Living in a tax free Tampa is partly literal and partly a useful shorthand: Florida collects no personal income tax, no state estate tax, and no inheritance tax, and the state exempts groceries, prescription drugs, and most professional services from sales tax entirely. What you do pay is a 7.5% combined sales tax on most goods, property tax on real estate (reduced sharply if you homestead), and a documentary stamp tax when you sell a home. Everything below is what that adds up to for a resident, a retiree, or a business owner in Hillsborough County.
No State Income Tax on Any Kind of Earnings
Florida’s constitution blocks the state from taxing personal income. Article VII, Section 5 caps any such tax at the amount creditable against a similar federal tax, and because no federal credit currently exists, the effective rate is zero.1Florida Senate. Florida Constitution That covers wages, freelance income, investment gains, rental income, and retirement distributions alike.
For retirees in Tampa, the practical effect is that Social Security, private pensions, and withdrawals from 401(k) and IRA accounts all escape state-level tax. There is no state return to file. Your annual tax work begins and ends with the IRS. A household moving from a state with a top marginal rate above 10% can see five-figure annual savings on the same income.
No State Estate or Inheritance Tax
Florida imposes neither an estate tax nor an inheritance tax. A “pick-up” tax tied to the federal estate tax credit was effectively eliminated in 2005 when the federal credit was phased out. Heirs receiving assets from a Florida decedent owe the state nothing on the transfer itself.
Federal estate tax still applies to large estates. For 2026, the federal exemption is $15,000,000 per individual, or $30,000,000 for a married couple, with a 40% rate above that.2Internal Revenue Service. Whats New – Estate and Gift Tax One boundary worth flagging: if you still own property in a state that does tax inheritances or estates, such as Pennsylvania or New York, that state can tax the transfer of property located within its borders no matter where you live.
Sales Tax Rate in Tampa
Tampa’s combined sales tax rate is 7.5%: a 6% state tax plus a 1.5% Hillsborough County discretionary surtax.3Florida Department of Revenue. Hillsborough County Surtax Rate Update The county surtax portion applies only to the first $5,000 of a single item’s price, so on a large purchase like a furniture set or appliance package above that threshold, you pay the county share on the first $5,000 and only the 6% state rate on the rest.4Florida Department of Revenue. Discretionary Sales Surtax
Visitors pay more. Hotel rooms and short-term rentals carry an additional 6% tourist development tax, which combined with the regular sales tax puts the effective rate on overnight stays at 13.5%.5Hillsborough County Tax Collector. General Information – Tourist Development
What You Never Pay Sales Tax On
Several categories of everyday spending are permanently exempt from Florida sales tax.
Groceries are exempt under Florida Statute 212.08(1): meat, dairy, produce, eggs, cereals, frozen meals, baked goods, and the rest of what fills a cart.6Online Sunshine. Florida Code 212.08 – Sales, Rental, Use, Consumption, Distribution, and Storage Tax; Specified Exemptions Prepared meals at restaurants and delis are not covered.
Prescription drugs and medical supplies are also tax-free under Section 212.08(2), including hypodermic supplies, diagnostic test kits, prosthetic devices, hearing aids, eyeglasses, and common over-the-counter remedies approved by the Department of Business and Professional Regulation. Cosmetics and toiletries do not qualify even if they contain medicinal ingredients.
Most professional services carry no sales tax at all. Florida taxes tangible personal property and a short list of specific services (commercial cleaning, pest control, and security among them). Legal work, accounting, and medical care are not on that list.
Annual Sales Tax Holidays
The Florida Legislature passes temporary sales tax holidays each year, and the dates and thresholds shift from session to session. The Back-to-School holiday is the one you can rely on. For 2026 it runs the entire month of August and waives both the 6% state tax and the 1.5% county surtax on:
- Clothing, footwear, and accessories priced at $100 or less per item
- School supplies priced at $50 or less per item
- Learning aids and puzzles priced at $30 or less per item
- Personal computers and accessories priced at $1,500 or less, for noncommercial personal use
At 7.5%, that’s about $112 saved on a qualifying laptop.7Florida Department of Revenue. Annual Back-to-School Sales Tax Holiday
Recent sessions have added disaster preparedness holidays covering generators up to $3,000, weather radios, and batteries, along with “Freedom Summer” or “Freedom Month” holidays waiving tax on outdoor and camping gear and admission to concerts and sporting events.8Florida Department of Revenue. Freedom Summer Sales Tax Holiday None of those are guaranteed year to year. Check the Florida Department of Revenue’s sales tax holiday page each spring once the legislature finalizes the budget.
Homestead Exemption and the Save Our Homes Cap
Tampa homeowners pay property taxes to Hillsborough County, the city, the school district, and various special districts, but Florida’s homestead exemption cuts the bill substantially if the home is your primary residence.
The base exemption removes the first $25,000 of assessed value from all property taxes, including school levies. A second exemption of up to $25,000 applies to assessed value above $50,000, but does not apply to school taxes, and is adjusted annually for inflation.9Online Sunshine. Florida Code 196.031 – Exemption of Homesteads On a home assessed at $300,000, the combined exemptions typically save between $750 and $1,000 a year depending on local millage.
You must have owned and occupied the property as your permanent residence on January 1 of the tax year. File with the Hillsborough County Property Appraiser by March 1. A late-filing window usually runs into September; miss both and you lose the exemption for that full year.
Once your homestead 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 lower.10Online Sunshine. Florida Code 193.155 – Homestead Assessments In a market where real values jump 10% or more in a year, that cap keeps your tax bill from following, and the gap between assessed and market value grows the longer you stay.
Breaks for Business Owners
Florida was the only state in the country that taxed commercial lease payments, and that tax was fully repealed effective October 1, 2025 under House Bill 7031, which eliminated Section 212.031 of the Florida Statutes. A new commercial lease in Tampa no longer carries state or local sales tax on rent. For a tenant paying $5,000 a month, that works out to roughly $4,500 a year.
Florida’s corporate income tax is 5.5% on net income, with the first $50,000 of taxable income exempt.11Florida Department of Revenue. Corporate Income Tax Sole proprietorships, partnerships, and S-corporations don’t pay it at all, since their income passes through to personal returns and Florida has no personal income tax. The 5.5% rate hits C-corporations and entities taxed as corporations federally.
Businesses also report equipment, furniture, and fixtures to the county property appraiser each year as tangible personal property. The first $25,000 of assessed value is exempt if the return is filed by April 1, which puts many small operations entirely below the taxable threshold.12Florida Department of Revenue. Tangible Personal Property
Other Breaks Worth Knowing
Trading in a vehicle at the dealer reduces sales tax. Under Florida Statute 212.09, tax is calculated on the sale price minus the trade-in credit. Buy a $35,000 car, trade in one worth $10,000, and you pay 7.5% on $25,000. That trade-in saves you $750.
Florida has no traditional real estate transfer tax, but it does impose a documentary stamp tax on deeds at $0.70 per $100 of the sale price, rounded up to the nearest $100.13Florida Department of Revenue. Documentary Stamp Tax On a $400,000 home, that’s $2,800. By Florida custom the seller pays, though the parties can negotiate otherwise. There is no separate Tampa or Hillsborough County transfer tax on top.
Nonprofit organizations recognized under IRS Section 501(c)(3) can apply to the Florida Department of Revenue for a Consumer’s Certificate of Exemption (Form DR-14), which allows tax-free purchases of goods and services used in their charitable, religious, or educational mission.14Florida Department of Revenue. Nonprofit Organizations and Sales and Use Tax Schools and religious institutions use it routinely for supplies, equipment, and materials.