How to Calculate Discretionary Sales Surtax in Florida

The Florida Discretionary Sales Surtax is an additional local sales tax that counties in Florida can choose to impose. This tax supplements the statewide sales tax and is specifically designed to generate revenue for local projects, such as infrastructure improvements, public safety initiatives, and educational programs. The application of this surtax varies by county, meaning that not all counties will have one, and those that do will have differing rates.

Understanding Discretionary Sales Surtax

The discretionary sales surtax operates as an optional tax levied by individual Florida counties. While the state’s general sales tax rate is 6%, counties have the authority to impose an additional surtax, which typically ranges from 0.5% to 2.5%. This county-level tax is applied to most transactions already subject to the state sales tax.

Transactions commonly subject to this surtax include the sale of tangible personal property, certain services, rentals, and admissions. Examples of these taxable transactions include the delivery of taxable goods or services into a surtax county, events for which admission is charged within a surtax county, or the consumption of electricity in a surtax county. Registered sales tax dealers, including those outside Florida, must collect this surtax if they sell and deliver taxable goods or services into a county that imposes it.

Determining the Applicable Surtax Rate and Cap

The Florida Department of Revenue’s website provides an updated Discretionary Sales Surtax Information form (Form DR-15DSS) and an Address/Jurisdiction Database, which can be used to find the applicable rates for any Florida address. For businesses, determining if a specific county levies the surtax and what types of transactions are covered involves consulting official resources, such as the Florida Department of Revenue’s website, which provides current surtax information and an address lookup feature. These rates are subject to change, with new surtax rates typically becoming effective on January 1st of each year.

A key aspect of the discretionary sales surtax is the sales price cap, which limits the amount of a single item’s sales price subject to the surtax. For tangible personal property, the surtax applies only to the first $5,000 of the sales amount. This $5,000 cap does not apply to certain types of transactions, such as the rental of real property, transient rentals, or services, where the surtax is applied to the full amount.

For instance, if a $7,000 refrigerator is sold in a county with a 1% discretionary sales surtax, the 1% surtax would only apply to the first $5,000 of the refrigerator’s price, resulting in $50 in surtax ($5,000 x 1%). This differs from the statewide 6% sales tax, which is applied to the full $7,000, totaling $420. The purpose of this cap is to prevent the surtax from becoming overly burdensome on high-value purchases. It is important to distinguish between single items, items sold in bulk, or items that comprise a working unit, as the $5,000 limitation applies per single item or per qualifying unit.

Performing the Surtax Calculation

Calculating the discretionary sales surtax involves applying the identified surtax rate to the appropriate taxable amount, taking into account the $5,000 sales price cap for tangible personal property. First, determine the total sales price of the item or items. Next, identify if the transaction involves tangible personal property and if any single item exceeds the $5,000 cap. The surtax is then calculated on the portion of the sales price that is subject to the surtax.

For a single item below the sales price cap, the calculation is straightforward. For example, if a $100 item is sold in a county with a 1% surtax, the discretionary sales surtax would be $1.00 ($100 x 0.01). This amount is then added to the state sales tax (e.g., $100 x 0.06 = $6.00) for a total tax of $7.00. The total amount paid by the customer would be $107.00.

When a single item exceeds the $5,000 sales price cap, the surtax calculation changes. If a $6,500 item of tangible personal property is sold in a county with a 1% surtax, the surtax is only applied to the first $5,000. Therefore, the discretionary sales surtax would be $50 ($5,000 x 0.01). The remaining $1,500 of the sales price ($6,500 – $5,000) is not subject to the surtax. The statewide 6% sales tax, however, would still apply to the entire $6,500, resulting in $390 ($6,500 x 0.06). The total tax collected would be $440 ($50 surtax + $390 state tax).

For multiple items in a single transaction, the $5,000 cap is applied per qualifying single item, working unit, or bulk sale. If a customer purchases a $3,000 item and a $4,000 item, and both are tangible personal property, the surtax would be calculated on each item’s full price, assuming the county has a surtax. If the surtax rate is 1%, the surtax for the first item would be $30 ($3,000 x 0.01) and for the second item would be $40 ($4,000 x 0.01). Businesses must use a rounding algorithm when calculating sales tax, carrying the computation to the third decimal place and rounding up if the third decimal place is greater than 4.

Reporting and Remitting Discretionary Sales Surtax

After calculating the discretionary sales surtax, businesses are required to report and remit these funds to the Florida Department of Revenue (DOR) along with the statewide sales tax. Businesses typically report sales and use tax, including the discretionary sales surtax, using Form DR-15, the Sales and Use Tax Return. This form includes specific lines to report taxable sales not subject to the discretionary sales surtax, such as the portion of single items exceeding the $5,000 cap.

The DOR assigns filing frequencies—monthly, quarterly, semiannually, or annually—based on a business’s total sales and use tax collected. Most new businesses are initially set up for quarterly filing. For businesses that collected $5,000 or more in sales and use tax during the state’s prior fiscal year (July 1 to June 30), electronic filing and payment become mandatory for the next calendar year.

Sales and use tax returns and payments are generally due on the 1st and considered late after the 20th day of the month following each reporting period. For electronic payments, initiation must occur by 5:00 p.m. ET on the business day prior to the 20th to be considered timely. Businesses can file and pay sales tax online through the Florida Department of Revenue’s secure web application. Paper filing using Form DR-15 is also an option, particularly for businesses with less than $5,000 in annual sales and use tax revenue, though electronic filing is encouraged. Timely electronic filing and payment may also entitle businesses to a collection allowance, which is 2.5% of the first $1,200 of tax due, not to exceed $30.