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 May 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 statute Section 220.13(2) excludes S corp net income from the corporate franchise tax. An S corp doing business in Florida that files Form 1120-S federally is generally not required to file a Florida F-1120 return, unless the S corp has built-in gains or excess net passive income subject to federal corporate-level tax under IRC Sections 1374 or 1375.
For a typical Florida S corp owner-operator, the entire Florida state tax obligation is the $138.75 annual report fee 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. Same as Texas, Washington, Nevada, South Dakota, Tennessee, New Hampshire (subject to interest and dividends tax), and Wyoming for capital gains.
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 (S corp exclusion)
- 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.