What is Transient Rental Tax?

Transient rental tax in Florida is a tax levied on rentals of living accommodations for a period of six months or less. The tax applies to both private property owners and businesses engaged in short-term rentals, including vacation homes, condos, and apartments. This tax is in addition to the standard sales tax and is meant to generate revenue to support local tourism and infrastructure.

Key Aspects of Transient Rental Tax

1. Tax Rate: The transient rental tax rate varies by county. The state of Florida imposes a base tax rate of 6%, but counties have the authority to levy additional local taxes. Depending on where your property is located, the total tax rate can range from 6% to over 12%.
2. Definition of a Transient Rental: For tax purposes, a transient rental is defined as a rental period of six months or less. If a tenant stays for more than six months, the rental is not subject to transient rental tax, but it may still be subject to other types of taxes.
3. Who is Liable: Property owners or managers who rent out accommodations on a short-term basis are responsible for collecting and remitting the transient rental tax. This applies to both direct rentals and rentals managed through online platforms or property management companies.

Steps to Ensure Compliance

1. Register with the Florida Department of Revenue: Before you start renting out your property, you must register with the Florida Department of Revenue to collect and remit transient rental tax. You can register online through the department’s website.
2. Determine the Correct Tax Rate: Identify the total tax rate for your county. This includes the state rate of 6% plus any applicable county surtax. The Florida Department of Revenue provides resources and tools to help you find the correct rate.
3. Collect the Tax: When you rent out your property, make sure to collect the appropriate amount of transient rental tax from your guests. This tax should be added to the rental fee and clearly communicated to the tenant.
4. File and Remit the Tax: You must file periodic tax returns with the Florida Department of Revenue and remit the collected taxes. Typically, returns are filed monthly, but some smaller operators may be permitted to file quarterly or annually. Ensure you adhere to the filing deadlines to avoid penalties.
5. Maintain Accurate Records: Keep detailed records of all rental transactions, including the amount of tax collected, rental periods, and payment receipts. Proper documentation is essential for accurate tax reporting and for resolving any potential issues during audits.
6. Stay Updated on Local Regulations: Counties may have specific rules or additional requirements related to transient rental tax. Stay informed about any local ordinances or changes in tax rates that could affect your rental business.

Common Pitfalls to Avoid

1. Inaccurate Tax Collection: Failing to collect the correct amount of tax or forgetting to include it in your rental charges can lead to compliance issues and penalties.
2. Missed Filing Deadlines: Missing deadlines for tax filings or payments can result in fines and interest charges. Set up reminders or use accounting software to stay on track.
3. Non-Compliance with Local Regulations: Each county may have different rules or additional taxes. Ensure you are aware of and compliant with all local regulations to avoid surprises.

Conclusion

Navigating Florida’s transient rental tax can be complex, but understanding and adhering to the requirements is essential for successful property management and avoiding penalties. If you need assistance in determining the amount of tax you owe and where to remit, please feel free to reach out to me.

12A-1.061 Rentals, Leases, and Licenses to Use Transient Accommodations.

What is Florida Sales Tax?

Sales tax in Florida is a consumption tax levied on the sale of tangible personal property, as well as certain services, within the state. The standard rate is 6%, with additional local taxes that may increase the total rate depending on the county.

Sales Tax on Exports: The Basics

When it comes to exports, Florida’s sales tax rules are designed to avoid taxing goods that are shipped outside the state or country. Here’s what you need to know:

1. Sales Tax Exemption for Exports: Generally, sales tax does not apply to goods that are sold for export. This means that if your business sells goods that will be shipped directly to a location outside of Florida or the United States, those sales are typically exempt from Florida sales tax.
2. Documentation is Key: To qualify for the export exemption, it’s essential to maintain proper documentation proving that the goods were indeed exported. This includes shipping invoices, bills of lading, and other relevant documents that show the destination of the goods.
3. Sales to Resellers: If you sell goods to a reseller who will then export those goods, you must obtain a resale certificate from the buyer. This certificate indicates that the buyer is purchasing the goods for resale, and it helps you document that the sale is not subject to Florida sales tax.

Key Steps to Ensure Compliance

1. Obtain Proper Documentation: For each export sale, ensure you have adequate documentation. This includes:
   • Export Documentation: Shipping invoices, bills of lading, and export declarations.
   • Proof of Destination: Evidence that the goods were shipped to an out-of-state or international address.
2. Verify Export Status: Confirm that the goods are indeed being exported. The sale should be directly linked to the export, and the goods should not enter into Florida’s commerce before being shipped out.
3. Keep Detailed Records: Maintain comprehensive records of all export transactions. This helps ensure that you can provide the necessary documentation in case of an audit and demonstrates compliance with Florida’s tax laws.
4. Consult with Tax Professionals: Given the complexities of sales tax regulations, especially with international transactions, it’s wise to consult with a tax professional. They can provide guidance tailored to your business and help navigate any specific rules or exceptions.

Conclusion

Understanding Florida’s sales tax rules regarding exports is crucial for businesses engaged in international trade or dealing with out-of-state transactions. By ensuring you have the right documentation, understanding the exemptions, and keeping detailed records, you can avoid unnecessary tax liabilities and compliance issues.

For complex transactions or specific scenarios, consulting with a tax professional or legal advisor is recommended to ensure full compliance and to navigate any potential nuances in the law. Please feel free to contact me with any questions.

12A-1.0015 Sales for Export; Sales to Nonresident Dealers and Foreign Diplomats.

What is Florida’s Voluntary Disclosure Program?

Florida’s Voluntary Disclosure Program is designed to encourage taxpayers to come forward and rectify any tax obligations they may have overlooked or miscalculated. This program allows individuals and businesses to voluntarily disclose past tax liabilities to the Florida Department of Revenue and work out a resolution without facing the usual penalties that come with such lapses.

Why Participate in the Voluntary Disclosure Program?

1. Penalty Relief: One of the primary benefits of participating in the program is the potential to reduce or eliminate penalties. While taxpayers will still be responsible for paying the taxes owed along with any applicable interest, the program offers relief from additional penalties that might otherwise apply.
2. Avoiding Legal Action: By proactively addressing tax liabilities through the program, taxpayers can avoid more severe legal consequences, including audits or legal action that may arise from unreported or underreported taxes.
3. Peace of Mind: Coming forward and resolving past tax issues can provide peace of mind and allow taxpayers to focus on their current and future financial activities without the lingering stress of unresolved tax matters.

How to Participate in the Voluntary Disclosure Program

1. Assess Your Situation: Before initiating the process, conduct a thorough review of your tax records to determine if there are any past liabilities or discrepancies. This step is crucial in ensuring that all potential issues are addressed during the disclosure.
2. Contact the Florida Department of Revenue: Reach out to the Florida Department of Revenue to express your interest in participating in the Voluntary Disclosure Program. They will provide guidance on the process and the necessary steps to follow.
3. Submit a Disclosure Application: Complete the Voluntary Disclosure Application form. This form will require detailed information about your tax situation, including the types of taxes involved, the periods in question, and the reasons for the oversight.
4. Negotiate Terms: Once your application is reviewed, the Department of Revenue may work with you to negotiate the terms of the resolution. This typically involves paying the taxes owed plus interest, with penalties potentially being reduced or waived.
5. Implement Compliance Measures: After resolving past liabilities, take steps to ensure future compliance. This may include setting up better record-keeping practices, conducting regular internal audits, or seeking ongoing advice from tax professionals.

Key Considerations

1. Timeliness: Addressing tax issues promptly is important. The sooner you come forward, the more likely you are to benefit from the program’s penalty relief provisions. Delaying action could result in missed opportunities for penalty reduction.
2. Complete Disclosure: When participating in the program, ensure that you disclose all relevant information accurately. Partial or incomplete disclosures could lead to complications or disqualification from the program.
3. Professional Assistance: Consider consulting with a tax professional or attorney who specializes in tax issues to guide you through the process. They can help ensure that your disclosure is handled correctly and that you achieve the best possible outcome.

Conclusion

Florida’s Voluntary Disclosure Program offers a valuable opportunity for taxpayers to resolve past tax liabilities with reduced penalties and avoid potential legal issues. By coming forward and addressing these matters proactively, you can not only clear up past issues but also set the stage for future tax compliance and peace of mind. If you think you might benefit from the program, please don’t hesitate to contact me.

Rule 12-13.0075(8), F.A.C., Voluntary Self-Disclosure of
Liability.

What is a Florida Sales Tax Resale Certificate?

A Florida Sales Tax Resale Certificate is a document that allows businesses to purchase goods intended for resale without paying sales tax on those items at the time of purchase. Essentially, it acts as a tax-exempt pass for goods that will be sold to customers. The tax will be collected when the item is sold to the end consumer.

Why Use a Resale Certificate?

1. Cost Savings: By using a resale certificate, businesses avoid paying sales tax on inventory purchases. This can significantly reduce upfront costs, especially for businesses with high-volume or high-value inventory.
2. Cash Flow Management: Not having to pay sales tax on items that will be resold helps manage cash flow better, freeing up funds for other business needs.
3. Simplifies Record Keeping: Resale certificates streamline tax reporting by consolidating the tax-free nature of inventory purchases, reducing the complexity of financial record-keeping.

How to Obtain a Resale Certificate in Florida

1. Apply for a Sales Tax Certificate of Registration: Before you can use a resale certificate, you must be registered with the Florida Department of Revenue. You can apply online through the Florida Department of Revenue’s website or submit a paper application.
2. Complete the Resale Certificate Form: Florida uses Form DR-13, the Florida Sales Tax Resale Certificate. This form is available on the Florida Department of Revenue’s website. You’ll need to provide information such as your business name, address, and Florida Sales Tax Registration Number.
3. Distribute to Vendors: Once you have the resale certificate, provide it to your suppliers when making purchases. This certifies that the goods are intended for resale and not for personal use or business consumption.

Key Points to Remember

1. For Resale Only: The resale certificate is only valid for purchases of goods that are intended for resale. Using the certificate for items that will be used internally or for personal use is considered misuse and can lead to penalties.
2. Keep Records: Maintain copies of all resale certificates and related purchase invoices. This documentation is crucial in case of an audit and to substantiate the tax-exempt nature of your inventory purchases.
3. Renewal and Updates: If your business details change or if you need to update your resale certificate, ensure that you promptly update the information with the Florida Department of Revenue. This includes renewing your Sales Tax Certificate of Registration as required.
4. Avoiding Penalties: Misusing a resale certificate or failing to collect sales tax when required can result in significant penalties and interest. Ensure that you understand the rules surrounding sales tax exemptions and comply with them diligently.

Conclusion

A Florida Sales Tax Resale Certificate is a valuable tool for businesses looking to manage costs and streamline their operations. Always keep thorough records and stay informed about any changes in tax regulations to avoid any pitfalls.

For more detailed information or specific questions about your situation, consulting a tax professional or reaching out to the Florida Department of Revenue is always a wise move. Happy tax-saving!

Take deductions 

A deduction is an amount you subtract from your income when you file so you don’t pay tax on it. By lowering your income, deductions lower your tax, but do not result in a refund as it cannot reduce your tax below $0.

Claim credits 

A credit is an amount you subtract from the tax you owe. This can lower your tax payment or increase your refund. Some credits are refundable — they can give you money back even if you don’t owe any tax. 

Tax Deduction

A tax deduction reduces income subject to tax.

For each dollar of tax deduction, the reduction in tax liability is less than a dollar.

Assume that the tax rate is 15 percent and the tax deduction is $200.

At a 15 percent tax rate, a $200 tax deduction results in a $30 reduction in the tax.

Tax Credit

A tax credit is a dollar-for-dollar reduction in the tax liability.

For each dollar of tax credit, there is a dollar reduction in the tax liability.

Continuing with the example, assume that the tax credit is $200.

A $200 tax credit results in a $200 reduction in the tax liability. This is a dollar-for-dollar reduction in the tax liability.

With a $200 tax deduction, the total tax is $1,470.

With a $200 tax credit, the total tax is $1,300.

The taxpayer pays less tax with a $200 tax credit than with a $200 tax deduction.

Trust funds are special bank accounts in which the beneficiary of the funds in the account is different from the executor of the account. It is essentially a pool of money held in an account for a specific use, such as social security or unemployment tax. 

Trust fund taxes are income taxes, social security taxes and Medicare taxes you withhold from the wages of an employee as their employer. The taxes are called trust fund taxes because they are held in trust until they are paid to the Treasury

As their employer, you have the added responsibility of withholding taxes from their paychecks. You must pay your employees’ trust fund taxes along with your matching share of social security and Medicare tax to the Treasury through the Federal Tax Deposit System. When you pay your employees, you do not pay them all the money they earned. The income tax, employee share of social security tax and the employee share of Medicare tax that you withhold from the pay of your employees are part of their wages you pay to the Treasury instead of to your employees.

To encourage prompt payment of withheld income and employment taxes, including social security taxes, railroad retirement taxes, or collected excise taxes, Congress passed a law that provides for the TFRP. These taxes are called trust fund taxes because you actually hold the employee’s money in trust until you make a federal tax deposit in that amount. The TFRP may apply to you if these unpaid trust fund taxes cannot be immediately collected from the business. The business does not have to have stopped operating in order for the TFRP to be assessed.

Who Can Be Responsible for the TFRP

The TFRP may be assessed against any person who:

• Is responsible for collecting or paying withheld income and employment taxes, or for paying collected excise taxes, and
• Willfully fails to collect or pay them.

A responsible person is a person or group of people who has the duty to perform and the power to direct the collecting, accounting, and paying of trust fund taxes. This person may be:

• An officer or an employee of a corporation,
• A member or employee of a partnership,
• A corporate director or shareholder,
• A member of a board of trustees of a nonprofit organization,
• Another person with authority and control over funds to direct their disbursement,
• Another corporation or third party payer,
• Payroll Service Providers (PSP) or responsible parties within a PSP
• Professional Employer Organizations (PEO) or responsible parties within a PEO, or
• Responsible parties within the common law employer (client of PSP/PEO).

For willfulness to exist, the responsible person:

• Must have been, or should have been, aware of the outstanding taxes and
• Either intentionally disregarded the law or was plainly indifferent to its requirements (no evil intent or bad motive is required).

Using available funds to pay other creditors when the business is unable to pay the employment taxes is an indication of willfulness.

Employee business expenses can be deducted as an adjustment to income only for specific employment categories and eligible educators.

Taxpayers can no longer claim unreimbursed employee expenses as miscellaneous itemized deductions, unless they are a qualified employee or an eligible educator. They must complete Form 2106, Employee Business Expenses, to take the deduction.

If someone falls into one of these employment categories, they are considered a qualified employee:

• Armed Forces reservists
• Qualified performing artists
• Fee-basis state or local government officials
• Employees with impairment-related work expenses

No other type of employee is eligible to claim a deduction for unreimbursed employee expenses.

Here’s what makes something a qualified expense:

• Paid or billed during the tax year
• For carrying on a trade or business of being an employee, and
• Ordinary and necessary

What Is Fair Market Value (FMV)?

To figure how much you may deduct for property that you contribute, you must first determine its FMV on the date of the contribution. This publication focuses the valuation of noncash property being contributed after January 1, 2019, to a charity that qualifies under section 170(c) for an income tax charitable contribution deduction.

FMV. FMV is the price that property would sell for on the open market. It is the price that would be agreed on between a willing buyer and a willing seller, with neither being required to act, and both having reasonable knowledge of the relevant facts. In addition to this general rule, there are special rules used to value certain types of property such as remainder interests, annuities, interests for life or for a term of years, and reversions, discussed below.

Used Clothing

Used clothing and other personal items are usually worth far less than the price you paid for them. Valuation of items of clothing does not lend itself to fixed formulas or methods.

The price that buyers of used items actually pay in used clothing stores, such as consignment or thrift shops, is an indication of the value.

You can’t take an income tax charitable contribution deduction for an item of clothing unless it is in good used condition or better. An item of clothing that is not in good used condition or better for which you claim an income tax charitable contribution deduction of more than $500 requires a qualified appraisal and a completed Form 8283.