Sales Tax Increases

Voters in Duval and Clay Counties of Florida have elected to increase their local sales tax rate by a half-cent, effective January 1, 2021. The new sales tax rate will be 7.5%, rounded up to the nearest penny. Sales tax for rents charged on commercial property in Duval and Clay Counties will also increase by half a percent, from 6.5% to 7%. The money received as a result of the half-cent increase is intended for local school upgrades as aging buildings are in need of repairs and modernization to keep schools safe and conducive for learning.

If you have operations or sales in Duval or Clay County, be sure to update your accounting software for the change in the rate for year-end bookkeeping. All other limitations on local sales tax rates are unchanged and continue to apply, including the surtax limit on large purchases (such as motor vehicles, mobile homes, aircraft, or boats) over $5,000.

With the increased standard deduction enacted by the Tax Cuts and Jobs Act, fewer taxpayers stand to benefit with itemized Schedule A deductions. The deduction for state and local income, sales, and property taxes is limited to $5,000 for individuals ($10,000 if married filing jointly). You have the option of claiming either state and local sales tax, or state and local income taxes, but you cannot claim both.

Remember that 2019 also brought about changes to sales tax nexus laws, which targeted online retailers. An online retailer isn’t just the big names on the internet—it’s any business that sells online, even if those sales are secondary to sales from a brick and mortar location. The events over 2020 brought online retail into the spotlight. If your business is doing any type of online sales, it’s worth take a look at the requirements introduced by the SCOTUS case South Dakota v. Wayfair. We can provide professional advisory services to help you stay in compliance with complex sales tax rules and ensure your business is always up to date with the latest changes. Contact us to learn more.