Florida Corporate Income Tax: Who Pays, the Exemption, the LLC That Elected S, and Form F-1120

Florida's reputation is the absence of a personal income tax, and for most owner-operated businesses — sole proprietorships, partnerships, S corporations, and LLCs taxed as any of them — that reputation holds: the business's profit passes to the owners' federal returns and Florida takes nothing from it. The exception is the corporation. Who pays: a C corporation (and an LLC that has elected to be taxed as a corporation) doing business, earning income, or existing in Florida pays the Florida corporate income tax — a flat rate (5.5 percent for tax years beginning on or after January 1, 2022 — the temporary s. 220.1105 reductions for 2019 through 2021 have run their course, and no rate change applies for 2025 or 2026) on federal taxable income, adjusted by Florida's additions and subtractions, apportioned to Florida, and reduced by the Florida exemption (the first US$50,000 of Florida net income). Who files but usually doesn't pay: an S corporation files Form F-1120 only if it has federal taxable income at the corporate level (the built-in gains tax, the excess net passive income tax) — otherwise it does not file (the F-1120 instructions require a return only from an S corporation that pays federal tax on its Form 1120-S); a partnership or multi-member LLC taxed as a partnership files Form F-1065 (an information return) if it has a corporate partner (required when any partner or member is a corporation, because the partnership's income flows into the corporate partner's Florida tax); a single-member LLC disregarded for federal tax is disregarded for Florida too — its income is the owner's (and if the owner is an individual, Florida takes nothing). The structure point for Florida businesses: an owner choosing between a C corporation and a pass-through in Florida weighs the Florida corporate tax on the C corporation's income — a real cost (5.5 percent on income above the exemption) that a pass-through avoids entirely in a state with no personal income tax; for an S corporation owned by Florida residents, the combined state tax on the business's income is zero. The computation: federal taxable income (from the federal Form 1120) with Florida adjustments — the add-backs (state income taxes deducted federally, the portion of bonus depreciation Florida requires to be added back — for property placed in service before January 1, 2027, the full s. 168(k) bonus is added back and recovered one-seventh a year over seven years beginning with the year of the addition; and for 2026, Florida's conformity law (chapter 2026-137) keeps s. 168(k), s. 179, s. 163(j), and s. 174 as they stood on January 1, 2025, so federal taxable income is first recomputed without the 2025 federal law's 100 percent bonus and research-expense changes), the subtractions (the prior add-backs being recovered, certain federal income items), and the net operating loss (Florida adds back the federal deduction and allows its own carryover — the federal loss times the Florida apportionment fraction, limited to 80 percent of income for post-2017 losses); then apportionment for a business that operates in several states: Florida uses a three-factor formula (property 25 percent, payroll 25 percent, sales 50 percent — s. 220.15), so a corporation with property and payroll outside Florida and sales into Florida pays on its Florida share; a corporation operating only in Florida apportions everything to Florida. The exemption: the first portion of Florida net income is exempt (US$50,000, prorated for a short year), so a small C corporation with modest Florida income owes little or nothing; the exemption is shared among members of a controlled group (one US$50,000 exemption for the group, divided equally among the Florida members unless all of them consent to an unequal split — s. 220.14(4)). Estimated payments: a corporation expecting more than US$2,500 of Florida tax makes four estimated payments (Form F-1120ES), due by the last day of the fifth, sixth, and ninth months and the last day of the tax year — May 31, June 30, September 30, and December 31 for a calendar-year corporation, not the federal 15th-of-the-month dates; underpayment interest and penalties apply. The return: Form F-1120 is generally due on the first day of the fifth month after the tax year ends, or the 15th day after the federal return's original due date if that is later (May 1 for a calendar-year corporation), with a six-month extension (Form F-7004, to November 1 for a calendar year) that is void unless the tentative tax is paid by the original due date. The Canadian-owned or foreign-owned corporation: a Canadian company's Florida subsidiary (a Delaware or Florida corporation) is a C corporation that pays federal tax and Florida corporate tax on its Florida-apportioned income — the cross-border expansion structure (the Canadian company expanding to Florida guide) — and a foreign corporation with a Florida branch (effectively connected income) files the Florida return on its U.S. income apportioned to Florida. The Florida emergency excise tax is gone (repealed for tax years beginning on or after January 1, 2012), so the other corporate item to watch is the documentary stamp tax on the corporation's notes (the Florida documentary stamp tax guide). The bookkeeping: the federal return as the starting point; the Florida adjustments tracked year to year (the bonus depreciation add-back's recovery schedule especially); the apportionment factors by state; the estimated payments on Florida's dates; the exemption allocation within a controlled group. The errors: a C corporation that thought Florida had no income tax (it has one for corporations); an S corporation filing F-1120 unnecessarily (or failing to file when it has corporate-level tax); the bonus depreciation add-back missed (the Florida return's most common adjustment); estimated payments made on the federal dates rather than Florida's; and a disregarded LLC owned by a corporation treated as if its income escaped Florida (it flows to the corporate owner's Florida return).

Key takeaways

• Florida has no personal income tax, but it taxes C corporations and LLCs taxed as corporations — a flat rate on federal taxable income, adjusted, apportioned, and reduced by an exemption on the first portion of Florida net income.
• Pass-throughs owned by Floridians owe no Florida income tax — S corporations file only if they have corporate-level federal tax; partnerships file an information return when a corporation is a partner.
• Florida decouples from some federal items — the bonus depreciation add-back and its recovery schedule are the most common adjustment.
• Multistate corporations apportion by property, payroll, and a double-weighted sales factor.
• Estimated payments follow Florida's own due dates (May 31, June 30, September 30, and December 31 for a calendar-year corporation), not the federal 15th.
• A Canadian company's Florida subsidiary is a C corporation that pays both federal and Florida corporate tax on its Florida income.

The Florida corporate tax file

Entity classification (C, S, partnership, disregarded) and the filing requirement it triggers. Federal Form 1120 as the base. Florida additions and subtractions; the bonus depreciation add-back recovery schedule. Apportionment factors by state. The exemption (and its controlled-group allocation). Estimated payments on Florida's dates (F-1120ES). The return (F-1120) and the extension (F-7004) with the tentative tax. The classification line is the one that decides whether any of the rest applies.

Worked example

Three Florida businesses. One: an HVAC company taxed as an S corporation, owned by two Florida residents, netting US$620,000 — no Florida income tax at any level (the S corporation has no corporate-level federal tax, so it files no F-1120; the owners live in a no-income-tax state). Two: a software company organized as a C corporation (its venture investors required it — the LLC-to-C-corp guide), with US$1.4 million of taxable income after the Florida adjustments, 70 percent of its sales and all of its payroll and property in Florida — an apportionment factor of 85 percent (25 percent property, 25 percent payroll, 50 percent × 70 percent sales), so US$1,190,000 apportioned to Florida, less the US$50,000 exemption, and US$1,140,000 at 5.5 percent — US$62,700 of Florida corporate tax; estimated payments on May 31, June 30, September 30, and December 31; and the federal 100 percent bonus depreciation on its US$300,000 of servers reversed in the Florida adjustments (Florida recomputes under the pre-2025-law rules, adds back the bonus that remains, and returns it one-seventh a year over seven years starting this year). Three: a Canadian manufacturer's Florida distribution subsidiary (a Delaware corporation registered in Florida) — federal Form 1120 on its U.S. income, Florida Form F-1120 on the Florida-apportioned share, the exemption applied, and the transfer pricing between the Canadian parent and the subsidiary documented (the Canadian company expanding to Florida guide). The software company's founders had assumed "Florida has no income tax" when they chose the C corporation — true for them personally, not for the corporation.

Official sources

The Florida Department of Revenue states: “A limited liability company (LLC) classified as a corporation for Florida and federal income tax purposes is subject to the Florida Income Tax Code and must file a Florida corporate income/franchise tax return.” — Florida Department of Revenue, Florida Corporate Income Tax, https://floridarevenue.com/taxes/taxesfees/Pages/corporate.aspx

The IRS explains: “S corporations are corporations that elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S corporations report the flow-through of income and losses on their personal tax returns and are assessed tax at their individual income tax rates.” — Internal Revenue Service, S corporations, https://www.irs.gov/businesses/small-businesses-self-employed/s-corporations

Practitioner note

Florida's missing personal income tax makes pass-throughs owned by Floridians the cleanest structure in the country — no state income tax at any level — and makes the C corporation's Florida corporate income tax easy to forget. Our Florida corporate files start with the entity's classification, because that decides whether any Florida return is due; then track the bonus depreciation add-back and its recovery schedule, apportion multistate income by the double-weighted sales formula, and pay estimates on Florida's own dates — because a founder who chose a C corporation for investors learns in May that 'no income tax' meant him, not the company.

See also: For related guidance, see the Florida tangible personal property tax and Form DR-405; and browse every small business tax guide, by situation.

Next step

Fairlight Accounting is a cross-border accounting and tax practice with a U.S. Tax Desk and a Canadian Tax Desk. Our U.S. Tax Desk handles Florida corporate income tax compliance — entity classification and filing requirements, Form F-1120 preparation with Florida adjustments, bonus depreciation add-back tracking, multistate apportionment, estimated payments on Florida due dates, and foreign-owned subsidiary returns. See pricing or book a call.