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Taxes in Florida: Learn all you need
Sit back and relax in the waters of South Beach and let us explain which taxes in Florida you need to file.
Miami, often called the Magic City, is the second-largest city on the East Coast and one of the top destinations in the U.S. Known for its beautiful beaches, lively nightlife, and warm tropical weather, it’s a hotspot for both visitors and residents. But what about Florida’s tax system? Despite offering a high quality of life, the state stands out for its tax-friendly policies compared to many others.
Florida is one of the few states that doesn’t charge residents a state income tax, which is a big advantage for both individuals and businesses. However, there are still local and federal taxes in Miami that you should be aware of. In this article, we’ll break down each of these taxes, including their updated rates for 2025 and practical examples to help you determine if moving to Florida is the right choice for you.
Taxes for individuals in Miami, Florida
Taxes in Florida for individuals fall into two main categories: direct taxes, which apply to income and property, and indirect taxes, which are linked to consumption. Whether you’re an employee, freelancer, digital nomad, retiree, or student, you’re considered a natural person with specific rights and obligations based on your country of residence.
If you’re not a local resident, there are specific taxes in the U.S. for foreigners that you might want to check out in our post. Now, let’s take a look at the main taxes in Miami.
Federal income tax
As we mentioned earlier, Florida doesn’t charge residents a state income tax, but federal taxes still apply. In Miami, income tax is levied on earnings from various sources, including salaries, interest, dividends, rental income, and capital gains. The tax follows a progressive rate system designed to help reduce financial disparities, with the exact amount depending on annual income and filing status. Here are the current tax rates:
- 10% rate: For income up to $11,000 (individuals) or $22,000 (couples).
- 22% rate: For income between $44,726 and $95,375 (individuals) or $89,451 and $190,750 (couples).
- Maximum rate of 37%: For income over $578,125 (individuals) or $693,750 (couples).
- Example: An individual in Miami earning $50,000 per year will have to pay approximately $6,617 in federal taxes.
Real estate tax
In Florida, specifically in Miami, property taxes also apply to real estate purchases. The revenue from these taxes helps fund schools, public services, and other local expenses.
In Miami-Dade County, property taxes typically range from 1% to 1.1% of the assessed value. For instance, if you purchase a home valued at $300,000, your annual property tax would be between $3,000 and $3,300.
Sales tax
This tax is similar to VAT in other countries because it’s an indirect tax on goods and services bought by individuals, but there are some differences. Unlike VAT, which is a national tax, the sales tax in the U.S. is handled at both the state and local levels, so the rates can differ widely depending on the area. It is also only charged to the final consumer at the time of purchase.
- Rate: 7%, including 6% state and an additional 1% from Miami-Dade County.
- Exemptions: Non-prepared foods, prescription drugs and certain medical products.
- Example: If you buy a television for $1,000, you will pay an additional $70 in sales tax.
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Motor vehicle tax
In Miami, if you own a motor vehicle, you’ll need to pay these taxes in Florida. Having a car is important for getting around the city and exploring other destinations in the U.S. The registration fee for a new vehicle is $225, and there’s also an annual fee that varies based on the vehicle’s weight:
- Rate of $27.60: For vehicles up to 2,499 lbs (1,133 kg).
- Rate of $47.60: For vehicles weighing more than 3,000 lbs (1,360 kg).
Fuel taxes
In addition to the tax mentioned earlier, all vehicle owners are also required to pay fuel taxes in Miami. This is a levy that includes both state and local rates, and the revenue is used to fund roads and transportation projects.
Florida applies a rate of 35.9 cents per gallon of gasoline, for example, if you consume 50 gallons per month, you will pay about $18 per month in fuel taxes.
Lodging tax
Individuals who book a stay at a hotel, hostel, motel, or any other short-term accommodation are subject to a lodging tax. Depending on the location within Miami-Dade County, the rate can range from 6% to 7%. For example, if you book a room for $200 a night, the lodging tax would be between $12 and $14 per night.
Taxes for legal entities or companies in Miami
Businesses or legal entities in Florida are subject to a range of federal and local taxes aimed at funding infrastructure, education, and public services in Miami. These taxes are generally more affordable compared to other states, which is why many entrepreneurs choose this county to start or grow their businesses.
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1. Corporate income tax
For businesses and individuals, Florida does have a state corporate income tax, in addition to the federal one. This tax is applied to net annual profits after deducting operating expenses and other costs. Here’s more information about the rates:
| Corporate income tax | Rate |
| State rate | 5.5% of the taxable income of companies. |
| Federal rate | 21% according to IRS regulations. |
| Example | A company with profits of $1,000,000 would pay $55,000 to the state of Florida (5.5%) and $210,000 to the federal government (21%). Total: $265,000 per year. |
2. Commercial property tax
Just like for individuals, taxes in Florida are also required for commercial properties owned by businesses. These properties must pay an annual fee based on their assessed value.
The tax rate is similar to what we mentioned earlier, ranging from 1% to 1.1% of the assessed value in Miami. This revenue supports local services like education, public safety, and infrastructure upkeep. For instance, a commercial property valued at $2,000,000 would incur an annual tax of $20,000 to $22,000.
3. Employment tax
Another tax that businesses in Miami face is related to employment. For every employee hired, companies are required to pay federal and state fees that cover unemployment benefits, healthcare, and social security. Here’s a closer look at how this works:
- Social Security: Rate of 6.2% of the employee’s gross salary (up to a maximum of $160,200 in 2024).
- Medicare: Rate of 1.45% of gross salary with no limit.
- State unemployment insurance (SUTA): Initial rate of 2.7% of the first $7,000 of salary per employee.
- Federal unemployment insurance (FUTA): 0.6% on the first $7,000 of salary per employee (after applicable credits).
- Example: An employee with a salary of $50,000, the employer would pay $3,100 for social security and Medicare. Plus about $210 for SUTA and FUTA unemployment insurance.
4. Sales and use tax
In Florida, businesses that sell products or services subject to sales tax must collect and remit 7% of the total price to both the state and county. Additionally, if they purchase goods from out of state for use in Florida, they must pay a use tax, which is equivalent to the local sales tax. For example, if a business sells products worth $50,000 a month, it is required to pay $3,500 in sales tax.
5. Business licenses and permits
The Local Business Tax Receipt is a mandatory permit for any business operating in Miami. The fees vary depending on the type of business and location, typically ranging from $50 to $500 per year. Failing to obtain this license can result in severe penalties, including the closure of the business.
Tax benefits in Miami, Florida
Although taxes in Florida, particularly in Miami, are lower than in most other states, the counties have developed a tax advantage plan for both individuals and businesses, whether local or foreign.
Miami is a top tourist destination that generates substantial revenue for the country. This makes it advantageous for the city to attract international talent and businesses like hotels, restaurants, and shops, all aimed at offering top-notch services to its residents. To support this, Miami-Dade County provides the following incentives:
| Tax benefits | Details |
| No state income tax | Advantage for individuals or corporations such as LLCs or S Corporations, where business income is passed directly to the owners. |
| Incentives for economic development zones | There are areas of Miami such as Edgewater, Brickell or District 11 that offer investment opportunities for businesses. |
| Benefits for technology and R&D companies | State and federal tax credits for companies that invest in technology. |
| Business license exemptions | During the first years of operation of new startups. |
| Incentives for renewable energies and sustainability | Tax credits and subsidies, both at the state and local level, for companies committed to clean energy projects. |
Frequently asked questions about taxes in Florida
Although residents are exempt from state income tax, they are still required to pay federal income tax, sales tax (7%), and other taxes, such as property tax if they own real estate in the city.
Yes, Miami provides various tax incentives for businesses, including tax credits for tech projects, exemptions for startups, and economic development zones. Additionally, business entities like LLCs and S Corporations are not subject to state income tax.
The sales tax in Miami is 7%, which includes 6% for the state and an additional 1% for Miami-Dade County. It applies to the total price of taxable goods and services at the time of purchase. For example, on a $100 purchase, the tax would be $7.
Yes, any business operating in Miami is subject to federal and state taxes, depending on its structure and activities. Additionally, businesses are also required to pay an annual business license fee.
Failing to meet your tax obligations can lead to serious consequences, such as fines, penalties, business closure, or even jail time. The IRS and state authorities have ways to recover unpaid taxes, such as seizing assets or income, so it’s best to stay up to date with your tax payments.
