Get your tax IDs in Florida

An EIN, if you need one, takes minutes online. Florida has no personal income tax, so there’s no state withholding to set up. The state registrations that may apply are sales tax, if you sell taxable goods or services, and reemployment tax once you have employees. Both go through the Florida Department of Revenue on one Florida Business Tax Application.

What’s different in Florida

• No personal income tax. In Florida, a sole proprietor, a partnership and an LLC taxed as a partnership pay no Florida income tax on business income. A C corporation, or an LLC that elects to be taxed as one, pays the 5.5% corporate income tax on Florida net income above a $50,000 exemption.
• Sales tax is 6% plus a county surtax. The discretionary sales surtax runs 0.5% to 2%, and some counties charge none. On an item of tangible personal property it applies only to the first $5,000 of the price; the cap doesn’t cover charges for prepaid calling arrangements, admissions, transient rentals and sales of services, which owe surtax on the full amount.
• Unemployment tax is called reemployment tax, and the Florida Department of Revenue collects it, not a labor department. You register for it on the same application as sales tax.

Do this

1. Get an EIN from the IRS if you need one. The IRS requires one if you have employees and for partnerships, corporations, nonprofits and most LLCs. It’s free and, if approved, issued immediately online. Form your LLC or corporation first. Don’t pay a website to apply for you.
2. Register with the Department of Revenue before you begin doing business if you’ll sell taxable goods or services. The Florida Business Tax Application is an online wizard that works out which taxes you register for, including sales and use tax and reemployment tax, among others. The paper version is Form DR-1. Allow three business days before checking the status of a new application. The same application adds reemployment tax later, when you hire.
3. Know your sales tax rate. The state rate is 6% on most sales, with a few exceptions such as electricity and amusement machine receipts. Your county’s discretionary sales surtax adds 0.5% to 2%, and some counties charge none; the Department lists each county’s rate on that page. The surtax stops at the first $5,000 of the price only for an item of tangible personal property. It doesn’t stop for charges for prepaid calling arrangements, admissions, transient rentals and sales of services, so a service business collects it on the whole charge. A business outside Florida that sells into the state registers once its taxable remote sales pass $100,000 in the previous calendar year.
4. File sales tax returns on time at the Department’s file and pay page. Form DR-15 and the payment are due the 1st of the month after the reporting period, late after the 20th. Most new businesses file quarterly; collecting more than $1,000 a year moves you to monthly. File every reporting period, even with no tax due. A late return or payment costs 10% of the tax, with a $50 minimum that applies even when no tax is due. Filing and paying electronically on time earns a small collection allowance, 2.5% of the first portion of the tax.
5. Know whether you owe corporate income tax. Every corporation doing business in Florida files Form F-1120 each year, even with no tax due, by May 1 for a calendar year, or the 1st day of the 5th month after a fiscal year ends (the 4th month for a June 30 year end). The rate is 5.5% of Florida net income after a $50,000 exemption, and a corporation that owes more than $2,500 a year makes estimated payments. For LLCs, an LLC taxed as a corporation files Form F-1120 and pays the corporate income tax; one taxed as a partnership or disregarded does not. S corporations are the exception: one that pays no federal income tax at the corporate level (line 23c of federal Form 1120S) doesn't have to file a Florida corporate income tax return.
6. Register as an employer when you hire. You owe reemployment tax once you pay $1,500 or more in wages in a calendar quarter, or have one or more employees in 20 weeks of a calendar year (4 or more employees for a 501(c)(3) nonprofit). Register with the Department of Revenue by the end of the month after the quarter in which you became an employer. A new employer pays 2.7% on the first $7,000 of each employee’s wages for the year. There’s no state withholding account, because Florida has no state withholding form. Workers’ compensation insurance is required at 4 or more employees, or 1 or more in construction, counting owners who are corporate officers or LLC members. Outside construction, a sole proprietor or partner isn’t counted as an employee unless they choose to be covered, and farm employers have their own threshold. The Division of Workers' Compensation, Florida Department of Financial Services publishes the rules and exemption forms.
7. Set up each new hire. Verify employment eligibility on Form I-9 within three business days after the first day of work; a private employer with 25 or more employees must use E-Verify. Report every new hire to the Florida New Hire Reporting Center, run by the Department of Revenue's Child Support Program within 20 days of the hire date. Employees fill out the federal withholding form only.

What you get back

• EIN: a nine-digit federal tax ID, shown on screen when approved. Print the confirmation letter.
• Sales tax: a Certificate of Registration, a Florida Annual Resale Certificate for Sales Tax (Form DR-13) for buying items you’ll resell, and tax return forms.
• Employer accounts: a reemployment tax account number and your initial rate from the Department of Revenue, once it finds you liable. Keep the notice; your quarterly reports use the number.

Not hiring yet? Sales tax, if you sell taxable goods or services, may be the only state registration you need for now. The county’s local business tax receipt is in Licenses and permits.