Other Taxes Imposed on the Rental of Florida Real Estate

27 Sep

Other Taxes Imposed on the Rental of Florida Real Estate

In addition to U.S. income taxes, there are local and state taxes which may also require action on thepart ofthe owner. These taxes apply equally to all owners of rental real estate in Florida, whetherresident or nonresident. Below is a listing of other taxes which may apply to rental property:Florida Sales Tax:If your residential property is leased out for periods of 6 months or less, you arerequired to collect and remit Florida sales tax on the amount of rental income collected. Although thesales tax is imposed on the tenant, the property owner is ultimately responsible for the collection andremittanceof the tax to the Florida Department of Revenue. If you use a management company for yourproperty, please confirm that they are collecting and remitting the sales tax on your behalf. The currentsales tax rate in Sarasota County is 7% and the current rate in Manatee County is 6.5%.County Tourist Development Tax:Revenue from residential rentals of 6 months or less is subject to theTourist Development Tax. This tax is also imposed on the tenant, but the property owner is ultimatelyresponsible for thecollection and remittance the tax. Unlike the sales tax, which is paid to the FloridaDepartment of Revenue, this tax is paid to the county in which your property is physically located. If youuse a management company for your property, they should be collecting and remitting the touristdevelopment tax on your behalf. The current rate in Sarasota County is 5% and the current rate inManatee County is 5% of the amount of rental income collected.The focus of this article has been on residential rental real estate. The Florida sales tax is payable onincome from commercial rental real estate regardless of the term of the lease period.The countytourist development tax does not apply to commercial rental real estate.Even though the tenant is the party who should be bearing the cost, the owner is responsible for payingthe tax out of their own pocket if they neglect to collect from the tenant. Failure to timely file and remitthese taxes can result in substantial penalties and interest being assessed upon theowner of theproperty. It is imperative that the owner of the property register with the applicable agency as soon asthey become subject to these taxes so they can properly remit them on a timely basis.



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