What to do if you haven’t filed sales tax
If you’re registered, but running behind on your regular filings…
Businesses that are registered for sales and use tax in the state of Florida will file on a monthly (the most common), quarterly, or yearly basis. Regardless of the filing frequency, the Department requires all Florida sales tax returns to be filed by the 20th of the month following the reporting period. If the return is postmarked just one day after the 20th, then the return usually is late. The exception is if the 20th falls on a Saturday, Sunday, or federal/state legal holiday. If that is the case, then the return will be considered timely-filed if postmarked on the next succeeding workday.
Electronically-filed Florida sales tax returns are due by the 20th of the month following the reporting period as well. However, electronic payments must be initiated even earlier. The business must initiate the payment and the payment must be accepted on the business day before the 20th of the month. For such electronic payments, the next-workday standard is not applicable. Instead, the hard and fast deadlines for electronic payments for 2024 can be found at the end of this article.
Once the 20th or following workday passes, the return is considered late, and the business may be subject to penalties and interest for the outstanding amount. To remedy the late filing, a taxpayer can send their DR-15 to the state with penalties and interest applied according to the post-marked date of the return.
There is a difference between late filings and late payments, and the Florida Department of Revenue penalizes both. This is because Florida law requires taxpayers to file returns even when no sales tax is due. By imposing a penalty on late filings, the state can still hold those with no sales tax due accountable. This is known as the “failure to timely file” penalty. The amount of the penalty will be 10% of the tax with a minimum penalty of $50. This means that, even where no tax is due, you can still be assessed with the minimum $50 penalty for filing a late return.
Additionally, the “failure to pay penalty” is assessed on 10% of the tax owed if the payment is made within the first 30 days. After a return payment is more than thirty days late, an additional 10% failure to pay penalty is assessed for each additional 30 days (or fraction thereof) for unpaid balances. In total, the failure to pay penalty will not exceed 50% of the tax due.
Interest is assessed on the amount of taxes or fees due that was not paid on time and accrues daily. Florida's interest rate is updated twice a year, on January 1 and July 1. The current rate, beginning June 1, 2024, is 12%.
Example
For example, the June 2024 return for a paper monthly filer would be due by July 22nd, since the 20th falls on a Saturday. For an electronic filer, the due date is July 19th, as stated in the Department’s announcement. Within 30 days after either due date, a return with a $500 sales tax liability would now be due with $100 penalty -- $50 for the late filing, and $50 for the late payment.
Interest would accrue daily starting on July 23rd for paper filers. If the return was filed on August 1st, that would be $1.64 (500 tax due, 10 days late, times the daily interest rate of 0.000327869)
Waiver of Penalties
The Department may waive the penalties that would otherwise be imposed on late filings/late payments if the delay was due to reasonable cause. “Reasonable cause” is another way of saying “for good reason,” which, in the Department’s eyes, is limited to issues like severe illnesses, death, natural disasters, or serious events of the like. Financial instability is generally not considered a reasonable cause for late filing.
To be eligible for a penalty waiver for monthly filers, the taxpayer must have filed and paid for the past 12 months. Is allowable to have one late filing/payment in the past 12 months so long as it has been resolved by filing the return and paying amount due plus interest within 30 days of being notified of late payment by the Department.
When it can become criminally late
Although most late filings result in penalties, interest, and/or audit, being chronically behind on sales tax filings may result in a criminal offense. The Florida Statutes draw the line after the sixth consecutive return, stating “any person who knowingly and with a willful intent to evade any tax imposed under this chapter fails to file six consecutive returns as required by law commits a felony of the third degree.”
If you’ve never filed
If you have never filed sales and use tax in the state of Florida but have recently become aware of your obligation to do so, you need to get registered and get filing. If you only recently became obligated to file sales tax, you can register online on the Department of Revenue’s website or you can fill out a paper DR-1 Business Tax Application, which can be submitted to your local Department of Revenue Taxpayer Service Center. Once registered, you can file and pay the sales tax due for the current period, as well as any outstanding periods that are past due. For filings that are past due upon registration, you will owe interest and penalties in the same manner as above.
If you have liability for multiple periods that are now past due, you might want to consider applying for a voluntary disclosure agreement with the state.
As previously discussed, penalties for past due filings and payment could amount to 50% of the tax due. Florida's voluntary disclosure program allows for taxpayers to disclose unpaid liabilities and avoid the penalties that would otherwise be imposed, so long as tax has not been collected but not remitted. If tax has been charged but not remitted to the state, a more modest 5% penalty will be imposed unless the Taxpayer provides reasonable cause.
Who is eligible?
Both registered and non-registered taxpayers who have a sales tax liability in Florida are eligible for the voluntary disclosure program so long as they have not previously been contacted by the Department regarding the specific past-due liability. Having previously been audited does not disqualify a taxpayer from the voluntary disclosure program, so long as the previous audit period does not include the period for which taxpayer is now trying to disclosure.
Benefits of voluntary Disclosure
In addition to avoiding penalties, entry into the voluntary disclosure program affords a Taxpayer the benefit of a shortened lookback period. In a voluntary disclosure, the Department will look back three years preceding the postmark date of the voluntary disclosure request. If instead the Department were to audit the taxpayer for the past due periods, the lookback period could be much longer. One other benefit…. doing a Voluntary Disclosure creates a statutory presuming that you had no criminal intend (effectively taking criminal charges off the table).
How to initiate
A voluntary disclosure can be initiated by the taxpayer themselves or by an attorney by sending a letter to the Department of Revenue stating the tax type and period being disclosed, affirming that the taxpayer has not previously been contacted by the Department regarding this liability, and providing contact information for the taxpayer or taxpayer's representative.
Once accepted into the program, the Department will then ask the taxpayer to provide a spreadsheet identifying taxable sales for the reporting periods and the amount of tax due. With extensive experience working with the Florida Department of Revenue and the voluntary disclosure process, an attorney at our firm can help navigate this process.
ABOUT THE AUTHOR
Jackie Mustian is an associate attorney who joined the law offices of Moffa, Sutton, & Donnini, P.A. in 2023. She focuses her practice on Florida state and local tax, with an emphasis on sales and use tax, but conducts research regarding other state tax policies nation-wide. Jackie assists in Florida sales tax controversy from protests through litigation. You can read more about Jackie in her BIO.
At the Law Office of Moffa, Sutton, & Donnini, PA, our primary practice area is Florida taxes, with a very heavy emphasis in Florida sales and use tax. We have defended Florida businesses against the Florida Department of Revenue since 1991 and have over 100 years of cumulative sales tax experience within our firm. Our partners are both CPAs/Accountants and Attorneys, so we understand both the accounting side of the situation as well as the legal side. We represent taxpayers and business owners from the entire state of Florida. Contact us for a FREE INITIAL CONSULTATION to confidentially discuss how we can help put this nightmare behind you.
AUTHORITY
Section 212.11, F.S. Tax returns and filing regulations
Section 212.12, F.S., penalties for noncompliance
Section 212.15, F.S., penalties for failure to remit taxes, due dates
DR-659, Calendar of Electronic Payment Deadlines for Calendar Year 2024
ADDITIONAL RESOURCES
FL SALES TAX PLAYBOOK: CAR REPAIR SHOPS, published August 2, 2024, by David Brennan, Esq.
FLORIDA SALES TAX CONVENIENCE STORE AUDITOR TACTICS, published July 17, 2024, by David Brennan, Esq.
DON’T HIRE AN IRS ATTORNEY FOR SALES TAX PROBLEMS!, published July 17, 2024, by James H Sutton, Jr., CPA, Esq.
FL SALES TAX COLLECTIONS ACTIONS – NOTICE OF WARRANT FILING AND ENSUING ACTIVITY, published July 8, 2024, by Matthew Parker, Esq.
FL DEPART OF REVENUE BANK FREEZES – A SUMMARY FROM START TO RELEASE, published February 15, 2024, by Matthew Parker, Esq.
FLORIDA SALES & USE TAX CAR WASH INDUSTRY GUIDE, published January 8, 2024, by David Brennan, Esq.
FL SALES TAX NOTICE OF ASSESSMENT PERSONAL LIABILITY: WHAT IS T AND WHAT TO DO!, published August 9, 2023, by Matthew Parker, Esq.
FLORIDA SALES TAX – VOLUNTARY DISCLOSURE PROGRAM, published April 9, 2018, by Jeanette Moffa, Esq.