Florida’s State sales and use tax rates

Find out interesting insights with Claudia Mejia , Managing director , Ikigai Edge

Moderated by Kate, Financial Technology Consultant at Hyperbots

Don’t want to watch a video? Read the interview transcript below.

Kate: Hello! My name is Kate. I’m a financial technology specialist here at Hyperbots. Today, I’m thrilled to have Claudia Meji as my guest. A little bit about Claudia: she’s the managing director at Ikigai. Hi, Claudia! How are you doing today?

Claudia Mejia: Hi, Kay, how are you? Thank you for having me.

Kate: I’m doing good. Thank you so much for asking. So let’s get on with the questions. Could you provide an overview of Florida’s State sales and use tax rates? How do these rates differ across goods and services?

Claudia Mejia: Florida has a sales tax of 6%. However, there are some surcharges that the counties can apply, so it can go up to 7.5%, depending on the county or the sale system. Usually, for general merchandising, it’s about the 6% plus the surcharge. For vehicles, there are extra charges for titles and registration. Also, for medical devices, certain products are exempt from sales tax.

Kate: Good. So moving on. Could you discuss some of the jurisdictions in Florida with notably high or low sales tax rates? How does this affect businesses?

Claudia Mejia: We have counties with the highest rates, like Duval County in Jacksonville, Hillsborough County in Tampa, and Leon County in Tallahassee. These are in the highest bracket, with a combined sales tax of up to 7.5%. Then, there are counties in the lowest bracket, like Citrus County and Lee County in Fort Myers, where rates are between 6% and 6.5%. This variability creates challenges for businesses, especially in ensuring the correct tax is applied during transactions and maintaining accurate pricing and administrative strategies.

Kate: Understood. How frequently do Florida sales tax rates change, and how can businesses stay updated on these requirements?

Claudia Mejia: The state sales tax is usually very stable, but county rates can change annually or temporarily, depending on funding needs like infrastructure projects. Businesses must stay updated with these changes and ensure their ERP systems are aligned to remain compliant with tax liabilities.

Kate: That makes sense. What are some of the primary resources available to businesses to stay informed about sales and use tax changes in Florida?

Claudia Mejia: The Florida Department of Revenue publishes these rates and makes them available to the public. They also release preventive publications about potential changes. Additionally, third-party software can automatically update tax rates. Hyperbots, for example, have AI capabilities to keep tax rates up-to-date, ensuring compliance.

Kate: What specific challenges do businesses face when managing compliance with Florida sales and use tax rules? Could you maybe share some examples?

Claudia Mejia: Tracking local state taxes can be an administrative burden. For example, failing to update ERP tables with new tax rates can lead to compliance issues and audits. It’s crucial to automate this process to avoid errors. Industries like vehicles and medical devices have specific exceptions and rules, so applying the correct tax for these products adds another layer of complexity.

Kate: Understood. How can artificial intelligence help businesses manage sales and use tax compliance more efficiently, especially with Florida’s parent local surtaxes and exemptions?

Claudia Mejia: AI can automatically apply the correct sales tax to transactions, reducing the need for manual intervention. It also handles exceptions, such as medical devices, by recognizing product-specific exemptions. AI can track revenue by location and provide predictive analytics, streamlining compliance efforts.

Kate: How can AI support companies during audits for sales and use tax compliance in Florida?

Claudia Mejia: AI can categorize and organize transactions by product and location, making it easier to identify errors in specific counties or items. This approach is far more efficient than manually reviewing thousands of transactions.

Kate: We have almost reached the end of our interview. How do you see the future role of AI in handling Florida sales and use tax compliance?

Claudia Mejia: AI is evolving from compliance management to providing strategic insights. It will enable businesses to predict changes in county tax rates and their impact on revenue and pricing strategies. Real-time dashboards and proactive alerts will keep companies competitive and informed.

Kate: That was really insightful. Thank you so much for coming today and taking the time to answer all our questions. Thank you, Claudia.

Claudia Mejia: Thank you, Kate.

Kate: Thank you so much.