State Deep Dive
C Corp vs S Corp in Florida
Florida has no individual income tax and an unusually clean S corp treatment: S corps generally file no Florida income tax return at all. C corps pay 5.5 percent on Florida-source income via Form F-1120. The combined effect makes Florida one of the most S-corp-favorable large states.
Updated October 2026. Not tax advice.
Florida tax overview
Individual income tax
0%
None imposed
C corp tax rate
5.5%
On FL net income
S corp state tax
$0
No return required
The S corp filing rule (the simplest in the US)
Florida's corporate income tax reaches an S corporation only where it owes federal tax at the corporate level. The Florida Department of Revenue states that an S corporation must file Form F-1120 only if it is liable for federal income tax on built-in gains or excess net passive income (IRC Sections 1374 or 1375, reported on Form 1120-S); otherwise no Florida income tax return is required.
For a typical Florida S corp owner-operator, the entire Florida state obligation is the $150 annual report fee for a profit corporation with the Florida Department of State, due May 1. No FTB-style minimum franchise tax. No CT-6-style state S election form.
Source: Florida Department of Revenue Corporate Income Tax; Fla. Stat. Section 220.13
The C corp filing rule
Florida C corporations file Form F-1120 and pay 5.5 percent on Florida net income, computed by starting with federal taxable income and applying Florida adjustments. The Florida exemption is $50,000; net income above that is taxed.
For a Florida C corp with $500,000 net income: $50,000 exempted, $450,000 taxed at 5.5 percent = $24,750 Florida tax, plus $105,000 federal (21 percent of $500,000) = $129,750 combined entity-level tax. Distributions to shareholders trigger federal dividend tax (no Florida individual income tax).
Worked example: $400k Florida operator
| Line | S Corp | C Corp (no dividend) |
|---|---|---|
| Net income | $400,000 | $400,000 |
| Federal corporate tax | $0 | $84,000 (21%) |
| FL corporate tax (after $50k exemption) | $0 | $19,250 (5.5% of $350k) |
| FL individual tax | $0 | $0 |
| Federal personal tax on $400k pass-through | ~$95,000 | $0 (until dividend) |
| Total tax (no distributions) | ~$95,000 | $103,250 |
Indicative example. S corp also produces an additional SE-tax saving on distributions above a reasonable salary. C corp adds dividend tax (up to 23.8 percent federal qualified plus NIIT) once earnings are distributed.
Florida and QSBS
Florida has no individual income tax, so there is nothing for the federal QSBS Section 1202 exclusion to conform to. A Florida-resident founder selling C corp QSBS for $10M owes zero federal tax (if held 5 years) and zero Florida tax. The same holds in the other states with no tax on individual capital gains, such as Texas, Nevada, South Dakota, Tennessee, Wyoming, Alaska and New Hampshire (whose Interest and Dividends Tax is repealed for periods beginning on or after 1 January 2025).
This is why Florida ranks alongside Texas as a relocation destination for venture-backed founders preparing for liquidity.
Sources
- Florida DOR Corporate Income Tax
- Fla. Stat. Section 220.13 (adjusted federal income)
- Florida Division of Corporations Sunbiz
- 26 U.S.C. Section 1202 (QSBS)
Educational only. Verify current rates and filing requirements at the Florida Department of Revenue.