping a vacation condo, sitting on a nonprofit board, or having grandchildren enrolled in the former state’s schools can all undercut a domicile change. If the case is close, the auditing state generally wins.
Remote Workers and the Convenience of the Employer Rule
Working remotely from Florida for an out-of-state employer creates a wrinkle that trips up new residents. Florida won’t tax your income, but the state where your employer is located might.
Most states tax wages based on where the work is physically performed. Sit at a desk in Tampa working for a Texas employer, and no state taxes your wages. But a handful of states apply a “convenience of the employer” rule: if you work remotely for your own convenience rather than because your employer requires you to be in Florida, the employer’s state may tax your wages as if you were still working there. States currently applying some version of this rule include New York, Pennsylvania, Connecticut, New Jersey, Delaware, Nebraska, Alabama, and Oregon. New York’s version is the most aggressive and has been the subject of ongoing litigation.
Remote arrangements can also create complications for the employer. An employee working in Florida may establish “nexus” between the employer’s business and the state, potentially triggering corporate tax or sales tax collection obligations. That’s primarily the employer’s problem, but it’s why some companies restrict where remote employees can live.
The Overall Picture
Florida’s lack of a personal income tax is real and constitutionally protected. It is not, however, the same as being a no-tax state. Sales tax, property tax, documentary stamps, and intangible tax all take a bite, and C-corporations owe 5.5% on income over the $50,000 exemption. Whether the overall burden lands lower than your current state depends on your income, your spending, and the value of the home you buy. A high earner with modest spending habits benefits substantially. A retiree on a fixed income buying a house may find property taxes and transaction costs offsetting much of what the missing income tax would have saved.