Have You Been Keeping Up With Your Rent Tax?
Businesses in Florida have to deal with more taxes than in other states due to Florida’s unusual tax structure. Florida is only one of seven states that have no personal income tax, which means that businesses are taxed more heavily. But there is another tax that is unique to Florida, the rent tax, that has some business owners quite angry.
The rent tax is a tax on rent and utility expenses that only is charged to business owners. It’s much like a sales tax. Currently, the amount is 6% of the cost of rent, utilities, insurance, and certain other costs. This tax often shocks new business owners in Florida because it’s such an unexpected tax, but it can get you in a lot of trouble with the Florida DOR if you don’t keep up with it.
There has been a lot of lobbying lately to get the governor to reduce or repeal this tax, though it will be very tough. The tax brings in an enormous amount of money each year to Florida, around $1.5 billion dollars. Making up that shortfall will be extremely difficult without totally changing Florida’s tax structure, and likely raising the taxes on individuals. There are good tax reasons why people like to retire here, and good tax reasons why a lot of businesses don’t like to move their headquarters here. Even Disney, the powerhouse of Florida’s economy, doesn’t keep their headquarters in Florida!
Governor Scott has made a few attempts to whittle down the tax. In 2014 he asked the legislature to take off a half of a percentage point from the tax but was denied his request. Now he’s recommending that it be dropped to 5 percent in 2017, though his goal is to get rid of it completely. There are bills currently in the legislature to drop it to 5% and one to even get rid of it completely in a phased plan. But until the law changes, Florida businesses will have to deal with paying this tax on time to the Florida DOR.
Paying your taxes is an important duty. It keeps the state functioning and essential services paid for. But taxes can be extremely confusing as well. The state expects everyone to be aware of the tax code, but it’s too complex for most people to understand without years of study. Plus, there are always updates every year.
Payroll taxes often snag new business owners, but the rent tax is another one that brings people into our doors. Are you setting up a new business and need to know what you’ll need to set aside for taxes? Have you received notices from the DOR for not paying? Zuckerman Law are ready to help you. We’ve been serving South Florida’s tax needs for over 30 years. As Florida tax attorneys in Miami, we can do more than just balance your books. We can negotiate on your behalf before the Florida DOR and the IRS to strike out a deal that is in the best interests of your business.
If you have a tax question and you live in South Florida, call us today for a free no-obligation consultation.