Sales and Use Tax Changes on Collier and Lee County for 2019
As many of you are aware, starting January of 2019, Collier and Lee County started implementing a Surtax rate on top of the imposed State Sales and Use Tax rate of 6%. There were also changes on the rate for commercial rental. All these changes present new burdens on the taxpayers to keep accurate records, on the reporting of the surtaxes, and on the charges made to their customers.
Collier and Lee were not imposing a surtax prior to the beginning of 2019. So, the reporting of the Sales and Use Tax were less complex if you only were doing businesses on those two counties in Florida. However, starting this year, the two counties not only started implementing a Surtax but to make things even worse, the surtax for the two adjacent counties are at different rates. Collier County started a 1% surtax for a total of 7%, while Lee County implemented a .5% surtax for a total of 6.5%. Also, the surtax is caped at the first $5,000.00 on a single unit sale or sales made in Bulk. Of course this rule also brings more confusion to the picture. Florida Rule 12A-15.004 Florida Administrative Code (“F.A.C.”), intends to bring clarification to the taxpayers and details the requirements to qualify for a Single Unit Sale or Bulk Sales. I also wanted to point out that some transactions do not qualify for the cap.
These changes present a challenge on small businesses using software that is not capable of taxing an item at different rates like the surtax cap intends for the taxpayer to use.
The Commercial rental tax has been reduced again for 2019 from 5.8% in 2018 to 5.7% starting in January 2019. Florida taxes commercial rental. We need to be specifically aware of anything else charged to the lessee like CAM or Real Estate Taxes, since the state of Florida considers these additional rental consideration and subject to the Sales and Use tax.
For any help navigating the Florida Sales and Use tax waters, please do not hesitate to contact me.