Introduction, Definition of Sales and Use Tax
Before diving into rules, rates, and reporting, it’s essential to understand the foundation:
What is Sales Tax and Use Tax?
Sales Tax is a consumption tax imposed by the state of Florida on the sale of most goods and some services. It is collected by businesses at the point of sale and passed on to the Florida Department of Revenue. In simple terms, the final consumer pays the tax, but the business acts as the collector and remitter.
Use Tax applies when a Florida resident or business buys a taxable item without paying Florida sales tax, usually from an out-of-state or online seller. In this case, the buyer is responsible for reporting and paying the equivalent tax directly to the state.
Although they are separate, Sales Tax and Use Tax are complementary. Both ensure that taxable purchases are fairly taxed, whether bought in Florida or imported from another location. This helps fund public services and maintain a level playing field for local businesses.
Understanding this distinction is key before learning who must collect, how to calculate tax, and what transactions are exempt. Let’s start from the ground up.