Property Management Income Taxes In Florida

Updated August 7, 2026

20 min read

Florida has no personal income tax, which is often where the conversation about Florida rental taxes stops. For a management company it is where it starts: the taxes that actually apply here are sales tax on the right kind of rental, transient and tourist development taxes, reemployment tax if you have employees, and the county tangible personal property tax. Getting the sales tax question wrong in either direction, collecting when you should not or failing to when you must, is the common expensive mistake.

Everything below is sourced to Florida statutes, Department of Revenue guidance, and the IRS. Rates and thresholds move, so confirm the current figure against the citation before you rely on it.

Florida Has No Personal Income Tax

Florida imposes no personal income tax. The Florida Constitution bars the state from taxing the income of natural persons who are residents or citizens, and the Legislature has written that mandate into the corporate income tax code. For a property management company or a rental owner, this means Florida takes nothing off the top of rental profit at the individual level, but it changes nothing federally. Rental income is still fully taxable by the IRS and is still reported on Schedule E of Form 1040.

The Florida Constitution provides that no tax upon the income of natural persons who are residents or citizens of the state shall be levied by the state, or under its authority, in excess of the aggregate of amounts which may be allowed to be credited upon or deducted from any similar tax levied by the United States. Because no federal credit for state income tax exists, the practical effect is that Florida levies no personal income tax. (Fla. Const. art. VII, s. 5(a))
Article VII, Section 5 of the Florida Constitution was added by H.J.R. 7-B, 1971, and adopted in 1971, so the prohibition on personal income taxation is a long-standing constitutional provision rather than a statute the Legislature can change by ordinary bill. (Fla. Const. art. VII, s. 5, History note)
Florida's corporate income tax code states its own legislative intent as construing the code to avoid conflict with the mandate in Section 5, Article VII of the State Constitution that no income tax be levied upon natural persons who are residents and citizens of this state. (Fla. Stat. s. 220.02)
Florida's income tax is directed at artificial entities, meaning corporations, organizations, associations and other artificial entities that derive attributes not available to natural persons such as perpetual life, transferable ownership represented by shares, and limited liability for all owners. It is not directed at natural persons conducting business individually or in partnerships, limited liability companies classified as partnerships for federal purposes, estates, or testamentary trusts. (Fla. Stat. s. 220.02)
Sole proprietors, individuals, estates of decedents and testamentary trusts are exempt and do not have to file a Florida corporate income tax return. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Florida Corporate Income Tax)
Rental real estate income and loss is reported federally on Schedule E (Form 1040), Supplemental Income and Loss, which covers rental real estate, royalties, partnerships, S corporations, estates, trusts and residual interests in REMICs. The absence of a Florida personal income tax does not remove this federal reporting obligation. (IRS, About Schedule E (Form 1040))
IRS Publication 527, Residential Rental Property, is the controlling federal guidance on reporting rental income and expenses, including depreciation, for owners of residential rental property. (IRS Publication 527 (2025), Residential Rental Property)

Florida Corporate Income Tax

Florida does levy a corporate income and franchise tax, so the phrase 'no income tax in Florida' is only half true for a management company. The tax reaches corporations and any entity taxed as a corporation that does business, earns income, or simply exists in Florida. The rate is 5.5 percent of Florida net income, with a $50,000 exemption. Pass-through structures used by most small management companies, including sole proprietorships, partnerships, and single-member LLCs that are disregarded, are outside it.

The corporate income tax rate imposed on Florida net income is 5.5 percent for taxable years beginning on or after January 1, 2022. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Florida Corporate Income Tax)
Florida corporate income and franchise tax is imposed on all corporations for the privilege of conducting business, deriving income, or existing within Florida, including entities that are taxed federally as corporations. All corporations doing business, earning income, or existing in Florida are required to file, even tax-exempt organizations. (Florida Department of Revenue, Corporate Income Tax, Who Must File)
An exemption of $50,000, in effect as of December 31, 2015, is subtracted from adjusted federal income in calculating Florida net income. (Florida Department of Revenue, Corporate Income Tax)
A limited liability company classified as a corporation for Florida and federal income tax purposes must file a Florida corporate income tax return. A limited liability company classified as a partnership must file a Florida Partnership Information Return (Form F-1065) if one or more of its owners is a corporation, and those corporate owners must file their own Florida corporate income tax return. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Corporate Income Tax Filing Requirements)
A single-member limited liability company disregarded for federal and Florida income tax purposes is not required to file a separate Florida corporate income tax return. The income is reported on the owner's return, and if the owner is a corporation, that corporation must file Form F-1120 reporting its own income and the income of the disregarded single-member LLC. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Corporate Income Tax Filing Requirements)
S corporations that pay federal income tax and tax-exempt organizations that have unrelated trade or business income for federal income tax purposes must file a Florida corporate income tax return and pay any tax due. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Corporate Income Tax Filing Requirements)
Returns are filed on the Florida Corporate Income/Franchise Tax Return (Form F-1120) or, if qualified, the Florida Corporate Short Form Income Tax Return (Form F-1120A). The return is generally due on or before the first day of the fifth month following the close of the taxable year, or the 15th day following the due date without extension for filing the related federal return, whichever is later. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Corporate Income Tax Filing Requirements)
A corporation must file and pay electronically if it paid $5,000 or more in corporate income tax during the State of Florida's prior fiscal year (July 1 through June 30), or if it was required to file its federal income tax return electronically. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Corporate Income Tax Filing Requirements)

Federal Obligations That Still Apply

With no state income tax to plan around, the federal layer carries nearly all of the compliance weight for Florida rental owners and managers. Rental income and expenses go on Schedule E. Vendor payments trigger information returns, and the reporting threshold just moved: the long-standing $600 floor for Forms 1099-NEC and 1099-MISC rises to $2,000 for payments made after December 31, 2025. Depreciation of residential rental buildings runs 27.5 years.

Schedule E (Form 1040), Supplemental Income and Loss, is used to report income or loss from rental real estate, royalties, partnerships, S corporations, estates, trusts, and residual interests in real estate mortgage investment conduits (REMICs). (IRS, About Schedule E (Form 1040))
Form 1099-NEC, Nonemployee Compensation, must be filed for each person in the course of your business during the year to whom you have paid at least $2,000 for services. The prior threshold was $600, and the increase applies to payments made after December 31, 2025. (IRS, Instructions for Forms 1099-MISC and 1099-NEC; IRC s. 6041A)
Rents are reported in box 1 of Form 1099-MISC, and the instructions direct filers to enter amounts of $2,000 or more for all types of rents, replacing the prior $600 threshold for payments made after December 31, 2025. This is the box a management company uses when reporting rent disbursed to property owners. (IRS, Instructions for Forms 1099-MISC and 1099-NEC, Box 1, Rents)
For tax years beginning after 2025, the minimum threshold amount for reporting certain payments on certain information returns, and for performing backup withholding on those payments, increased to $2,000 and may be adjusted for inflation beginning in calendar year 2027. (IRS, Instructions for Forms 1099-MISC and 1099-NEC, What's New)
Section 6071(c) of the Internal Revenue Code requires Form 1099-NEC to be filed on or before January 31, using either paper or electronic filing procedures. (IRC s. 6071(c); IRS, Instructions for Forms 1099-MISC and 1099-NEC)
Under MACRS, residential rental property (buildings or structures) and structural components such as furnaces, water pipes and venting have a recovery period of 27.5 years under the General Depreciation System and 30 years under the Alternative Depreciation System. (IRS Publication 527 (2025), Table 2-1, MACRS Recovery Periods for Property Used in Rental Activities)
Other property used in rental activities has its own recovery periods. Computers and their peripheral equipment are 5-year property under both GDS and ADS, and property that does not have a class life and has not been designated by law as being in any other class is 7-year property under GDS and 12-year property under ADS. Additions and improvements such as a new roof take the same recovery period as the property to which they are made. (IRS Publication 527 (2025), Table 2-1, MACRS Recovery Periods for Property Used in Rental Activities)
For tax years beginning in 2025, the maximum section 179 expense deduction is $2,500,000, reduced by the amount by which the cost of section 179 property placed in service during the year exceeds $4,000,000. Land cannot be depreciated. (IRS Publication 527 (2025), What's New and What Rental Property Can't Be Depreciated)

Sales Tax On Rent, Briefly

This is the Florida topic most often reported incorrectly, because the law changed. Florida used to charge state sales tax on commercial rent, and that tax was repealed outright effective October 1, 2025. Long-term residential rent was never subject to it. What remains taxable is short-term or transient occupancy of six months or less, taxed at 6 percent under a separate statute. Management companies should treat commercial rent, long-term residential rent, and transient rent as three distinct categories.

Effective October 1, 2025, the state sales tax imposed on rent or license fees for the use of real property (commercial rentals) under section 212.031, Florida Statutes, is repealed. No state sales tax or discretionary sales surtax applies to rent or license fees for rental or occupancy periods beginning on or after October 1, 2025. Examples subject to the repeal include rentals of commercial office or retail space, warehouses, and self-storage units. (TIP No. 25A01-04, issued July 24, 2025; Fla. Stat. s. 212.031)
The repeal covers both the state sales tax and any associated discretionary sales surtax. The Department states plainly that discretionary sales surtax will not still apply after October 1, 2025. (TIP No. 25A01-04, Questions and Answers, item 7)
Sales tax and any applicable discretionary sales surtax continue to apply to rent or license fee payments for rental or occupancy periods through September 2025, even if payment is made on or after October 1, 2025. The Department's example is that a tenant paying August 2025 rent in October still owes the 2 percent state sales tax plus any applicable surtax. Delayed payment of rent for taxable rental periods does not avoid tax. (TIP No. 25A01-04, Excluded from Repeal and Q&A item 1)
The repeal did not touch sales tax imposed under section 212.03, Florida Statutes, which continues to apply to rentals or leases of living, sleeping, or housekeeping accommodations for six months or less (transient rentals), parking or storage spaces for motor vehicles in parking lots or garages, docking or storage spaces for boats in boat docks or marinas, and tie-down or storage space for aircraft at airports. (TIP No. 25A01-04, Excluded from Repeal; Fla. Stat. s. 212.03)
Florida's 6 percent state sales tax, plus any applicable discretionary sales surtax, applies to rental charges or room rates for the right to use or occupy living quarters or sleeping or housekeeping accommodations for rental periods of six months or less. Examples include hotel and motel rooms, condominium units, timeshare resort units, single-family homes, apartments or units in multiple unit structures, mobile homes, beach or vacation houses, campground sites, and trailer or RV parks. (Sales and Use Tax on Rental of Living or Sleeping Accommodations, GT-800034 (R. 10/25), What is Taxable)
Long-term residential rent is exempt. Rental charges or room rates paid by a person who entered into a bona fide written lease for continuous residence for a period longer than six months are exempt. (Sales and Use Tax on Rental of Living or Sleeping Accommodations, GT-800034 (R. 10/25), What is Exempt; Fla. Stat. s. 212.03(1)(a))
Where there is no written lease, the exemption can still be reached through occupancy. When a person has continuously resided at one transient accommodation for a period longer than six months and has paid the applicable tax on the rental charges for those first six months, the rental charges paid by that person are exempt on the seventh month and thereafter so long as that person continuously resides at that accommodation. (Sales and Use Tax on Rental of Living or Sleeping Accommodations, GT-800034 (R. 10/25), What is Exempt)
Section 212.03, Florida Statutes, is titled 'Transient rentals tax; rate, procedure, enforcement, exemptions' and imposes tax at 6 percent of and on the total rental charged for living quarters or sleeping or housekeeping accommodations, reaching hotels, apartment houses, roominghouses, tourist camps, trailer camps, mobile home parks, recreational vehicle parks, condominiums and timeshare resorts. The statute also exempts the rental of living accommodations in any building or group of buildings intended primarily for lease or rent to persons as their permanent or principal place of residence. (Fla. Stat. s. 212.03)

The distinction that matters day to day: a long-term residential lease is not subject to sales tax, a rental of six months or less is, and the separate state tax on commercial rent was repealed outright effective October 1, 2025. Older guidance still circulating online quotes a live commercial rent rate of 2 percent or higher; that is no longer correct for occupancy periods beginning on or after that date.

Registration And Recordkeeping

A management company that handles short-term rentals, or that collects rent on an owner's behalf, must register with the Florida Department of Revenue before it begins doing business, and must register each Florida business location. Registration produces a Certificate of Registration (Form DR-11) that has to be displayed, and an Annual Resale Certificate (Form DR-13). Records supporting every transaction must be kept for at least three years, and returns must be filed for every reporting period even when no tax is due.

A business that plans to engage in an activity subject to sales and use tax must register to collect, report and remit or pay Florida sales and use tax before it begins conducting business in Florida. Taxable business activity expressly includes leasing, licensing, or renting real property and leasing, licensing, or renting living, sleeping, or housekeeping accommodations. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Registering a Florida Business)
Registration is done online through the Department's website or by completing the paper Florida Business Tax Application (Form DR-1). Each Florida business location must be registered, except for communications services tax. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Registering a Florida Business)
After registering for sales and use tax, the Department mails a Certificate of Registration (Form DR-11), a Florida Annual Resale Certificate for Sales Tax (Form DR-13), an initial supply of returns (Form DR-15 or DR-15EZ) unless filing electronically, and Discretionary Sales Surtax Information (Form DR-15DSS). (Business Owner's Guide for the Major Florida Taxes, GT-300015, Registering a Florida Business)
The Certificate of Registration (Form DR-11) authorizes the business to conduct business at the address shown and must be displayed in a visible place at the business location. The Florida Annual Resale Certificate (Form DR-13) is used only for tax-exempt purchases or rentals of property or services intended for resale or re-rent, and is not for buying office equipment, computers or other supplies used by the business. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Displaying Your Certificate of Registration and Florida Annual Resale Certificate for Sales Tax)
Records supporting all transactions in the reporting period must be kept for at least three years from the date the return was filed or was required to be filed, whichever is later. If a business fails to file a return, files a substantially incorrect return, or substantially underpays the tax due, the Department may audit records for periods longer than three years. (Business Owner's Guide for the Major Florida Taxes, GT-300015, How Long to Keep Records)
The three-year retention rule is grounded in statute. In addressing the commercial rental repeal, the Department confirmed that generally you must retain suitable books and records for at least three years pursuant to section 95.091(3), Florida Statutes, and that this applies even to records for a tax that no longer exists. (TIP No. 25A01-04, Q&A item 6; Fla. Stat. s. 95.091(3))
Records to keep include sales and purchase invoices, receipts, statements, register tapes and other evidence of sales and purchases, sales tax exemption certificates and direct pay permits, Florida Annual Resale Certificates accepted from other dealers, resale verification and authorization numbers, purchase and sales journals, cash receipt and disbursement journals, general ledgers, and copies of returns and payments including electronic confirmation numbers. All records must be made available to the Department upon request, and failure to produce records or submitting a grossly incorrect or fraudulent report can bring criminal or civil penalties. (Business Owner's Guide for the Major Florida Taxes, GT-300015, How Long to Keep Records and Types of Records)
A registered dealer must file on time for each reporting period even if no tax is due, and must not skip reporting periods or roll a partial period into the next return. Dealers who paid sales and use tax of $200,000 or more (excluding local option surtax and transient rental taxes) during Florida's prior fiscal year of July 1 through June 30 must make estimated sales tax payments during the next calendar year, beginning with the December return due January 1. (Business Owner's Guide for the Major Florida Taxes, GT-300015, Estimated Sales Tax Payments and Tips for Filing Your Return)
When a business closes or is sold, a final return must be filed and all taxes due paid within 15 days after closing or selling. The final return must cover the period from the most recent return filing to the closing date. (Sales and Use Tax on Rental of Living or Sleeping Accommodations, GT-800034 (R. 10/25), Updating Your Business Information)

Recent Changes Worth Tracking

Effective October 1, 2025: Florida repealed the state sales tax on commercial rentals. Effective October 1, 2025, the state sales tax imposed under section 212.031, Florida Statutes, on rent or license fees for the use of real property is repealed, and no state sales tax or discretionary sales surtax applies to rent or license fees for rental or occupancy periods beginning on or after that date. The repeal covers commercial office and retail space, warehouses and self-storage units. (TIP No. 25A01-04, issued July 24, 2025; Sections 37 and 49, Chapter 2025-208, Laws of Florida)
Effective October 1, 2025, with final filings for periods through September 2025: The repeal also eliminated the associated discretionary sales surtax on commercial rent, and lessors whose sales and use tax account was used only to report commercial rentals must still file returns for reporting periods through September 2025, even if no tax is due, after which the Department updates the account status automatically. (TIP No. 25A01-04, Lessors of Commercial Real Property and Q&A items 7 and 8)
Effective June 1, 2024: Before the repeal, the commercial rent rate had already been cut twice. The state sales tax rate under section 212.031 on total rent charged for renting, leasing, letting or granting a license to use real property was reduced from 4.5 percent to 2.0 percent effective June 1, 2024. Rental charges paid on or after June 1, 2024 for rental periods of December 1, 2023 through May 31, 2024 remained subject to the 4.5 percent rate. (TIP No. 24A01-02, issued April 2024)
Effective July 1, 2025: Because of the commercial rental repeal, no new Florida Tax Credit Scholarship Program credit allocations related to commercial rentals are issued on or after July 1, 2025. Lessees may still use credits earned from contributions made before July 1, 2025 against state sales tax due on rent or license fees paid through September 2025. (TIP No. 25A01-04, Scholarship Funding Tax Credit Program for Commercial Rentals)
Effective January 1, 2026: Florida reemployment tax rates for 2026 run from a minimum of 0.0010 (0.1 percent), or $7 per employee, to a maximum of 0.0540 (5.4 percent), or $378 per employee, against the $7,000 taxable wage base. (Florida Department of Revenue, Reemployment Tax Rate Information)
Effective Payments made after December 31, 2025: Federal change affecting Florida property managers who pay vendors and disburse rent to owners: the information return reporting threshold rose from $600 to $2,000 for payments made after December 31, 2025, covering Form 1099-NEC nonemployee compensation and Form 1099-MISC rents, with inflation adjustment beginning in calendar year 2027. (IRS, Instructions for Forms 1099-MISC and 1099-NEC, What's New)
Effective Tax years beginning in 2025: Federal change affecting equipment purchases by Florida management companies: for tax years beginning in 2025, the maximum section 179 expense deduction is $2,500,000, reduced by the amount by which the cost of section 179 property placed in service during the year exceeds $4,000,000. (IRS Publication 527 (2025), What's New)

Tax is one half of Florida compliance. See our guide to Florida property management laws and regulations for licensing, trust account, and disclosure rules.

Getting It Right

Two habits prevent nearly every Florida tax problem a management company runs into. First, classify every rental by term at the point the lease is signed, because the six month line decides whether sales tax applies at all. Second, register before you collect: a company receiving rent on an owner's behalf generally has its own registration and remittance duty, separate from the owner's.

This guide is a starting point for professional managers, not tax or legal advice. For a specific filing, work with a Florida CPA, and confirm current rates and thresholds with the Florida Department of Revenue or the IRS.