Does Florida Have a Income Tax? What Most People Get Wrong

You’ve probably heard the rumors. Maybe it was at a backyard BBQ or while scrolling through some "Move to Florida" TikTok. People love to brag about it. They say you get to keep every cent of your paycheck. But honestly, is it actually true? Or is there some hidden catch that hits you the moment you cross the state line?

Let's cut to the chase: Florida does not have a personal income tax. It's literally written into the Florida Constitution. You won't find a state-level 1040 form to fill out every April. For millions of people, this is the ultimate financial siren song. But before you go buying a one-way ticket to Miami or Orlando, you need to understand how the state actually keeps the lights on. Governments aren't charities. If they aren't taking a bite out of your salary, they’re getting that money from somewhere else.

Why the Florida Income Tax Ban is So Hard to Change

This isn't just a law that some governor signed on a whim. It’s deeper than that. The ban on a personal income tax is baked into Article VII, Section 5 of the Florida Constitution.

Think about that for a second.

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To change this, you can't just have a few politicians in Tallahassee vote it into existence. You’d need a massive constitutional amendment. We’re talking about a supermajority of voters—60%—agreeing to tax themselves. In a state that has built its entire brand on being a "tax haven," the odds of that happening are basically zero.

Governor Ron DeSantis and the Florida Legislature spent much of the 2024 and 2025 sessions doubling down on this. In early 2026, the rhetoric has only gotten stronger. There's even been talk about finding ways to slash property taxes even further for homesteads, though that’s a messy political fight for another day.

The "Corporate" Catch You Need to Know

While you don't pay income tax, your business might. This is where people get tripped up.

If you’re a freelancer, a sole proprietor, or you run a standard LLC where the profit "passes through" to your personal return, you’re usually in the clear. You won't owe Florida a dime in income tax.

But if you run a C-Corporation, or an LLC that chooses to be taxed like one, the state is coming for its cut. Florida has a 5.5% corporate income tax rate.

Now, there is a silver lining. The state gives businesses a $50,000 exemption. If your corporation makes $45,000 in taxable income, you owe nothing. If you make $100,000, you're only paying that 5.5% on the portion above the fifty-grand mark.

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Interestingly, for the 2026 tax year, the floating interest rate for underpayments has jumped to 11% for the first half of the year. So, if you do run a taxable entity, being late is getting a lot more expensive than it used to be.

Where Does the Money Actually Come From?

If Florida doesn't tax your $100,000 salary, how do they pay for the roads, the police, and those nice state parks?

They lean hard on three things:

1. Sales Tax
2. Property Tax
3. Tourists

The state sales tax is 6%. But wait—most counties add their own "discretionary surtax" on top of that. If you're buying a TV in Hillsborough County or Miami-Dade, you’re likely paying closer to 7% or 7.5%.

Then there’s the tourism tax. Florida is a master at taxing people who don’t live here. Every time a tourist rents a hotel room, grabs a rental car, or buys a $15 beer at a theme park, they are essentially subsidizing your lack of an income tax. Economists at the Florida Office of Economic and Demographic Research noted that tourists contribute roughly 16% to 18% of the state's total sales tax revenue.

The Real Cost of Property

Don't let the "no income tax" headline blind you to the property tax bill. Since there's no state income tax, local governments (counties and cities) rely heavily on real estate.

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Florida’s property taxes aren't the highest in the country, but they aren't the lowest either. According to the Tax Foundation, Florida ranks around the middle of the pack—28th in the nation—for property tax collections per capita. If you buy a million-dollar home on the coast, your annual tax bill might make your eyes water, even if your income tax bill is zero.

2026 Updates: What’s Changing This Year?

If you are looking at the 2026 landscape, there are a few specific shifts to watch. The Florida Department of Revenue recently issued several "Tax Information Publications" (TIPs) that change the math for some.

• Commercial Lease Tax: For a long time, Florida was the only state that taxed business rent. They finally killed that. As of late 2025, the state sales tax on commercial real property rentals was slashed to 2.0% and has been a major talking point for small business owners heading into 2026.
• Sales Tax Holidays: The state loves these. Expect the usual "Back-to-School" and "Disaster Preparedness" holidays where you can buy things like computers, batteries, and clothes tax-free. They’ve even experimented with "Freedom Summer" holidays that cover outdoor gear and event tickets.
• The Gas Tax: This is a sneaky one. Florida has a relatively high gas tax—about 39.4 cents per gallon when you factor in all the various state and local layers. You might save on your income tax, but you’ll pay for it at the pump.

The Bottom Line for Your Wallet

Is Florida actually cheaper? It depends.

If you are a high-earner—say you make $300,000 a year—moving from a high-tax state like New York or California to Florida is a massive win. You could easily save $15,000 to $25,000 a year just by changing your zip code.

However, if you are a lower-income earner, Florida can actually feel more expensive. Sales taxes are regressive. They take a larger percentage of income from people who have to spend most of what they earn on goods and services. Plus, the cost of car insurance and homeowners' insurance in Florida has absolutely skyrocketed in the last few years, often eating up any savings you got from the lack of an income tax.

Actionable Next Steps for New or Potential Residents

If you’re planning to take advantage of Florida's tax status, don't just wing it.

1. Establish Legal Domicile: You can't just spend two weeks in a Clearwater condo and claim you don't owe taxes to your home state. You need to file a Declaration of Domicile with the Clerk of the Circuit Court in your Florida county.
2. The 183-Day Rule: Most high-tax states will still try to claim you as a resident unless you can prove you spent more than half the year (183 days) outside their borders. Keep your receipts. Seriously.
3. Update Your Documents: Change your driver’s license, register your cars in Florida, and update your voter registration. High-tax states look for "hooks"—if your car is still registered in Jersey, Jersey is going to want its tax money.
4. File for Homestead Exemption: If you buy a home, file for the Homestead Exemption by March 1st. This knocks up to $50,000 off your home's assessed value for tax purposes and, more importantly, triggers the "Save Our Homes" cap, which limits how much your assessed value can go up each year.

Florida’s lack of an income tax is a powerful tool for building wealth, provided you don’t let the "hidden" costs of paradise catch you off guard.

For the 2026 tax season, ensure you have a clear record of your physical presence in the state to avoid any "residency audits" from your previous home. If you run a business, check with a CPA to see if your structure qualifies for that $50,000 corporate exemption or if you’re fully shielded under the personal tax ban.