Florida State and Local Tax Lawyer

Business Owners and Florida Taxes

In the daily running of a business, there are many issues that arise that must be taken care of in order for you to succeed. One such issue is the correct collection and payment of state taxes. Florida tax laws are different than any other state and as such require an in-depth understanding. Even the most honest business owner can run afoul of Florida's complex tax laws. Neglecting to correctly determine and pay your taxes can have dire consequences. These consequences may not come to light until years later when you receive a Notice of Intent to Audit Books and Records (Form DR-840) from the Department of Revenue. If anything is found amiss in your tax audit, then you could face stiff penalties and interest, or even a Florida tax warrant. At times, tax controversy may even become necessary to fight for your taxpayer rights. As attorneys, we are ready to aggressively fight the Florida Department of Revenue on your behalf. We have decades of experience representing business owners just like you before the Florida Department of Revenue and Florida Courts.

As a business owner, one of the most important aspects of Florida taxes is you responsibility to COLLECT AND REMIT TAXES on behalf of the State of Florida. Many business owners find themselves in SERIOUS TROUBLE because they do not realize that "trust fund taxes," such as sales and use taxes or unemployment taxes, are never the business's money. They are funds owned by the State of Florida from the moment the transaction rising to the collection responsibility occurs. What we often see are honest business owners that find themselves short on capital that "borrow" these trust fund taxes with every intention of paying the funds back. For whatever the reason, the funds are not available when the tax returns and payments are due. Even using "trust fund taxes" for a day is considered stealing from the State of Florida and can land the employees responsible for the funds or even the owners of the business in jail. In fact, the DOR published a list of business owners that are arrested each month under these exact circumstances. Most business owners are surprised that these types of liabilities are usually NOT FORGIVEN IN BANKRUPTCY and the state can often PEIRCE THE CORPORATE VEIL to find the owners liable too. If you, as a business owner, find yourself in a sticky situation with trust fund taxes either before, during, or after an audit, then you need to contact a knowledgeable Florida sales tax attorney immediately to receive a competent defense. This situation will not simply go away and the attorneys at the Law Offices of Moffa, Sutton, & Donnini, P.A. are here to help whether the matter is still civil in nature or it has become a criminal tax matter.

If you have decided to undertake the selling or buying of a business, having an accomplished Florida sales tax audit attorney can save significant money and headaches. Many purchasers (or sellers) of a business find out the hard way that they can be personally liable for the Florida tax liabilities of the business both prior to and after the purchase as well as from the purchase transaction itself. Many business owners mistakenly believe that just purchasing the stock of a company avoids Florida sales tax on the transaction. For a new or established business, responsible state tax planning and consulting is vital to the prosperity of your business. Whether you need immediate and aggressive legal help to resolve an issue with the Florida Department of Revenue (DOR) or wish to prevent such issues in the future, the Law Offices of Moffa, Sutton, & Donnini, P.A. are here for your business with decades of knowledge and experience.

Florida Tax Laws for Specific Industries

Each industry in Florida has its own set of tax challenges. Understanding these challenges and complying with state tax laws is essential for business owners to avoid costly mistakes. Here are a few industries that face unique tax issues:

Hospitality Industry:

• Hotels, restaurants, and other hospitality businesses must navigate sales tax on lodging and meals.
• Tourist development taxes apply in certain areas.
• Land/Building in a separate legal entity? – you might have intercompany rent issues

Hospitality businesses may also face unemployment tax issues and need to be aware of special service charges or tips that are taxable.

Construction Industry:

• Contractors and subcontractors must understand sales tax on materials used in construction projects.
• Certain contractor exemptions may apply, but businesses must ensure they are following the correct tax rules for both labor and materials.
• Construction businesses often face challenges with use tax when purchasing items out of state.

Real Estate Industry:

• Sales tax may not apply to residential rent over six months, but it does apply to commercial leases.
• Florida's documentary stamp tax applies to real estate transactions and must be paid on deeds, mortgages, and other documents.

Developers and real estate investors must also be mindful of property tax assessments and any tax incentives available for development.

Retail Industry:

• Retailers are responsible for collecting and remitting sales tax on all taxable sales.
• Sales tax audits are common in retail businesses, and owners need to track exemptions and the sale of non-taxable items.
• Retail businesses must also consider the sales tax on online transactions.

Sales and Use Tax Audits in Florida

Sales and use tax audits are conducted by the Florida Department of Revenue (DOR) to ensure businesses are correctly collecting and remitting sales tax. Here’s what you need to know:

What Triggers an Audit:

• Discrepancies in tax returns.
• Random selection or industry-specific patterns.
• Complaints or referrals from other taxpayers.

Preparing for an Audit:

• Keep accurate records of all sales, purchases, and tax payments.
• Ensure that all exemptions and taxable items are correctly identified.
• Work with a qualified tax professional to prepare and review all documents.

Defending Against an Audit:

• If an audit finds discrepancies, you may be required to pay back taxes with penalties and interest.
• A tax attorney can help dispute findings, negotiate penalties, and ensure that you comply with all tax laws.

Corporate Structure and Florida Tax Liability

The structure of your business significantly impacts your tax responsibilities in Florida. Here’s how different entities are affected:

LLC (Limited Liability Company):

• Offers liability protection but can be taxed as a pass-through entity, meaning income is taxed at the individual level.
• Owners must still be mindful of sales tax and employment tax obligations.

S Corporation:

• Similar to an LLC in terms of pass-through taxation but may face different rules for distributions and employee compensation.
• This structure is often used by small businesses seeking to avoid self-employment tax.

C Corporation:

• C Corporations face double taxation: one at the corporate level and another at the shareholder level.
• This entity type may offer certain tax deductions and credits but requires careful attention to corporate income tax and state filing requirements.

Trust Fund Taxes and Personal Liability:

• Certain taxes, such as sales tax and unemployment tax, are considered "trust fund taxes." These taxes are collected on behalf of the state and must be remitted on time.
• Owners can be personally liable for failing to pay trust fund taxes, regardless of business structure. It is critical to stay compliant to avoid personal financial consequences.

Understanding how your business structure affects your tax obligations in Florida will help ensure compliance and minimize liability.

Fighting for Taxpayer Rights

We have been providing strong legal representation (state and local tax defense) in the area of state and local tax law to clients for more than 50 years and even longer as Florida licensed CPAs. We pride ourselves in taking forceful action against those who have violated our clients' rights as taxpayers and by tackling grave tax issues that could potentially hinder their success. We can work with your existing accounting department or outside CPA or Attorney to effectively resolve your Florida tax matters. If you have been wrongfully arrested after a Florida Tax Audit, then we can also sue the Department of Revenue on your behalf. If this is your situation, then please give our offices a call to discuss your options.

For CPAs and attorneys, if your client is under a Florida tax audit and you feel they could benefit from our hard-hitting legal representation/defense, we will not attempt to lure them away from you since our firm concentrates almost exclusively on Florida tax controversy matters.

If you're a business owner facing any Florida tax issue, our experienced team is here to help. Contact us today for expert legal guidance. Call (888) 444-9568
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