Florida Corporate Income Tax
Florida Corporate Income Tax tests how Florida builds a corporate tax base from federal taxable income, adjusts it, apportions it to Florida, applies the exemption and rate, and enforces filing and payment. Florida has no personal income tax, so this entity-level tax is a major state revenue source.
Core rules
- Florida imposes the tax on corporations and financial institutions for the privilege of doing business in Florida. S corporations generally are not subject to Florida corporate income tax, except for the federal built-in gains tax and excess net passive income tax.
- The starting point is federal taxable income. Florida then requires adjustments, including add-backs for certain taxes on or measured by income and for interest on non-Florida state and municipal bonds, and allows specified deductions.
- Florida apportions business income using a single sales factor for most taxpayers for tax years beginning on or after January 1, 2019. Financial organizations and other special industries may use different formulas.
- Florida allows a $50,000 exemption from net income, prorated for short taxable years. The current rate is 5.5%. The exemption is applied to Florida net income, not to the tax itself.
- A corporation must file Form F-1120 if it has Florida gross receipts of $50,000 or more or owes Florida tax. The return is due May 1 for calendar-year taxpayers, with a six-month extension available; the extension does not extend the payment deadline.
Worked example
A calendar-year corporation has $500,000 of federal taxable income. Florida adjustments add $20,000, producing $520,000. Its Florida apportionment percentage is 60%, so Florida net income is $312,000. Subtract the $50,000 exemption to get $262,000. At 5.5%, the tax is $14,410. The exemption reduces the base before the rate is applied; it does not reduce the $14,410 tax by $50,000.
Traps
Do not apply the 5.5% rate to federal taxable income without Florida adjustments and apportionment. Do not subtract the $50,000 exemption after computing tax. Do not assume an S corporation is always outside Florida tax; built-in gains can trigger it. Do not miss the May 1 due date or treat an extension as an extension to pay.