Florida has no personal income tax. The state constitution prohibits any income tax on individuals, so wages, self-employment earnings, interest, dividends, capital gains, rental income, and retirement distributions are not taxed at the state level.1FindLaw. Florida Constitution Art. VII, Section 5 – Estate, Inheritance and Income Taxes You do not file a Florida income tax return, and no state tax is withheld from your paycheck. Florida funds itself instead through sales tax, local property taxes, a corporate income tax on C-corporations, and a handful of transactional taxes that come up mainly at real estate closings.
No Personal Income Tax in Florida
Article VII, Section 5 of the Florida Constitution caps any state income tax on “natural persons” at the amount that could be credited against a similar federal tax.1FindLaw. Florida Constitution Art. VII, Section 5 – Estate, Inheritance and Income Taxes The federal government offers no such credit, so the effective ceiling is zero. Florida has never imposed a personal income tax, and changing that would require a constitutional amendment approved by voters.
The prohibition is flat and applies to every resident regardless of how much they earn. It covers every category of personal income, including investment and retirement income that other states often tax heavily.
One boundary worth knowing: the same constitutional provision bars a state estate or inheritance tax, so Florida collects nothing when a resident dies.1FindLaw. Florida Constitution Art. VII, Section 5 – Estate, Inheritance and Income Taxes A Florida estate can still owe federal estate tax if it exceeds the federal exemption, but the state itself takes nothing.
Federal Income Tax Still Applies
Florida residency does not change your obligation to the IRS. If your income clears the federal filing threshold, you file a federal return and pay federal tax on wages, self-employment income, investment income, and retirement distributions just as you would anywhere else. Self-employment tax (Social Security and Medicare on net earnings) and federal capital gains tax apply the same way. If you earn income that isn’t subject to withholding, such as freelance or investment income, you may still owe quarterly estimated payments to the IRS.
The practical gain of living in Florida is that your federal bill is the whole income tax bill. For high earners and retirees with significant investment income, that single-layer structure is often the point of the move.
Corporate Income Tax
Individuals pay no state income tax, but corporations do. Florida imposes a flat 5.5 percent corporate income tax on net income earned in or connected to the state.2Florida Senate. Florida Statutes 220.11 – Tax Imposed The tax reaches any corporation that does business in Florida, earns income from Florida sources, or is organized under Florida law. A $50,000 standard exemption applies, so only net income above that amount is taxed.3Florida Senate. Bill Analysis and Fiscal Impact Statement SPB 7048 A corporation with $200,000 in Florida net income would pay 5.5 percent on $150,000, or $8,250.
Pass-through businesses mostly escape this. Sole proprietorships, general partnerships, and S-corporations do not owe Florida corporate income tax; income flows through to the owners, who then benefit from the personal income tax prohibition. An LLC taxed as a corporation, however, pays the 5.5 percent rate like any other C-corporation.2Florida Senate. Florida Statutes 220.11 – Tax Imposed Most small businesses in Florida face no state income tax at all.
Sales Tax
Because the state doesn’t tax income, consumer spending carries a heavier share of the load. Florida imposes a 6 percent sales tax on most goods and certain services, including the lease of commercial real property.4Florida Senate. Florida Statutes 212.08 – Sales, Rental, Use, Consumption, Distribution, and Storage Tax; Specified Exemptions Counties can add a discretionary surtax on top. Most counties are limited to 1 percent, though counties under 50,000 residents or those with a publicly supported medical school can go to 1.5 percent.5Florida Senate. Florida Statutes 212.055 – Discretionary Sales Surtaxes; Legislative Intent; Authorization and Use of Proceeds Combined state and local sales tax rates in Florida generally run from 6 percent to about 8 percent depending on the county.
Several categories of essentials are exempt from Florida sales tax:
- Groceries, meaning food products for human consumption such as cereals, meat, dairy, produce, and baked goods sold outside a restaurant setting.4Florida Senate. Florida Statutes 212.08 – Sales, Rental, Use, Consumption, Distribution, and Storage Tax; Specified Exemptions
- Prescription drugs.
- Common over-the-counter health items, including toothbrushes, toothpaste, dental floss, and mouthwash.
- Prescription eyeglasses, contact lenses, and related items like frames.
Prepared food sold in restaurants is taxable at the full rate.
Property Taxes and the Homestead Exemption
Florida levies no state property tax, but counties, school boards, and special districts rely on property taxes to fund schools and local services. County property appraisers assess market value each year, and the bill reflects the local millage rates applied to that value. Average effective property tax rates across Florida counties generally fall in the range of about 0.8 percent to 1.0 percent of market value, though individual bills vary with location and exemptions.
Homestead Exemption
Florida’s homestead exemption reduces the taxable value of your primary residence. To qualify, you must own the property, live in it as your permanent home, and apply with your county property appraiser. For the 2026 tax year, the total exemption is $51,411, now adjusted annually for inflation.6Florida Dept. of Revenue. Additional Homestead Exemption Adjustment
The exemption has two parts. The first $25,000 reduces assessed value for all tax purposes, including school district taxes.7Florida Senate. Florida Statutes 196.031 – Exemption of Homesteads The second portion, $26,411 for 2026, applies only to the assessed value between $50,000 and $75,000 and does not reduce school taxes.6Florida Dept. of Revenue. Additional Homestead Exemption Adjustment On a home assessed at $300,000, you would subtract $51,411 and pay tax on roughly $248,589 of value, with the school district taxing a slightly higher amount.
Save Our Homes Cap
Once a property has the homestead exemption, annual increases to its assessed value are capped at 3 percent or the change in the Consumer Price Index, whichever is lower.8Florida Dept. of Revenue. Save Our Homes Assessment Limitation and Portability Over time this “Save Our Homes” cap can open a wide gap between assessed value and market value, especially when prices rise fast. If you sell and buy another Florida home, you can port up to $500,000 of that accumulated savings to the new property.
Taxes at a Florida Real Estate Closing
Buying or selling property in Florida triggers two state taxes that often catch newcomers off guard.
The documentary stamp tax applies to the deed. In every county except Miami-Dade, the rate is 70 cents per $100 of the sale price (or any portion of $100), which comes to $2,800 on a $400,000 home. Miami-Dade charges a base rate of 60 cents per $100 and adds a 45-cent-per-$100 surtax on transfers of property other than single-family homes. A separate documentary stamp tax of 35 cents per $100 applies to promissory notes and mortgages. The tax is capped at $2,450 for promissory notes; there is no cap on recorded mortgages.9Florida Dept. of Revenue. Documentary Stamp Tax
A one-time nonrecurring intangible tax of 2 mills, or $2 per $1,000 of the loan amount, also applies when you take out a mortgage on Florida real property.10Florida Dept. of Revenue. Nonrecurring Intangible Tax On a $300,000 mortgage, that is $600, usually paid at closing with the documentary stamp tax.
Making Florida Your Tax Home
Moving from an income tax state and claiming Florida as your residence takes more than a closing statement. States with income taxes often look hard at whether a former resident actually changed domicile or just bought a second home.
Florida law lets you formally declare your domicile by filing a sworn statement with the clerk of the circuit court in the county where you live.11Justia. Florida Statutes 222.17 – Manifesting and Evidencing Domicile in Florida Recording fees are modest, typically around $10, and the form must be notarized. Filing is not legally required, but it creates a paper trail if your former state later questions the move.
A declaration alone rarely satisfies an aggressive auditor. Build a stronger record by taking these steps early:
- Get a Florida driver’s license and surrender your old one.
- Register to vote in Florida and cancel any prior registration.
- Spend the majority of the year in Florida, ideally more than 183 days.
- Move your primary bank accounts and financial relationships to Florida.
- Keep your most valuable personal belongings at your Florida residence.
Residency audits weigh the comparative size and use of your homes, where your family lives, where you work, and how you spend your time. The more thoroughly you cut ties with your former state and anchor yourself in Florida, the stronger your position if the question comes up.