Taxes
Income Tax
WHO: Every business owner operating in theUnited States must file the appropriate income tax forms provided by the Internal Revenue Service. He or she must pay federal income taxes on their personal tax return for sole proprietorships, partnerships and S corporations, or at the corporate rate for C and personal service corporations (PSC). Sole proprietors, and individual owners of partnerships, S corporations and LLCs pay estimated taxes quarterly via owner’s IRS Form 1040-ES. C Corporations also pay quarterly estimated taxes. C Corporations which are required to file as PSCs are taxed at the highest corporate rate on net profits. PSCs have lost many of their tax advantageous but are popular due to their specialized protection against various forms of vicarious liabilities and the ability to deduct more employee benefits for the shareholders. Current personal and corporate income tax rates can be found on the IRS web site at www.irs.gov or by calling the IRS at (800) 829-1040.
C corporations inFloridamay also be required to pay state corporate income tax, depending on the amount of net income.
Employment Tax
WHO: Every business owner with employees must pay federal and state unemployment taxes and social security taxes, and may be subject to workers’ compensation. The employer must also withhold appropriate taxes from the employee’s gross pay. Sole proprietors, partners and single member LLCs are considered self-employed, and all net income is subject to self-employment (SE) tax but not unemployment tax. Half of the tax can be deducted on the personal tax return.
Sole proprietors and single member LLCs with employees, plus all partnerships, corporations and multiple member LLCs regardless of employees, must acquire an Employer Identification Number (EIN) using IRS Form SS-4. The form may be obtained via the IRS web site at www.irs.gov or from the local IRS or Social Security Administration offices. The EIN number may be obtained on-line at www.irs.gov, by telephone at (800) 829-4933, or by fax at (631) 447-8960. The number can also be acquired by mail fromIRSServiceCenter, EIN Operations,Holtsville,NY11742.
COMMENT: When a business makes application to the IRS for its EIN, the business is automatically added to the federal mailing list. The IRS provides free small-business tax kits designed to fully explain federal tax requirements. These kits may be ordered at no charge by calling the 800 number listed below or can be downloaded from the web site. Specify the applicable legal form of organization.
WHERE: (For federal income and employment tax information)
Internal Revenue Service
Taxpayer Assistance Center
Federal Office Building, Room 163
400W. Bay Street
Jacksonville, FL 32202
Phone: (904) 665-1040
www.irs.gov
To Order Federal Tax Forms: (800) 829-3676 (FORM)
WHERE: (For state corporate income tax information)
Florida Department of Revenue
921 N. Davis Street, Suite A-250
Jacksonville, FL 32209
Phone: (904) 359-6070
Unemployment Compensation
WHO: All businesses that employ one or more employees must pay this tax. Unless incorporated, the business owner is not considered an employee.
WHERE: All Florida counties
Unemployment Compensation Tax Office
(See addresses, phone numbers and web site under Florida Department of Revenue.)
FEE: The basic state tax through 2011 for all new employers is 2.7 percent of the gross payroll up to $7,000 of each employee’s earnings in a calendar year. After 10 quarters, the company is rated and, depending on the rating, a percentage currently between .36 percent (no previous claims) and 5.4 percent will apply. The federal government has a fixed FUTA tax rate of 6.2 percent, but with the maximum credit for timely payment of state unemployment taxes, the rate drops to .8 percent. When purchasing an existing business, the buyer may request the seller to transfer the experience rating with the sale if the previous rate and unemployment history is better than a new employer rate.
Tangible Tax
WHO: All businesses with tangible personal property are subject. This tax does not apply to inventory or state registered vehicles.
WHERE:
Flagler County
Tax Collector
1769 E. Moody Blvd.
Bldg. 2,Suite102
Bunnell, FL 32110
Phone: (386) 313-4160
www.flaglertax.com
FEE: Applicable tax returns must be filed annually on Form DR-405 by April 1 in every county in which a company has tangible property. The county will assess the tax in the fall based on fair market value each year at current ad valorum rate. There is a 25 percent penalty for late filing.
Real Estate Tax
WHO: All businesses owning real estate must pay this tax.
WHERE: All Florida counties
(See addresses, phone numbers and web sites listed under tangible tax information.)
FEE: The fee is assessed according to the value of land, the value of any improvements and the current ad valorum tax rate.
Sales Tax
WHO: All retail businesses must collect a six percent state sales tax on sales of tangible personal property, except for items specifically excluded such as groceries and prescription medicine, and must be registered with the State ofFlorida. Examples of other business activities responsible for collection of sales tax include: repairs or alterations to tangible personal property; rental or lease of real or personal property; selling or providing telecommunications services; operating vending or amusement machines; and providing a taxable service (investigative and crime protection services, interior nonresidential cleaning and nonresidential pest control). The combined sales tax forFlaglerCounty is seven percent (7%) which includes a one percent (1%) discretionary tax surcharge.
WHERE: Flagler County
(See addresses, phone numbers and web site under Florida Department of Revenue.)
FEE: $5 one-time application fee for sales tax number using Form DR-1.
COMMENT: The reporting of sales tax to the state is required monthly or quarterly as determined by the FDOR using Form DR-15.