Navigating Florida’s sales tax laws can be tricky with frequent changes and nuances in what’s taxed and various exemptions. Major updates were enacted in 2023 that all Florida businesses and residents need to understand, including expansions of temporary sales tax holidays, new permanent exemptions, and even a reduction in the tax rate on commercial property rentals.
This guide breaks down all the key 2023 Florida tax law changes in clear, actionable steps.
You’ll navigate the new referendum requirements for specific local option taxes, comprehend the reduction in the commercial property rental tax rate, delve into the details of sales tax holiday periods and the items exempted, calculate the fresh exemptions applicable to agriculture, renewable natural gas, baby products, and more.
Follow action steps for temporary back to school, disaster prep, freedom summer, and tool time holidays, understand the qualifications for energy star and gas appliance sales tax exemptions, and receive guidance on staying abreast of future updates.
SUMMARY
- Review Local Option Tax Referendum Rules
- Understand Commercial Property Rental Tax Rate Cut
- Learn Sales Tax Holiday Periods and Exemptions
- Calculate New Agriculture Exemption
- Understand Renewable Natural Gas Production Exemption
- Implement Baby and Toddler Product Exemptions
- Take Advantage of New Oral Hygiene and Safety Exemptions
- Review Energy Star and Gas Appliance Exemptions
- Stay Up to Date on Florida Taxes
Recap
1. Review Local Option Tax Referendum Rules
To stay informed about the latest developments in Florida’s tax policies, review local Orion tax referendum rules. Some local option taxes in Florida now have new referendum requirements to be renewed after expiring.
Key details involve holding a referendum to reenact within a 48-month window before the tax expires, with a limitation of appearing on the ballot once during this period before the effective date. The process includes the governing body adopting an ordinance, followed by requiring the approval of a majority of registered voters like you.
If you have a local option food and beverage or infrastructure tax expiring soon, confirm your local government is adhering to the new referendum prerequisites.
2. Understand Commercial Property Rental Tax Rate Cut
To stay proactive in handling tax matters within Florida, understand the commercial property rental tax rate cut. The state tax portion of Florida’s sales tax on commercial real property rentals will be reduced from 5.5% down to 4.5% effective December 1, 2023.
Take the necessary action by revisiting and recalculating the sales tax liability for your commercial property lease. Utilize the recently adjusted 4.5% state rate in your calculations, keeping in mind that the county rates remain unchanged.
This step ensures accurate and up-to-date financial planning in accordance with the modified state tax rate for commercial property leases.
3. Learn Sales Tax Holiday Periods and Exemptions
To stay prompt in managing tax issues within Florida, learn about the sales tax holiday periods and exemptions. Review exempt items and dates to properly administer sales tax holidays for your business.
Florida has several sales tax holiday periods in 2023 where certain goods are exempt from tax.
The back to school tax holiday, covering clothing/footwear under $100, school supplies, learning aids, and computers under $1,500, is scheduled for July 24, 2023, to August 6, 2023, and January 1, 2024, to January 14, 2024. The disaster prep tax holiday is set for May 27, 2023, to June 9, 2023, and August 26, 2023, to September 8, 2023.
The freedom summer tax holiday, including admissions, club memberships, water activity supplies, etc., is observed from May 29, 2023, to September 4, 2023. Lastly, the two-time tax holiday, applicable to select tools and equipment, is scheduled for September 2, 2023, to September 8, 2023.
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4. Calculate New Agriculture Exemption
To stay on the ball in managing tax affairs within Florida, calculate the new agriculture exemption.
Materials to construct or repair permanent or temporary fencing used to contain, confine or process cattle, including gates and energized fencing systems, are now exempt when used in agricultural operations on lands classified as such.
Take the following steps:
- Confirm your land qualifies as agricultural
- Ensure supplier has affidavit for fencing materials purchased
5. Understand Renewable Natural Gas Production Exemption
To stay responsive in managing tax concerns within Florida, understand the renewable natural gas production exemption.
Explore the new exemption for machinery and equipment, applicable to the production, storage, transport, compression, or blending of renewable natural gas primarily at a fixed location, with eligibility confirmed through a purchaser-provided affidavit.
Engage in the following proactive measures to effectively address the situation:
- Assess whether your renewable natural gas production equipment qualifies for the exemption.
- Supply the necessary affidavit to your supplier to confirm the intended use.
6. Implement Baby and Toddler Product Exemptions
To stay proactive in addressing tax concerns within Florida, implement the baby and toddler product exemptions. Numerous baby and toddler items, such as cribs, strollers, high chairs, monitors, and safety products, have been granted sales tax exemptions, alongside essentials like breast pumps, bottles, pacifiers, and teethers. Additionally, diapers, clothing, and shoes designed for children aged 5 and under are now included in the list of exempt products.
Take these action steps:
- Update POS system to reflect new baby product exemptions
- Presume kids clothing size 5T and smaller is exempt
- Obtain revised publication of exempt items from DOR
7. Take Advantage of New Oral Hygiene and Safety Exemptions
To stay ahead in managing tax affairs within Florida, take advantage of the new oral safety exemptions. Additional new exemptions in 2023 include manual and electric toothbrushes, toothpaste, mouthwash, dental floss, firearm safety devices like locks and storage containers.
Additionally, stop charging sales tax on oral hygiene or firearm safety products.
8. Review Energy Star and Gas Appliance Exemptions
To follow up with the Florida state taxes for 2023, review energy star and gas appliance exemptions. From July 1, 2023, to June 30, 2024, specific purchases benefit from exemptions:
This includes EnergyStar-rated washing machines, dryers, water heaters, and refrigerators priced under $4,500, as well as gas stoves/ranges (excluding portable camp stoves).
To prepare for these exemptions, take the following action steps:
- Identify which appliances you sell that qualify for the exemption.
- Adjust your POS systems to reflect the exempt status of these items.
- Inform your customers about the potential tax savings on these EnergyStar appliances.
9. Stay Up to Date on Florida Taxes
To remain vigilant in addressing tax issues within Florida, stay up-to-date on all Florida tax updates in 2023, the changes in previous years that’s still applicable and the new ones for 2024. Taxes change often in Florida. To stay current:
- Visit the Department of Revenue website frequently
- Create news alerts on changes from media outlets
- Meet with your tax professional to review your business situation
- Document relevant changes in your accounting systems
- Subscribe to updates from tax lawyer mailing lists
Recap
Navigating Florida’s complex sales tax laws becomes crucial with the significant changes introduced in 2023. This article breaks down the key updates, including expanded sales tax holidays, new permanent exemptions, and a reduction in the tax rate on commercial property rentals.
Understand the new referendum requirements for specific local option taxes, grasp the reduction in the commercial property rental tax rate, and learn about sales tax holiday periods and exemptions.
Calculate fresh exemptions for agriculture, renewable natural gas, and baby products, and stay informed about oral hygiene and safety exemptions. Leverage temporary sales tax holidays and review Energy Star and gas appliance exemptions, ensuring your business stays compliant and takes advantage of available tax savings.
Stay proactive by staying up-to-date on Florida tax changes, visiting the Department of Revenue website, creating news alerts, and consulting with your tax professional.
This post is to be used for informational purposes only and does not constitute legal, business, or tax advice. Each person should consult his or her own attorney, business advisor, or tax advisor with respect to matters referenced in this post. . For comprehensive tax, legal or financial advice, always contact a qualified professional in your area. S’witty Kiwi assumes no liability for actions taken in reliance upon the information contained herein.
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