How to Register for a Sales Tax Permit in Florida

Throughout your career, you have been taking orders and been given directions on how to do your job. If you listened carefully and taken that experience in as a lesson, you must have built up a strong knowledge base about how to run a business and how to analyze the market.

However, whenever one considers leaving their job and starting their own business they are barraged with numerous warnings about the pitfalls of such a venture and to reasons for not starting their own company. But you are the one who has the power to decide and you should make your own mind about taking this step. Yes, it is a significant and daunting step in anyone’s career, but it comes with a number of rewards that far outweigh potential pitfalls.

But now you want to start your own business. The advantages are certainly worth it. By being your own boss you get to decide when and for how long you’d like to work and you set the rules the business will operate by. If, for example, you plan on starting a business in Florida, there are certain regulations you have to follow, but outside of that, you are the one pulling the strings. You also get to pick and choose what you work on, who your partners can be and who your employees will be. The initial steps can be hard, but if you put in the hard work to build something you are passionate about, all the perks of running your own business start coming in.

You will also find yourself facing a new challenge every day, meaning you will not fall into a monotonous, repetitive routine. Any tasks like that can eventually be delegated. While some get buried in work and tire themselves out, if set up properly, your own business will soon stop being viewed as work, but something you love and enjoy doing, something that will allow you to invest in yourself and your community. With all the work flexibility it will afford you, you will have the spare time you need to spend with your family, an aspect of life that often suffers when it comes up against work.

In any case, there are many positives in running your own business, but as noted, there are certain organizational and legal steps you need to follow to set up a business in the state of Florida. This guide will bring a short insight into steps needed to run a business and apply for permits such as tax permits in Florida. However, we strongly advise you contact relevant authorities, an attorney or a business advisor if you would like to familiarize yourself with the process in more detail.

Starting a New Business

Before you begin the legal process of setting up and registering your business in the state of Florida, there are certain preparatory steps you need to take to make sure that starting your own business is actually the right thing to do and to give yourself the best chance of success. The major part of the whole process of preparation and registration is a well-developed business plan. The business plan consists of several segments that include market analysis, product analysis, an initial feasibility study, revenue and profit predictions and expectations. The business plan will not only serve as a checklist to follow the progress of your business registration process, but it will also serve as a major tool that is required by the banks or any other financial institution if you go looking for additional or external funding to start back up your business.

However, first, we will focus on the feasibility study or start-up questionnaire if you would like to call it that. This is actually a set of questions every aspiring entrepreneur should ask themselves when considering setting up their own business. Are you ready to run a business on your own? Do you have the necessary skills and knowledge? Do you know the market, have you analyzed the market conditions? Is the business model you are proposing really sustainable in the current market conditions and will it be able to strive if the conditions change? These are only a few questions you have to ask yourself before plunging into the entrepreneurial waters.

Knowing the market conditions, the supply and demand relationship is key. But prior to looking into a market, you have to determine what sort of service you would like to provide or what type of a product you plan on selling. A mistake often made by eager entrepreneurs is entering a market because they have a personal attachment to a product. It might go in line with the ‘following your passion’ theme, but this could also be a stumbling stone. It is advised to start small, make a list of products you are comfortable working with and analyze the market conditions, seeking any potential market gaps where the products from your list could fit into.

An underserved market is probably the safest way to start a business as you have a healthy demand for a product and less competition from suppliers. This means you will be able to build a name for yourself, providing you deliver quality products and services to your clients. Once you have built a reputation and gained valuable experience, you should find expanding your business easier and be able to branch out into the markets you initially planned on serving.

These are all the steps you do prior to starting the legal business registration process in the state of Florida. If you’ve completed all of the above and developed a business plan, it is time to look into the business registration steps and requirements.

Registering a New Business in Florida

According to Florida’s Department of State, there are around two million registered businesses in the state making an $800 billion economy. To start your business in Florida, there are several steps you have to take. Most businesses require registration with the Department of State’s Division of Corporations (DOC) as it provides the right to companies to do business in Florida. Business types required to register with the Division of Corporations are for-profit entities, limited liability companies (LLC) and nonprofit organizations.

Sole proprietorships and a number of partnerships are not required to register with the DOC. However, they might require registering a fictitious name. This actually means that your first step is to decide which of the legal entities you would like to register.

If you plan on running a small operation, perhaps buying cheap wholesale merchandise to sell online from your home, you might look into a sole proprietorship as a business type. It is the simplest and most common business structure owned and is operated by a single person. There is no distinction between the business and the owner in legal terms, which means you are liable for all potential debts of the business. You might operate the business under your personal name, or register a fictitious name with the Division of Corporations.

If you plan on partnering with someone, you might look into the partnership options. The state of Florida allows registration of a general partnership where all partners share equal rights and responsibilities, and each partner is responsible for the partnership’s debts and obligations. A limited partnership, on the other hand, consists of a general partner and limited partners. This provides certain liability protection to limited partners that are not responsible for the actions or debts of the partnership, unlike general partners. However, this also limits their ability to manage the partnership.

You might also look into the corporation and limited liability company options. A corporation as a legal entity is independent of the owners, managers or shareholders. If an owner decides to quit or sell its shares, the corporation does not dissolve or seize to exist and operate. The limited liability company (LLC) has several differences as it is not required to hold shareholder meetings and does not have to comply with a number of corporate formalities. However, like the corporation, it offers liability protection to its owners.

If you have decided on the legal entity and you have to register with the DOC, you may do it online for-profit corporations, non-profit corporations or limited liability companies, or by downloading the articles of incorporation and articles of organization and mailing them to the Division of Corporations.

In addition to registering with the Department of State’s Division of Corporations, the majority of Florida businesses have to register with the Department of Business and Professional Regulation. You might also be required to obtain an occupational license. Should you require one, you can obtain it by registering with the local county. However, first determine whether your business needs an occupational license.

With all the required registration papers filed and complete, you should turn your attention to the most complex aspect of the registration process, the tax registration. It is time to turn your attention to the Florida Department of Revenue.

Florida Sales Tax Permits

In order to collect or pay tax in the state of Florida, you should contact the Department of Revenue. In case you are required to collect and pay tax, you must register before starting any business activities. The first step is to determine whether you need to register with the DOR for a sales tax permit. All business with a sales tax nexus is required to apply for a sales tax permit. A business has a sales tax nexus, or a significant presence in the state of Florida if it owns a property in the state, sells taxable property as retail, has an employee in the state or does repairs of tangible personal property in Florida. You also have a sales tax nexus if you rent, lease, or are licensed to use a real property. For detailed sales tax nexus requirements visit Florida Department of Revenue’s Sales and Use tax page.

Your next step is to determine whether the services you provide or the products you sell are taxable. In general, services are not taxable with certain exceptions, while dealing with tangible property is taxable, also with a few exceptions such as selling groceries or prescription medicine. If you do determine that you are required to register with the Department of Revenue for a sales tax permit, you can do this online, or by downloading the Florida Business Tax Application (Form DR-1) and filing it to the relevant address provided in the Contact Details section below.

When registering, you are required to provide information, which depends on the type of the business you are registering, namely its activities, location and an opening date. The Department of Revenue provides a chart of specific information required for registration. As it can be seen in the chart, businesses are required to obtain a Federal Employer Identification Number (EIN) with the Internal Revenue Service (IRS), which can also be completed online. As a sole proprietor you can use your social security number (SSN) instead, however, it is advisable to register for an EIN to avoid potential issues.

If you are registering online, the registration process is free of charge; however, mailing in the registration form comes with a $5 fee. The process is swift and you should have your ID within three business days. Once you acquire it, you will not need to renew the license.

Sales Tax Exemptions in Florida

While in some states you are required to file for a resale certificate separately, Florida’s Department of Revenue provides businesses with a Florida Annual Resale Certificate for Sales Tax (Annual Resale Certificate), which enables purchases and property rental tax-free. DoR notes that the Annual Resale Certificate, which expires each year on December 31 and has to be renewed, can be used for purchasing items that will be a part of a product you intend on selling, items for resale, services to resell, or for renting real property to re-rent as real property or tangible personal property.

However, you have to be careful with the exemption certificate as it cannot be used if you plan on using the purchased items yourself. Make sure you follow the regulations as there are civil as well as criminal penalties for fraudulent use of this certificate.

When purchasing items, you should provide a copy of your Annual Resale Certificate to the seller. However, you might also find yourself at the receiving end of the exemption certificate, in which case you have to keep a clear record of all the tax-exempt sales you made.

You can ask for a copy of the ARC and maintain it for a period of at least three years. Also, you may obtain a transaction authorization number using your customer’s Annual Resale Certificate number which means you are not required to copy of the ARC number. You can also verify the certificate online.

Since these certificates expire at the end of each year, a new one for the following year is made available by the Department of Revenue in November on its website. You can use your tax account details to obtain your certificate online.

Contact Details

Florida Department of Revenue

5050 West Tennessee Street,
Tallahassee, FL 32399
Taxpayer Assistance (not for property tax): 850-488-6800
Email: [email protected]
Local offices

Florida Department of State

R.A. Gray Building
500 South Bronough Street
Tallahassee, Florida 32399-0250
Phone: 850.245.6500

Department of State, Division of Corporations

Clifton Building
2661 Executive Center Cir.
Tallahassee, FL 32301
Phone Numbers

Department of Business and Professional Regulation

2601 Blair Stone Road
Tallahassee, FL 32399-1027
Phone: 850.487.1395

Share on social networks