Florida's tax nexus rules determine when businesses must register for sales tax, income tax, and employment taxes in the state. Companies incorporated in Florida automatically have nexus and must register upon formation, while out-of-state businesses trigger registration requirements by crossing specific economic thresholds.
Understanding these thresholds is crucial because crossing them creates immediate compliance obligations and potential penalties for non-registration. Florida uses different triggers for different tax types: economic thresholds for sales tax, physical presence tests for income tax, and employee-based triggers for employment taxes. Each operates independently, so you could owe one type of tax without owing others.
Florida maintains fixed thresholds for sales tax, but could adjust rules through future legislation. The state's marketplace facilitator rules exclude facilitated sales from individual seller threshold calculations, simplifying compliance for platform-based businesses.
Florida establishes sales tax nexus through two primary methods: economic activity thresholds and physical presence triggers. Once either threshold is crossed, businesses must register and begin collecting Florida sales tax immediately.
Florida's economic nexus rule requires remote sellers with more than $100,000 in retail sales to Florida customers during the prior calendar year to register and collect sales tax. This threshold includes both taxable and nontaxable retail sales but excludes wholesale transactions with valid resale certificates and sales through registered marketplace facilitators.
If you meet the Florida economic nexus threshold, your obligation to collect Florida sales tax begins on January 1 following the year your business exceeds the threshold. Florida doesn't use transaction count requirements, so that a single large contract can establish nexus just as easily as many small sales.
Individual sellers who make sales through a marketplace do not include their marketplace sales when calculating their own Florida economic nexus threshold if the marketplace facilitator is already registered and collecting Florida tax on those transactions.
Certain business activities create a physical nexus in Florida, establishing immediate tax obligations regardless of sales volume:
Physical presence creates sales tax nexus instantly, making the $100,000 economic threshold irrelevant for businesses with any Florida footprint.
Be sure to apply for Florida sales tax registration at least 3 to 5 business days before you need to start collecting tax. Registration occurs through the Florida Department of Revenue portal, where businesses must collect the state sales tax (6%) plus any applicable local discretionary surtax varying by county.
Florida assigns filing frequency based on tax volume, typically monthly for larger sellers and quarterly for smaller ones. Returns and payments are generally due by the 20th of the month following the collection period.
Florida imposes a 5.5% corporate income tax on corporations conducting business within the state. Unlike sales tax, Florida uses traditional nexus standards based on physical presence and business activities rather than economic thresholds.
Corporate income tax nexus in Florida is established through physical presence or conducting business within the state. There are no economic thresholds; any qualifying business activity can establish filing obligations under Florida Statutes Chapter 220.
Activities that create income tax nexus include:
Pass-through entities like S-corporations and LLCs taxed as partnerships generally avoid Florida corporate income tax, benefiting from Florida's lack of personal income tax.
Federal Public Law 86-272 protects some businesses from Florida corporate income tax even if they have physical presence. This protection applies only to soliciting orders for tangible personal property that are approved and shipped from outside Florida. The protection disappears when employees provide services, handle inventory, or perform activities beyond pure sales solicitation.
Florida has not adopted the restrictive 2021 Multistate Tax Commission interpretation regarding internet activities, potentially providing broader protection for digital commerce than states following the MTC's approach.
Once a nexus is established, corporations must file Form F-1120 annually by May 1 for calendar-year filers. Florida imposes a flat 5.5% rate with a $50,000 exemption available to qualifying corporations. Estimated quarterly payments are required for businesses expecting to owe more than $2,500 annually.
Employment tax nexus in Florida is straightforward: hiring any employee who performs work physically within the state creates immediate tax obligations, regardless of revenue or other activity levels.
Any employee working from a Florida location, whether full-time staff, part-timers, seasonal workers, or remote hires, establishes employment tax nexus. Temporary assignments count as well; a sales representative spending time in Florida can trigger withholding requirements for wages earned during that work period.
Employers must register with the Florida Department of Revenue for unemployment tax and compliance with federal payroll obligations. Florida does not have state income tax withholding requirements since there is no personal income tax.
Employers must register for Florida Reemployment Tax when paying $1,500 in wages during a calendar quarter or employing one worker for 20 different weeks. The tax applies to the first $7,000 of wages per employee, with rates varying by experience rating.
New hire reporting is required within 20 days of hiring, and workers' compensation requirements vary by industry and employee count.
Florida's tax rules capture modern business activities, including digital products, cloud software, and remote employees working from Florida locations.
Digital products and SaaS subscriptions are generally not subject to Florida sales tax, meaning these exempt sales don't count toward the $100,000 economic nexus threshold. However, remote employees working from Florida addresses create employment tax nexus (immediate) and potential income tax nexus if business operations are substantial.
Marketplace facilitators collecting Florida tax on your behalf exclude those sales from your personal $100,000 threshold calculation. However, affiliate marketing relationships or drop-shipping arrangements with Florida-based partners can create a physical presence nexus requiring immediate registration.
Reaching a tax or employment nexus in Florida may also result in the need for foreign registration with the Secretary of State. Although Florida doesn't have specific secretary of state nexus thresholds, states are more likely to consider a company as "doing business" if it's already paying taxes there.
Once any Florida nexus threshold is crossed, immediate registration and ongoing compliance become mandatory, with penalties and interest accruing from the date nexus was established.
Florida requires detailed documentation to support nexus calculations. This includes:
Florida imposes penalties for late registration and non-compliance. Interest accrues from the date the tax was originally due, and the Department of Revenue can assess back taxes for periods when nexus existed but registration was not in place.
The state offers voluntary disclosure programs that may limit lookback periods and reduce penalties for businesses that proactively address past exposure before being contacted by an auditor.
Discern provides comprehensive registered agent services and automated compliance tracking to ensure your Florida obligations are met without administrative burden. Our platform monitors compliance requirements across all jurisdictions where you operate, handling foreign registrations and ongoing filing requirements through a single dashboard.
Ready to streamline your Florida compliance requirements? Book a demo with Discern today.
.png)
.png){kind=small}