Federal and State Tax Issues
Florida residents do not have to pay a state income tax, but have other taxes that they owe. Individuals who own businesses and tangible personal property may be required to pay sizable taxes to the state. It can be challenging to understand Corporate Income Tax and Tangible Personal Property Tax. Attorney Mary King is based in Sarasota Florida and can help you to fulfill your legal obligations and reduce your tax liability.
Corporate Income Tax in Florida
If a company generates its profits in the state of Florida, they will owe the state corporate income tax. This is so whether they are located inside the state or elsewhere. Even if there are no taxes due, they will still have to file an informational tax return every year. Each type of business tax structure has its own set of regulations, which can make corporate income tax confusing. Here are some examples:
• If an LLC is taxed as a corporation, it will be necessary to file a Florida corporate tax return
• An LLC that is taxed as a partnership may be required to file Florida Form F-1065
• Single member LLCs are not subject to Florida corporate income tax except when that single member is a corporation. If a corporation is the owner of that LLC, then it will have to file Florida form F-1120
• If an entity has elected to be taxed as an S corporation or if it is exempt from taxes, it will not have to file a corporate income tax return in Florida. The exception in both cases is if the entity is subject to federal income tax.
Numerous Regulations Govern Tangible Personal Property Tax
The following individuals are subject to taxes on tangible personal property:
• Business owners
• Workers who are self-employed
• Independent contractors
The definition of tangible property under Florida Law is as follows: all goods and articles of value that can be manually possessed and where the main value is intrinsic to the article. This includes items such as signs along with furniture, equipment and computers; however, it excludes vehicles and anything related to them. Those who own tangible personal property are required to file a Form DR-405 prior to April 1, or they can file an extension by that deadline. If they fail to file the form or an extension, they may be subject to penalties. Each tax return can get an exemption of no more than $25,000 based on the property’s value. If the property has more than one owner, each owner can qualify for the $25,000 exemption. If a business has multiple locations, each business location will have to file its own DR-405 form with its $25,000 exemption.
The rules that govern Tangible Personal Property Tax are hard to figure out. The result is that many business owners find themselves filing multiple forms but still are still uncertain as to whether they are meeting all of their legal obligations or are paying the right amount of tax. The Law Office of Mary King is an experienced law firm that has considerable experience in tax law. Attorney Mary King will act on your behalf to get the deductions that you are allowed under the law.
If you are in Southwest Florida, contact the Law Office of Mary King in Sarasota. Attorney Mary King can help with your state and local taxes.