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Sales Tax
Prices of goods and services in America are always shown and quoted exclusive of state sales tax, which accounts for some 70 per cent of state revenue. For example, sales tax is levied at 6 per cent in Florida, Individual counties are permitted to levy a discretionary surtax. In Florida, seventeen regions have a 6 per cent sales tax (Alachua, Brevard, Broward, Citrus, Collier, Franklin, Lee, Manatee, Marion, Okaloosa, Orange, Palm Beach, Pasco, Polk, Putman, St. Johns and Volusia), 7 have 6.5 per cent (Dade, Duval, Gulf, Hernando, Miami-Dade, Santa Rosa and St. Lucie), 1 has 6.75 (Hillsborough), 40 have 7 per cent (Baker, Bay, Bradford, Calhoun, Charlotte, Clay, Columbia, De Soto, Dixie, Flagler, Gadsden, Gilchrist, Glades, Hamilton, Hardee, Hendry, Highlands, Holmes, Indian River, Jefferson, Lafayette, Lake, Leon, Levy, Liberty, Madison, Martin, Nassau, Okeechobee, Osceola, Pinellas, Sarasota, Seminole, Sumter, Suwannee, Taylor, Union, Wakulla, Walton and Washington), and three have a 7.5 per cent sales tax (Escambia, Jackson and Monroe). Note that counties levy sales tax only on the first $5,000 of the actual purchase price.
Sales tax must be levied on short-term property rentals of less than six months’ duration, whether the rent is paid in America in US$ or outside America in a foreign currency. Leases for periods of six months or more aren’t subject to sales tax. Certain counties also levy additional taxes on short-term rentals. Most counties levy a local Optional Tourist Development Tax or Resort Tax of 2 to 5 per cent on property rentals, which when added to the sales tax makes a total of 11 per cent in some counties. A few counties have other taxes such as a 1 per cent Tourist Impact Tax (Monroe County) and a Convention Development Tax of 2 to 3 per cent (Dade, De Soto and Volusia).
Sales tax is payable to the state of Florida, while ‘tourist’ and other county taxes are usually payable to the county tax collector (although in a few counties they are all collected by the state). Note that all the above taxes and the rates at which they are levied are likely to change at short notice.
A sales tax certificate number must be obtained before letting a property by completing an Application for Sales and Use Tax Registration (form DR-i), which must be sent with the registration fee ($5) to the Florida Department of Revenue. You’re sent your sales tax number with a book of Sales and Use Tax Return forms (DR-is) on which to declare your monthly sales tax. A return must be filed by the 20th day of each month for income received in the previous month (e.g. taxes collected in January are payable by February 20th), even if you received no rental income for that month (when you file a ‘zero’ return).
When tax is paid by the 20th of the month you receive a 2.5 per cent discount of the first $1,200 due (a maximum of $30 per return). There are penalties for late filing. If applicable, you must also file a Tourist Development Tax or other tax application with the local county. If you have a US-based property manager or rental agent, he must declare and pay sales taxes on all property income, regardless of who lets it or receives the income.
Sales tax isn’t levied on all items, which vary from state to state and often appear to have been selected at random. In Florida, exemptions include groceries, drugs/pharmaceuticals, newspapers and magazines, school meals, legal and accounting services, and any other service which doesn’t involve the sale of a tangible item. When you’re planning to make an expensive purchase it may pay you to shop by mail-order ore via the Internet, as there’s no sales tax on mail-order purchases (except in states where the supplier has an office) and shipping costs are low within the continental US. Many people cross state lines (borders) to buy alcohol and cigarettes, as there are often wide variations in prices due to different tax levels.
Note that sales tax doesn’t apply only to new goods or goods sold by businesses, but also to private sales of certain used products, e.g. cars, motor homes, boats and aircraft. Sales tax is calculated on the amount paid for a used item (usually less any trade in) and is paid by the buyer. Find More information about sales tax >>
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