florida assignment of rights to refund of sales tax

Florida State Law on Refunds and Over-collection

A Florida judge determined that Oracle America, a software company, was ineligible for a tax refund filed with the state after the tax was over-collected.

Oracle, who had been selling electronic software to their customer Nielsen Co. since 2006, had collected sales tax on the entire product between February and May of 2015. However, this was not the correct tax treatment due to the manner of which the software was delivered and Florida’s surtax regulations.

Oracle charged Nielson tangible personal property taxes on sales that were electronically delivered and therefore would not have been subject to the tax. The tax that was collected was remitted to the Florida Department of Revenue. As opposed to a physically delivered product, electronically delivered products such as Oracle’s software are not subject to sales tax under Florida Ruling No. 09A-049.

Additionally, Oracle did not properly apply Florida Statue section. 212.054(2)(2)1 which would have only charged the surtax to the first $5,000 of the purchase price. Oracle charged the surtax to the full purchase price. Again, the collected tax was remitted to the Department of Revenue.

When Nielson discovered the excess tax paid, they requested a refund from Oracle, who denied the refund to Nielson before they were able to retrieve the excess tax from the department. While they were able to prove to the Department that excess tax was collected and paid in, they couldn’t receive the refund from the state as they failed to refund the taxes to the customer who actually paid the taxes.

This case highlights a couple of different areas that taxpayers should take into consideration when both requesting refunds for overpaid tax, as well as correctly taxing sales to customers. Firstly, keeping up with local statues is a necessity. As of July 1, 2021, Florida requires dealers doing business in Florida to collect and electronically remit sales tax. For a company like Oracle, who electronically delivers software, they are still required to collect sales tax on their products.

Finally, clear communication and detailed records can lead to greater success in securing refunds. Taking action in the correct order can not only save time but ensure a successful negotiation with the state Department of Revenue. Had Oracle refunded the excess tax before submitting a claim, they could have received their refund from the state department. A win for the company in this case, however, was their record keeping ability in such that they were able to provide that the taxes were collected, reported, and remitted. Ensure that your company is also keeping accurate records.

( Jardine, Christopher. “Florida ALJ Denies Oracle’s Sales Tax Refund Claim.” Tax Notes, January 19, 2023. Oracle Am. Inc. v. Dep’t of Revenue; Case No. 22-1053.   Technical Assistance Advisement, No. 09A-049 , Florida Department of Revenue, September 23, 2009,  ¶205-406 .)

Share this:

• Cancellation/Complaint Policy
• Privacy Policy

• IRS Solutions
• Hardship Status
• Innocent Spouse Relief
• Offer In Compromise
• Payment Plans
• Penalty Abatement
• More IRS Solutions
• IRS Problems
• Business Tax Problems
• IRS Letters
• Identity Theft
• Other IRS Levies
• Social Security Levy
• Unpaid Taxes
• Unfiled Tax Returns
• Wage Garnishment
• More IRS Problems
• State Tax Guides
• Connecticut
• Mississippi
• North Carolina
• Pennsylvania
• South Carolina
• More State Tax Guides
• Other Resources
• Common Tax Relief Forms
• Overview of IRS Fresh Start
• Cost and Pricing Guide
• Review of IRS Collection
• Review of Tax Filings
• Review of Various Tax Professionals
• Tax Settlement Options
• More Other Resources
• For Tax Professionals
• State Taxes
• Florida Sales Taxes

Guide to Florida Sales Taxes & Penalties

To sell goods or services in Florida, you must collect sales tax. You will face penalties and interest if you don't file or pay your Florida sales tax correctly and on time. Sales tax evasion can lead to criminal charges. 

To help you out, here is an overview of Florida's sales tax rules and penalties. 

How Much Is Florida Sales Tax?

Florida sales tax is 6% for most sales of goods, services, hotel rooms, and short-term rentals. The state also applies a 4% sales tax to amusement machine rentals, a 5.5% sales tax on leases and licenses of commercial property, and a 6.95% sales tax on electricity. 

Many counties also add a discretionary surtax rate, but with some sales, only $5,000 of the sale is subject to the county sales surtax. The state allows counties to assess sales surtaxes from 0.5% to 2.5%. 

For example, if you have a retail store or a restaurant in Miami-Dade County, you must assess the state sales tax of 6% plus the county's discretionary surtax of 1%. This makes the total sales tax 7%. If you sell a $100 item in this county, you must collect $7 in sales tax from the customer and remit that to the Florida Department of Revenue with your sales tax return. 

Who Needs to Collect Florida Sales Tax?

Essentially, anyone who sells products or services in Florida needs to collect Florida sales tax. If you sell any of the following types of items or services, you need to collect sales tax:

• Retail items
• Food and beverages from restaurants and caterers.
• Rent or lease payments for vehicles or other goods. 
• Repairs and alterations.
• Services such as burglar protection, nonresidential cleaning, and nonresidential pest control. 
• Admissions to amusement parks, sport games, etc. 
• Rent for commercial spaces.
• Rents for short-term (transient rental accommodations) such as hotels, campground sites, and RV parks 
• Memberships to recreation or fitness facilities. 
• Vending or amusement machines. 

When Are Florida Sales Taxes Due?

Sales tax returns and payments are due on the 1st of the month following the reporting period, but they are not late until after the 20th. The final due date is the next business day if the 20th falls on a weekend or holiday. For example, your sales tax return for March sales is due April 1st, but it is not late until after April 20th or the following business day. 

For your return to be on time, you must e-file, postmark, or deliver it in person by the 20th. Payments are considered on time if they are postmarked or delivered by the due date, but if you pay online, you must make the payment by 5 PM ET on the business day before the 20th. For instance, if the 20th falls on a Monday, you must make your e-payment by the previous Friday.

What Are the Penalties for Not Collecting Florida Sales Tax?

You can lose your business license if you don't collect Florida sales tax. The Florida Department of Revenue can issue a warrant for the delinquent sales tax, interest, penalties, and the cost of collection. The county sheriff can execute the warrant to seize your real or personal property. The state also has the right to garnish your bank accounts, wages, and payments from third parties such as clients. 

What Are the Penalties for Not Paying Florida Sales Tax?

Failure to pay Florida sales tax can lead to severe penalties. Under Florida state law, failure to file a sales tax return for six consecutive months is a felony. 

If you willfully attempt to evade Florida sales tax by submitting a false or fraudulent return, the state can impose an additional penalty of 100% of the tax due. For instance, if you owe $3,000, the penalty will be $3,000. 

You can also face the following criminal penalties for not paying Florida sales tax:

• For the first or second offense of not paying sales tax of less than $300 — second-degree misdemeanor and up to 60 days in prison. 
• For the third and subsequent offenses of not paying sales tax of less than $300 — third-degree felony and up to five years in prison. 
• Failure to pay sales tax of more than $300 and up to $20,000 — third-degree felony and up to five years in prison.
• Failure to pay sales tax of $20,000 or more but less than $100,000 — second-degree felony and up to 15 years in prison. 
• Failure to pay sales tax of $100,000 or more — first-degree felony and up to 30 years in prison. 

Unpaid sales taxes can add up quickly. If a business with $500,000 in annual revenue fails to pay state sales tax for the year, it will owe $30,000 for the year. Unpaid taxes at that level can lead to significant fines, penalties, and over a decade in prison. 

Penalties for Late Sales Tax Returns

If you file or pay late, you incur a penalty of 10% of the tax owed. This penalty applies monthly, and it can get up to 50% of the balance. For instance, if you owe $2,000 and don't pay for six months, you will incur a $1,000 penalty. 

The state assesses a minimum penalty of $50. For example, if your sales tax due is $3,000, the late penalty is $300. If your sales tax payment is $500 or less, the penalty is $50. 

You still must file if you don't owe sales tax for the month. If you don't, you will incur the $50 late penalty. The Florida Department of Revenue also assesses a late penalty if your return is incomplete. 

Can I Avoid Paying the Florida Sales Tax Penalties?

The best way to avoid sales tax penalties is to file a complete and accurate Florida sales tax return on time. However, you can apply for penalty relief. It is always better to contact the Department of Revenue before the agency contacts you. 

If you apply for penalty relief on your sales tax before the Department of Revenue contacts you, the Department of Revenue can waive some of your penalties. Still, there is a mandatory penalty of the lessor of $1,000 or 10% of the total tax due. Once the department contacts you, the mandatory penalty increases to the lessor of $5,000 or 20% of the tax due. 

Florida Sales and Use Tax Audit

The Florida Department of Revenue can do audits of sales and use tax. Generally, they will send notice DR-840, which is a full audit notice, or a DR-846, which is a limited audit scope notice. The taxpayer will have 60 days to prepare for the audit and may request certain documentation or information. It is important for businesses to be aware of these notices and their rights as they prepare for a sales and use tax audit. Businesses that deal with a lot of cash, such as restaurants may be subject to higher audit rates than most other Florida businesses.

How to File and Pay Florida Sales Tax

You can file your Florida sales tax return through the mail using Form DR-15 (Sales and Use Tax Return). Or file online with the Florida Department of Revenue . Filing online tends to be faster and easier. 

Where Do I Register My Business for the Florida Sales Tax?

You must register your business with the Florida Department of Revenue. You can register through the mail using Form DR-1 (Account Management and Registration). To register online, visit the state's online Florida Business Tax Application . 

Florida Sales Tax on Online Sales

If you sell goods online to Florida residents, you must register and pay sales tax if your Florida sales exceed $100,000 in the previous calendar year. This rule only applies to out-of-state dealers. You must pay Florida sales tax if you have a physical presence in Florida or are a Florida resident, even if your business is exclusively online. 

Get Help With Florida Sales Tax

If you have gotten behind on your Florida sales tax returns or payments, you have options. A Florida tax professional can help you file delinquent sales tax returns, negotiate payment arrangements , and deal with the Department of Revenue. Unfortunately, you generally cannot get a settlement (aka offer in compromise) on sales tax, but you may be able to compromise the penalties incurred.

To get help, reach out to a local Florida tax pro today that has experience with sales tax issues. They can answer your questions and help you find the best path forward. 

Find & Evaluate Licensed Tax Professionals to Solve Your Tax Issues

• About TaxCure
• Terms of Use
• Privacy Policy
• Tax Companies
• Professional Directory

What’s in DeSantis’ $1.07 Billion Florida Tax Relief Bill?

A new Florida tax relief package defines 2024 sales tax holidays and cuts taxes for families and businesses. Here's what's included.

• Newsletter sign up Newsletter

Gov. Ron DeSantis signed a $1.07 billion Florida sales tax relief bill into law on May 7. The legislation defines 2024 sales tax holidays and provides several tax cuts for businesses and families, including a one-year property tax exemption on home insurance premiums.

In a news release , DeSantis referred to the tax cuts as necessary, saying they will provide necessary tax relief for Floridians while the "D.C. political class shows no signs of reversing course on the inflationary policies of the federal government.”

Here's what tax cuts Florida residents can expect  — and when they take effect.

Subscribe to Kiplinger’s Personal Finance

Be a smarter, better informed investor.

Sign up for Kiplinger’s Free E-Newsletters

Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.

Profit and prosper with the best of expert advice - straight to your e-mail.

DeSantis' home insurance tax exemption

Florida typically imposes a 1.75% tax on property insurance policies, but eligible homeowners will soon enjoy an entire year of tax-exempt home and flood insurance premiums. 

The exemption only applies to residential policies with effective dates between Oct. 1, 2024 and Sept. 30, 2024. During this time, lawmakers expect Floridians to save more than $500 million.

2024 Florida sales tax holidays

Florida will run a two-week Back-to-School Sales Tax Holiday from July 29, 2024, through August 11, 2024. Like last year, the 2024 tax holiday will make several items, including clothing, computers, backpacks, and school supplies tax-exempt. 

While price limits apply, they are more generous than in many states. For example, eligible computer and computer software products can cost up to $1,500 and remain eligible for the exemption.

DeSantis also defined dates for three other Florida sales tax holidays this year:

• Freedom Month , which makes the purchase of certain recreational tickets, passes and admissions tax-exempt, will run from July 1 to July 31, 2024. (Admission to the events can be used from July 1 through the end of 2024.)
• The Skilled Worker Sales Tax Holiday , which makes certain tools, equipment and safety clothing tax-exempt, will run from Sept. 1  through Sept. 7, 2024.
• Florida will have two Disaster Preparedness Sales Tax Holidays this year (June 1 to June 14, 2024 and Aug. 24 –September 6, 2024). 

The Florida Disaster Sales Tax Holidays exempt items, such as generators and batteries, from sales tax to help Floridians prepare for natural disasters . But the tax holiday also exempts household items, such as toilet paper and trash bags. 

And even items to help families safely evacuate pets are tax-exempt. These include pet food, cat litter pans, and even hamster substrate.

Florida tax cuts

DeSantis' $1.07 billion tax relief package also includes tax cuts for business, which may indirectly benefit families. For example, the bill creates a tax credit for companies who operate or support a childcare programs for their employees. This could result in more employers offering childcare assistance to workers.

Also included in the bill is a new corporate income tax credit for businesses that hire persons with disabilities and an increase to the cap for the Strong Families Tax Credit , which incentivizes companies to make charitable contributions to child welfare organizations.

Related Content

• Five Reasons People Retire in Florida
• Will Florida Property Tax Be Eliminated?
• 10 Most Tax-Friendly States for Retirees

To continue reading this article please register for free

This is different from signing in to your print subscription

Why am I seeing this? Find out more here

Katelyn has more than 6 years of experience working in tax and finance. While she specialized in tax content while working at Kiplinger from 2023 to 2024, Katelyn has also written for digital publications on topics including insurance, retirement, and financial planning and had financial advice commissioned by national print publications. She believes knowledge is the key to success and enjoys providing content that educates and informs.

You can control some of these factors (how much you save), but others you can’t (how long you live), so there’s good news and bad news here.

By Andrew Rosen, CFP®, CEP Published 19 May 24

Activist investors take stakes in companies to boost shareholder value. While not always successful, these five examples show activist investing can work.

By Will Ashworth Published 18 May 24

• Contact Future's experts
• Terms and Conditions
• Privacy Policy
• Cookie Policy
• Advertise with us

Kiplinger is part of Future plc, an international media group and leading digital publisher. Visit our corporate site . © Future US, Inc. Full 7th Floor, 130 West 42nd Street, New York, NY 10036.