Florida S Corporation filing required? 2023

[Strongsilence-CPA]

The Florida instructions are simple and clear. All corporations doing business, earning income or existing in Florida. My client is an out of state corporation that did business and had sales from Florida customers. But did not own property in Florida. It does not have a federal tax liability.

Lacerte says to add a Florida state module ONLY if the S has a federal tax liability, is required to file a property return DR405, of if this is the S Corp's final tax return.  This suggests that filing is not required.

Either LC is wrong, I'm missing a key rule, or Florida doesn't tax sales in this situation?

[Karl · Accepted solution]

I have a Florida S-Corp client. I'm in CA. I consulted with a FL CPA on this last year, and she confirmed no FL filing requirement (as long as no special entity-level federal tax is owed--which would be very rare for S-Corps).  I think you're good to not add FL as a state in Lacerte.

[Strongsilence-CPA]

That is very nice of you to answer Karl.

The tip to consult with a state CPA is a good one. There is so much regulation and I can't do it myself.

Yet, it would be better to get income sourced to Florida because of the lower combined tax rate (Ind + Corp) versus California. I don't do any other corporations with multiple states so I could be wrong, but I think that income taxed by Florida would reduce income taxed by California.  Perhaps not dollar for dollar.

[Karl]

As far as I understand your situation, you can still have income sourced to FL without filing a corporate return there. Instead of adding "FL" as a state in the return, just source it to "US" instead of "CA."  Then you'll only have CA taxes on the CA-sourced income.