Florida draws entrepreneurs for one big reason: it doesn't tax personal income. That perk comes with a catch, though — an annual report deadline backed by a penalty nearly three times the size of the report fee itself. This walks through what actually goes into forming and running a business in the Sunshine State in 2026.
1. Which business structure fits you?
Four options cover almost every new Florida business, and each one trades off simplicity against protection differently.
- Sole proprietorship. Nothing to file, and legally there's no separation between you and the business. That simplicity comes at the cost of personal liability for everything the business owes.
- Partnership. The same setup as a sole proprietorship, except split between two or more people who share the liability along with the work.
- LLC. What most small Florida businesses end up choosing, largely because it puts a wall between your personal assets and the company's debts or lawsuits.
- Corporation (S-corp or C-corp). More filings and more formal structure, and generally not worth the overhead unless you're taking on investors or multiple shareholders.
Our business structure comparison goes deeper on how to weigh these against each other.
LLCs and corporations both register through the Florida Division of Corporations — the state agency known as Sunbiz. Sole proprietorships and general partnerships skip that step entirely, since neither has a formation document to file in the first place.
2. Register your business
Forming an LLC
To form an LLC, you file Articles of Organization through Sunbiz for a $125 fee, which already covers designating your registered agent. Online filings tend to process fast, usually within a couple of business days.
Every Florida LLC needs a registered agent — someone with a physical Florida street address who's reachable during business hours. Living in the state means you can act as your own agent at no cost, or you can hire a commercial service instead.
No Florida statute forces you to have an operating agreement. Draft one regardless, particularly if there's more than one member, because that document is what actually spells out how the company runs day to day.
Sole proprietorships and DBAs
There's no state filing for a sole proprietorship. But if you plan to operate under a name other than your own, Florida wants that fictitious name registered with the Division of Corporations — through Sunbiz again, which is a little unusual since most states push DBA registration down to the county level instead.
3. Get an EIN
The IRS issues an Employer Identification Number at no cost, and the online application rarely takes more than fifteen minutes. Even a single-member LLC with zero employees will need one to open a business bank account, bring on staff later, or file most business tax forms.
4. Check licenses and permits
There's no single statewide business license covering everyone. Instead, what applies to you depends on what you do and where: regulated professions need their own licensing, most cities and counties charge for a local business tax receipt, food businesses need health permits, and anyone selling taxable goods or services has to register for sales tax with the Department of Revenue. See professional licensing requirements by industry and, if you're working out of your house, zoning laws for home businesses.
5. Understand Florida taxes
The absence of a personal state income tax is Florida's biggest selling point for founders. That said, an LLC that elects C-corporation tax treatment does owe the state's 5.5% corporate income tax on its profits — pass-through LLCs and sole proprietorships never touch this.
Sales tax starts at a 6% state rate. Counties can then layer on a discretionary surtax of up to 2%, which puts the average combined rate around 7%, and as high as 8% in a handful of counties.
6. Stay compliant
Florida LLCs file an Annual Report through Sunbiz every year between January 1 and May 1, whether or not anything about the business has actually changed. That report costs $138.75. Wait past May 1 and the state tacks on a flat $400 late penalty — no exceptions — for a total of $538.75, and if it goes unpaid long enough, Florida administratively dissolves the LLC come September.
Florida business costs at a glance
| Item | Cost |
|---|---|
| Articles of Organization (LLC) | $125 |
| Annual Report (every year, due May 1) | $138.75 |
| Late annual report penalty | $400 |
| Registered agent service (optional) | $100 to $250/year |
| EIN | Free (IRS) |
| State income tax (individuals) | None |
| Corporate income tax (C-corp election) | 5.5% |
| State sales tax | 6% + up to 2% county surtax |
Frequently asked questions
Does Florida have personal income tax?
No. That's actually the single biggest reason founders pick Florida to begin with.
How much does it cost to form an LLC in Florida?
Articles of Organization run $125, and that fee already bundles in your registered agent designation.
What happens if I miss Florida's Annual Report deadline?
A flat $400 penalty gets added to the $138.75 report fee, so you're looking at $538.75 total, and the LLC can be administratively dissolved by September if it drags on.
When is Florida's Annual Report due?
Sometime between January 1 and May 1 every year — the filing is required even in years when nothing about the business has changed.
How high is sales tax in Florida?
The state charges 6%, and counties can add up to another 2%, landing most combined rates around 7%.
Fees and rates above come from the Florida Division of Corporations and Department of Revenue as of 2026, and they do change over time, so double check before you file. None of this is legal or tax advice. Talk to a Florida-licensed attorney or CPA about your specific situation.