Creating your company entity in Delaware, specifically a corporation, provides you with a great deal of flexibility; nevertheless, depending on the state in which you operate, you may still be required to comply with local regulations.
Specifically, businesses operating in Florida must register with the state. We'll explain how registration, tax, and employment matters work, as well as link to resources from the State.
How can you determine if you are legally conducting business in Florida?
When To Register As Doing Business In Florida
The State of Florida refers to Delaware C corporations and all other corporations formed outside of Florida as "foreign" corporations. Most states have this “foreign” corporation designation, and registering a Delaware corporation as a foreign entity in those states may be required.
The statutes of Florida do not define explicitly what constitutes conducting business in the state. However, according to Florida statutes, the following activities do not require you to register with the state:
- Defending or resolving a lawsuit
- Having or obtaining a bank account in the state
- Conducting sales activity through independent contractors
When To Register To Collect Taxes In Florida
Each state has its own rules about when a business must pay sales tax. These are called "nexus rules" for sales tax.
You can think of the nexus as a special version of that state's border. If you conduct certain business activities within that border, you fall into the state's sales tax nexus and are required to register for and collect state sales tax.
Most of the time, this happens when people buy and sell goods and services from your company in that state.
In Florida, the rules about sales tax nexus only apply to people who sell goods or services to people who live in Florida.
Prior to 2018, the sale or purchase of non-physical items, such as subscriptions to streaming services, SaaS memberships, etc., did not, in general, establish a sales tax nexus. In 2018, following an important court decision, this changed. Now, if you purchase or sell intangible products or services in a state, you may fall within its sales tax nexus.
Florida Sales Tax Nexus (Physical Goods And Property)
If you do any of the following activities in Florida, you may be required to register with the Florida Department of Revenue in order to collect sales and use tax:
- Maintain a business office or other location in Florida.
- Own, rent, or lease tangible personal property or real estate in Florida.
- Deliver merchandise to clients in Florida utilizing a company-owned or leased truck.
You can learn more about physical presence for sales tax purposes through the State’s website.
Florida Sales Tax Nexus (Non-Physical Goods And Property)
The new state sales tax legislation that apply to non-physical (e.g., online) purchases allow you to qualify for sales tax nexus even if you have no physical presence or goods. In Florida, you need to cross a certain threshold to qualify.
If your total sales to Florida in the prior year exceeded $100,000, you may be required to pay sales tax to the Florida Department of Revenue.
If you would like to take a deep dive, you can check out the State’s website.
As always, this is just a guide and not legal advice. If you're not sure if you fall under Florida's sales tax nexus, it's best to talk to a lawyer and/or an accountant who is familiar with the state's legal code and tax rules.
How To Register To Do Business In Florida
To become a “qualified foreign business” in Florida, you’ll need to do the following:
- Select a name under which to do business. This doesn’t have to be the name you registered when incorporating in Delaware, but it can be.
- Fill out an application. You’ll need to fill out an Application by Foreign Corporation for Authorization to Transact Business in Florida and include a Delaware Certificate of Good Standing.
- Pay the fee. Now you pay the Florida Department of State a $70 filing fee.
- Submit your Application by Foreign Corporation for Authorization to Transact Business in Florida.
- Wait. Processing typically takes two to four weeks.
Once you’re approved to operate as a qualified foreign business Florida, you’ll need to comply with certain requirements.
Compliance As A Qualified Foreign Business In Florida
You must retain a registered agent and file an annual report in order to maintain compliance and continue conducting business legally in Florida. You may also be required to pay a corporation income tax.
The following sections explain these compliance reqirements.
Registered Agent In Florida
In Florida, your registered agent is your point of contact with local authorities. If your company does not have a physical address in Florida, it may be beneficial to find a registered agent to receive state notices on your behalf.
Foreign corporations must maintain a registered office in Florida. The office cannot be a post office box, but must be the physical address of your registered agent or a licensed registered agent service.
Any important information, such as business mail, will be forwarded to you by your registered agent. A number of companies subcontract the services of registered agents. They typically cost between $50 and $100 per year.
Annual Reporting In Florida
You must file a statement with the State every year, updating any changes to the company address or the composition of the Board of Directors and officers. You will include information such as:
- Your company's legal name
- Your registered agent's name and address
- Board members', managers', and officers' names and addresses
There is a $150 fee for filing your annual report.
Paying Florida's Corporate Income Tax
Lastly, Florida has a corporate income tax which is a tax imposed directly on the income of your corporation. For more information on filing and paying your annual taxes, please see the following guidance from Florida’s Department of Revenue.
How To Register To Collect Sales Taxes In Florida
Hiring And Paying Employees In Florida
hire and rehire within 20 calendar days of the employee beginning to earn wages. You can use the Florida employer website portal to report new hires.
Paycheck withholdings should be handled by your payroll provider, but it is your responsibility to register as an employer with the State and create an online employer account.
For a comprehensive guide of your responsibilities, Florida provides the following information.
The Easiest Way To Register Your Business In Florida
To register your business in Florida, you’ve got to keep track of a lot of moving parts. Failure to file the correct forms, provide the correct information, or stay current on compliance laws can result in serious headaches.
Capbase makes it simple. When you incorporate a Delaware corporation through Capbase, we will generate the necessary information for you to register to do business in Florida and keep you up to date on any required filings.
The compliance calendar in your Capbase account will alert you to any upcoming fees, reporting, or other requirements, allowing you to keep your startup in good standing with Florida state officials.
Check out our features to see how easy it is to start, register, and manage a legally-compliant Delaware corporation in Florida with Capbase.