Figuring out Florida Sales Tax with Business to Business Bookkeeping
Sales tax can be tricky. BTB is looking into Florida sales tax regulations and procedures to help simplify this process for your business.
Bottom line for Florida – a business or individual with nexus, selling taxable goods or services, should be collecting sales tax from customers and remitting to the state.
For sales tax, nexus is a fancy way to say you have a business connection in that state. Different states have different rules, but in Florida nexus means you:
- do business as a corporation under Florida laws, or live the state
- have a retail location or office associated with your business
- have salespeople in Florida who solicit business for you or on your behalf
- solicit business in Florida through various media sources including, but not limited to: direct mail, catalog distribution, television, radio or other electronic media, newspaper or magazine advertisements, or any other media
- own real property or tangible personal property held in Florida, such as inventory
Location matters. Florida is destination based. So sales tax is determined by the location of the buyer, not the seller.
Customers who buy at your business location pay sales tax for your address because that is the delivery address. If you are shipping to another Florida location, you determine the sales tax by the rate at that address.
Jane sells Widgets. She operates her business in Tampa, Florida.
Jane sells locally, but also online.
Customers who buy products from Jane at her location would pay the 8.5% sales tax rate of Hillsborough County.
When Jane sells online, there are other things to consider. Since she has nexus in Florida, she must collect sales tax from all Florida customers. However the rate of sales tax is based on the rate of the delivery address. A customer in Miami would pay a sales tax rate of 7%, while a customer in Orlando would pay 6.5%. You can look up the Florida sales tax rate to where your are shipping your goods here.
What if Jane has customers in Georgia or Texas? Well, with recent changes to federal laws, she might have to collect and remit in those states too.
In the 2018 case South Dakota vs. Wayfair, Inc., the Supreme Court ruled to give states the right to require online sellers to charge and collect sales tax from all online buyers. Some states have already set up regulations and procedures for collecting sales tax for online sales. However many of those states have set up a minimum number of transactions or amount sold annually before requiring collection of sales tax on online sales. Currently the Florida legislature is considering a bill (SB 126: Sales and Use Tax) to change regulations here, and as of February 2020 it has reached the Appropriations Committee.
For now Florida hasn’t made any changes, but if you sell online to customers in multiple states, make sure you check new laws for online selling in those states.
If you need to register your business with Florida DOR, you can do that here.
For information about how BTB can help you with your sales tax questions, or if you have a question you’d like BTB to tackle, contact us today!