Unlocking the Secrets of Sales Tax in the Sunshine State: What to Expect in Florida in 2023

Florida has always been a haven for businesses, from its zero income tax state to its diverse economy. However, come 2023, the Sunshine State will experience a significant change in its sales tax laws. Are you a business owner operating in Florida? Do not miss out on unlocking the secrets of the upcoming shift in the state's sales tax system.

Why is this important? The changes to Florida's sales tax laws mean that businesses need to be aware of how they sell and how much they sell. New thresholds will be implemented, which means some businesses that previously did not have to pay sales tax are now subject to it. Don't let these new laws catch you off guard.

But, don't worry - we've got you covered. In this article, we'll dive into what to expect in 2023, who will be affected, and most importantly, how your business can navigate these upcoming changes. Don't miss out on learning how to keep your business running smoothly and avoid any unwanted penalties due to noncompliance.

In the end, knowledge is power, and staying informed is crucial to maintaining a successful business in Florida. So, let us guide you through unlocking the secrets of sales tax in the Sunshine State - read on for all the information you need to be prepared for the changes coming down the pipeline in 2023.

Introduction

Unlocking the secrets of sales tax in the Sunshine State can be a challenging task. As a business owner, it’s essential to have a comprehensive understanding of your tax obligations to avoid falling into legal issues. In this article, we’ll dive in-depth into the sales tax system of Florida and what you can expect in 2023. Let’s get started.

What is Sales Tax in Florida?

Sales tax is a state-imposed tax levied on the sale or lease of goods, services, or rentals of tangible personal property in Florida. The current sales tax rate is 6%, and it’s applied to all retail sales, leases, and rentals, including online transactions. Furthermore, some counties/cities in Florida may impose an additional sales surtax, which ranges from 0.5% to 2.5%, depending on the location.

What Has Changed in Florida’s Sales Tax System in 2021?

In 2021, Florida’s legislature has passed several important changes to the sales tax system, including:

• The online marketplace provider tax - this requires online marketplaces, such as Amazon and eBay, to collect and remit sales tax on behalf of their third-party sellers.
• The remote seller sales tax collection - this expands the obligation of out-of-state retailers to collect and remit sales tax on their customers' purchases shipped into Florida.

Anticipated Changes for Florida Sales Tax in 2023

Florida’s Sales Tax Holiday, one of the highlights of state residents’ shopping year, is almost always held at the beginning of August, providing residents and visitors with a back-to-school break. But it will no longer be what it used to be in 2023. Florida legislature recently passed a bill that eliminates the back-to-school sales tax holiday beginning in 2023. The bill reports that its purpose is to save millions of dollars for the state annually by reducing the number of general revenue tax exemptions.

Comparison: Sales Tax Rates in Florida

What Triggers Sales Tax Nexus in Florida?

In Florida, you should collect sales tax if you meet one or more of the following criteria:

• Your business has a physical presence in the state, such as an office, warehouse, or storefront.
• You have employees or independent contractors working in Florida.
• You make regular deliveries into the state using your vehicles or common carriers (UPS, FedEx, USPS).
• Your company meets the economic nexus threshold set by the state ($100,000 or more in sales, or 200 or more separate transactions in the state).

Exemptions from Sales Tax in Florida

Florida exempts several items from sales tax, including:

• Prescription medication
• Certain types of groceries
• Medical Equipment and Supplies
• Services (Although services that are used to manufacture, produce, or repair tangible personal property are taxable).

Penalties for Non-Compliance

If you fail to collect or remit sales tax in Florida, you may be subjected to penalties, including:

• Possible arrest and incarceration
• High-interest rates
• Substantial fines
• Revocation of your business license

Conclusion

Florida’s sales tax system can be complex and ever-changing, but understanding it is essential to avoid compliance issues. By keeping yourself updated with anticipated changes and legislation, including knowing when you need to collect and remit the tax, as well as which items are taxable, you can effectively manage your Florida sales tax obligations and keep your business protected.

Thank you for taking the time to read this article about the sales tax changes coming to Florida in 2023. We hope that this information has been helpful in shedding light on what to expect and how your business may be impacted.As we discussed, there are several changes to look out for, including the implementation of an economic nexus threshold, marketplace facilitator collection requirements, and new taxation policies for remote sellers. It's important to begin preparing now to ensure compliance and avoid any penalties in the future.Remember, sales tax laws are complex and constantly evolving. Be sure to stay informed and seek professional guidance as needed to help navigate these changes in Florida and beyond.Thank you again for visiting our blog and we wish you success in all your business endeavors.

Here are some common questions people ask about unlocking the secrets of sales tax in Florida:

1. What changes can we expect in Florida's sales tax system in 2023?

Starting July 1, 2023, Florida will begin imposing sales tax on remote sellers and marketplace providers that exceed certain sales thresholds.

2. What is a remote seller?

A remote seller is a company that sells goods or services to customers in Florida but does not have a physical presence in the state. Examples include online retailers or businesses that make sales through catalogs or over the phone.

3. What is a marketplace provider?

A marketplace provider is a company that operates an online platform where third-party sellers can offer their goods or services to customers. Examples include Amazon, eBay, and Etsy.

4. How will the new sales tax law affect remote sellers and marketplace providers?

Remote sellers and marketplace providers that exceed $100,000 in sales or 200 transactions in Florida in a calendar year will be required to collect and remit sales tax on their taxable sales. The new law is expected to generate significant revenue for the state.

5. Will small businesses be affected by the new sales tax law?

The new law includes a small seller exception for businesses that have less than $100,000 in sales or fewer than 200 transactions in Florida in a calendar year. These businesses will not be required to collect and remit sales tax.