Miami is not tax-free, but it comes closer than almost anywhere else in the country. Florida’s constitution bars the state from taxing personal income, so wages, retirement withdrawals, and investment gains all escape the state layer of tax. You will still owe federal income tax, a 7.5% sales tax on most purchases in Miami-Dade County, property tax if you own real estate, and a handful of other levies depending on your situation.
What Florida Does Not Tax
The reason people call Miami tax-free is Article VII, Section 5 of the Florida Constitution, which prohibits the state from levying personal income tax.1Florida Senate. The Florida Constitution Every dollar you earn from a salary, freelance work, or a side gig stays untouched by the state.
The exemption reaches well past paychecks. Capital gains from selling stocks or real estate, dividend income, interest on savings, Social Security benefits, pension distributions, and withdrawals from 401(k)s and IRAs all avoid Florida tax.1Florida Senate. The Florida Constitution Florida also repealed its intangibles tax years ago, so there’s no state tax on the value of financial assets you hold.
Florida does not impose a state estate tax or inheritance tax either. Chapter 198 of the Florida Statutes technically authorizes an estate tax, but only in an amount equal to the federal credit for state estate taxes paid, and the federal government replaced that credit with a deduction in 2005. The result is a Florida estate tax of zero.2Florida Senate. Florida Statutes Chapter 198 – Estate Taxes What you leave to heirs passes without any state death tax.
Taxes You Still Owe in Miami
Federal Income Tax
Living in Miami doesn’t change your federal obligations. The IRS taxes your worldwide income regardless of where you live. For tax year 2026, federal rates run from 10% on the first $12,400 of taxable income for single filers up to 37% on income above $640,600; married couples filing jointly reach the 37% bracket above $768,700.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026 If you’re self-employed, you also owe federal self-employment tax covering Social Security and Medicare, just like self-employed workers anywhere else.
Federal estate tax still applies as well, though the threshold is high. For 2026, estates up to $15,000,000 per individual are exempt; amounts above that are generally taxed at 40%, and married couples can effectively double the exemption through portability.3Internal Revenue Service. IRS Releases Tax Inflation Adjustments for Tax Year 2026
Sales Tax at 7.5%
Florida’s biggest revenue source is the sales tax. The state charges 6% on most retail goods and certain services.4Florida Statutes. Florida Statutes 212.05 – Sales, Storage, Use Tax Miami-Dade County adds a 1.5% discretionary surtax, bringing the combined rate to 7.5% on most taxable transactions.5Florida Department of Revenue. Discretionary Sales Surtax Information for Calendar Year 2026
Groceries (meaning most unprepared food from a store) and prescription medications are generally exempt. Prepared food, restaurant meals, clothing, electronics, furniture, and most other consumer goods are taxable at the full 7.5%.
If you buy a taxable item from an out-of-state seller who doesn’t charge Florida sales tax, you owe use tax at the same rate. You report and pay it on Form DR-15MO with the Florida Department of Revenue. If the seller collected tax at a rate below 6%, you owe the difference; if you paid 6% or more, no additional Florida tax is due.6Florida Dept. of Revenue. Consumer Information
Property Tax
Real estate in Miami-Dade is subject to ad valorem property tax. The county property appraiser sets the assessed value, and each taxing authority (schools, county, municipality, special districts) sets its own millage rate. In the unincorporated area of Miami-Dade, the combined millage runs around 17 mills, or roughly $17 per $1,000 of taxable value.7Miami-Dade County Property Appraiser. Proposed Millage Rates The exact rate depends on which municipality your property sits in.
If you own property and make it your permanent home, apply for the homestead exemption. The first $25,000 of assessed value is exempt from all property taxes. A second exemption covers assessed value between $50,000 and $75,000 but doesn’t reduce school district taxes.8Florida Department of Revenue. Property Tax Exemptions and Additional Benefits For 2026, that second exemption has been inflation-adjusted to $26,411, pushing the maximum homestead exemption to roughly $51,411 for non-school taxes.9Florida Department of Revenue. Additional Homestead Exemption Adjustment
Once you have the homestead exemption, the Save Our Homes cap limits annual increases in assessed value to 3% or the change in the Consumer Price Index, whichever is lower. Over the years, this can open a wide gap between your home’s market value and the value you’re actually taxed on. If you later sell and buy another Florida home, you can port that benefit by filing Form DR-501T with the county property appraiser by March 1, and you must establish the new homestead within three years of January 1 of the year you left the old one.10Florida Department of Revenue. Save Our Homes Brochure
Property tax bills go out in November and are due by March 31. Paying earlier earns a discount of 4% in November, scaling down by one point per month to zero in March. Bills unpaid after March 31 become delinquent, which can lead to tax certificates and eventually a tax deed sale.11Miami-Dade County Office of The Tax Collector. Early Payment Discounts
Moving From a State That Taxes Income
If you’re relocating from a state with an income tax, your old state may keep trying to tax you unless you formally cut ties. Florida Statute 222.17 lets you file a sworn Declaration of Domicile with the clerk of the circuit court in your Florida county, declaring under oath that your Florida address is your permanent, principal home.12Official Internet Site of the Florida Legislature. Florida Statutes 222.17 – Manifesting and Evidencing Domicile in Florida
Back that up with practical steps: register to vote in Florida, get a Florida driver’s license, register your vehicles here, and update your address with banks, employers, and the IRS. If you keep a home in your old state, that state’s tax authority will likely count the days you actually spend in Florida, so hold on to records of your physical presence.
If You Own a Business
Florida’s no-income-tax rule covers individuals, not every entity. C-corporations pay a 5.5% Florida corporate income tax on net income earned in the state, after a $50,000 exemption.13Florida Department of Revenue. Corporate Income Tax Sole proprietorships, partnerships, and S-corporations are not subject to it, because their income passes through to the owners, who owe no Florida personal income tax.
Businesses also owe an annual tangible personal property tax on equipment, furniture, and fixtures. You file Form DR-405 with the county property appraiser by April 1. File on time and the first $25,000 of assessed value is exempt.14Florida Dept. of Revenue. Property Tax – Tangible Personal Property
If You’re Visiting
Short-term stays carry an extra layer of tax that residents don’t see on everyday purchases. Miami-Dade imposes a combined 6% tourist tax on hotel rooms, vacation rentals, and other lodging rented for six months or less: 3% Convention Development Tax, 2% Tourist Development Tax, and 1% Professional Sports Facilities Tax.15Miami-Dade County. Tourist and Restaurant Taxes That rides on top of the 7.5% state and county sales tax, so a hotel room in most of Miami-Dade is taxed at 13.5%.
Some cities layer on more. Miami Beach adds a 4% resort tax on rooms and a 2% tax on food and beverage sales at restaurants, bars, and nightclubs.16City of Miami Beach. File/Pay Resort Tax A guest at a Miami Beach hotel can see a combined rate above 17% on the room charge. Tourism revenue of that scale is part of how Florida can keep personal income tax at zero.