Until recently, Florida required sellers to calculate sales tax using a “bracket schedule,” which determines how much tax applies to the portion of sales priced under $1.00. While other states also publish tax brackets, those schedules are readily broken down into a clear mathematical formula. This was not the case with Florida, which previously continued to publish brackets for all the possible combinations of state and local rates.
However, that all changed with the passage of Senate Bill 50, which phased out the bracket system, replacing it with a simple rule that looks to the third decimal of a tax calculation. If that decimal is five or more, the seller rounds up. If it’s four or less, they round down. This rule is entirely consistent with the requirements in most other states and is enormously simpler for remote sellers to understand and execute.
With respect to simplicity, Florida both giveth and taketh away. In 2022, there were 10 sales tax holidays/temporary exemption periods in Florida. Some lasting two weeks while others may apply for a full year. They covered all sorts of products, from children’s books and clothing to energy star appliances to fishing bait. Florida 2023 sales tax holidays are currently pending as House Bill 7063 is awaiting Governor DeSantis’ signature. There are no new proposed sales tax holidays/temporary exemption periods. However, there are potentially numerous new products that will be included in this year’s sales tax holidays/temporary exemption periods.
While reasonable sales tax holidays can be readily managed through tax automation, the Florida approach feels like the government providing a tax refund to their constituents while making businesses, including remote sellers, perform all the heavy lifting.
Florida sales tax is complex, but our experts have the details. Reach out if you still have questions.